6 Reasons Why Loyalty Marketing Is Important
Ok, so now that you’ve decided it’s time to update your loyalty program, it’s time to look at the benefits and competitive advantages it can offer:
- Retain Old Customers:
Keeping your current customers is a big deal. On average, it costs 7 times more to gain a new customer than it does to keep an existing one. Increasing your customer retention rate by just 5 percent can increase profits by 25–95 percent. A loyalty program provides a reason for customers to stick around and keep purchasing. It also provides data/information to allow businesses to continue to meet the needs and desires of consumers.
- Attract New Customers:
An exciting and interesting loyalty program that offers customers valuable rewards may be just what your company needs to attract new customers. Customer acquisition isn’t typically the main goal of a loyalty program, but it is always important to continue to replenish your customer pool, even when you are working hard at retaining your old customers.
- Get Rid of The Bad, Bring Back The Good:
Like personal relationships, sometimes, some customers just aren’t a good fit for your business. They don’t buy enough, only take advantage of discounts, and aren’t worth the time and money you invest in keeping them. In these cases, it can actually be more profitable to lose these “bad” customers. Designing a loyalty program that rewards “good” customers can help push these other people out.
On the flip-side, a loyalty program can help you win back “lost” customers. The success rate of reclaiming inactive customers can be 3-4x higher than the rate of bringing in new customers. The reason? You already have their previous information on file, such as purchase history, contact information, and preferred communication channel. Use this to your advantage!
- Sell What You Want And What Your Customers Want
Tracking purchase history from your customers via your loyalty program will allow you to know what products to stock more of. As well, it will allow you to properly market and move the products you want to sell.
- Stay Competitive:
Your competition isn’t going to rest on their laurels, and neither should you. If you notice that your competition is offering something special, or that your customers are beginning to drift somewhere else, offer something special to keep their loyalty.
- Create Brand Advocates:
You want more than just loyal customers–you want brand advocates. These are customers who will tell friends, family members, and coworkers about how great your company is. This kind of personal, word-of-mouth advertising is more convincing than any other kind of promotional material. If you keep your customers happy, not only will they remain loyal, but they will become an intrinsic part of your referral network. (link to Referrals in Solutions section of website)
Looking to develop a flexible system to motivate your distributors, customers, staff, and sales agents? Our unique loyalty platform “TruCash” delivers on-going loyalty rewards that earn points that “convert to cash” at the click of a button. To learn more, click here.
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