Why Is A Loyalty Program Important For Your Business?
Earning a customer’s loyalty is important for any business, and one of the best ways to do so is through a rewards program. A rewards program not only brings customers, it can help speed up the loyalty “life cycle,” turning new or first-year customers to act like fifth or even tenth-year customers–the company’s most profitable group.
“Customer engagement is highly correlated to customer loyalty,” says Aimee Lucas, Customer Experience Transformist and VP at the Temkin Group, a customer experience research and consulting firm.
Loyal customers will buy more frequently, and will spend more. “We see companies who have improved engagement increase cross-sell by 22%, drive upsell revenue from 13% to 51%, and also increase order sizes from 5% to 85%,” says Ray Wang, Principal Analyst and CEO at Constellation Research, an advisory and research firm. Loyalty programs, when done right, can be powerful incentives for returning customers.
Loyalty = Profitability: This might sound like a no-brainer, but a company’s most loyal customers are also its most profitable. As a consumer goes down the loyalty life cycle, they become less costly: on average, it costs 7 times more to gain a new customer than it does to keep an existing one, and you’d need to acquire 7 first-time buyers to match the sales volume of a regular customer. Loyal customers will also buy more, pay premium prices, and bring in new customers via referral.
Data Analysis: In the incentives industry, there is massive amounts of data available to businesses, and in the digital age, collection and analysis of this information has never been easier. Brands can learn more about their consumers who use rewards, and this data will help drive personalization. The ability to track redemption and user engagement offers great insight into customer behaviour.
Personalization: Using data analysis gleaned from rewards and incentives programs, companies will be able to personalize their marketing campaigns to deliver relevant, enticing, and special offers to consumers, which will once again serve to increase sales and loyalty.
Differentiation: Offering a unique rewards program will help differentiate your business from competitors and increase sales and customer satisfaction.
Opportunities: A loyalty program creates a platform to cross-sell and up-sell new products to a consumer base that trusts you and is already invested in your service.
Millennials Want Loyalty Programs: The largest working force in the United States and the first demographic to be entirely digital, Millennials are important trendsetters and a demographic that your business needs to pay attention to. Offering an updated rewards/incentives program that can be used in person, online, and via mobile is an important step to landing this forward-thinking and savvy consumer base.
Whether a business is launching a new product, promoting a contest, or having event giveaways, discover an effective way to bring your next promotional idea to life. TruCash offers a modern incentive & rewards program, with unmatched data tracking and reporting. Contact our award-winning team to see how you can implement your own loyalty program.