Loyalty programs have come a long way as more and more businesses right from retail to airlines rely on them for better customer retention. These programs are designed to offer various perks to customers and make their spending experience rewarding. Several brands today, state that use of active loyalty programs have helped them witness a seamless experience on connecting with customers. In addition, smartly managed data also helps develop personalized communication for the better experience.
In the competitive market, where product differentiation is almost over, loyalty reward program proves to be a game changer. These programs contribute exponentially to the success of a business. Below mentioned are top three benefits that make loyalty reward programs an inevitable part of the marketing strategy.
#1. Maintains Customer Relations
The biggest myth about loyalty programs is that they are way too expensive. But research proves that, acquiring new customers is more expensive than maintaining the old ones. As per Forbes, retaining an existing customer is 7 times cheaper than acquiring a new one.
Tailor-made programs easily create a loyal set of customers, who desire to save money. But to be honest, loyalty programs can be a lot more than this. Many times, buyers look for something that is more than money. Additional privilege or part of the success story can be a delightful experience. For example, giving a premier look of the brand-new range of products with special discounts or an invitation for special occasions like, new store opening etc., can make your customers feel exclusive and gratified.
#2. Gets You More Sales Deals
Improved customer retention is an after effect of tailor-made reward programs. Loyalty programs, not only recalls the customer but also gives him a thousand good reasons to make a higher purchase. Providing loyal customers with out of the box incentives works as a driving force to encourage customers to spend more.
#3. Helps Stay High on Reputation
Loyalty programs often execute a double role. One is to motivate new customers to stay and the next one deals with ensuring that old and loyal customers feel valued.
Well, an introduction of a loyalty program improves the customer’s appreciation level for your business. Such experiences are often shared by customers with their near and dear ones to receive the same royal treatment. However, the more customers feel happy they are bound to recommend your business to others. A great amount of mouth publicity also helps a business boost its reputation.
Keeping in mind the above-mentioned benefits, introducing loyalty programs can prove to be a beneficial marketing tactic.