Published by July 18, 2022
Studies show that focusing on and enhancing customer retention by just 5% can boost your business profits anywhere from 25% to 95%. Still, organizations spend about 90% of their marketing budget on customer acquisition and do not prioritize customer retention. Considering our specialization in customer retention and our industry-leading expertise in loyalty programs, we feel obligated to bring light to the matter, i.e. the importance of loyalty programs in customer retention and how it will prove to be your highest ROI earning investment. So, stay tuned as throughout this blog article, we’ll touch on all the aspects that make loyalty programs a worthwhile investment.
How do customers perceive your brand?
Let’s start with what your customers think/say about you. Brand perception is at the heart of a company’s marketing efforts. It encompasses who you are and what you stand for. It’s the perception and emotional feeling about your brand based on what your customers say and how they behave. Your brand perception is how customers think about you. It’s not just who your company is, instead, it’s what your customers believe, from the experience they’ve had with your products or services, reputation, social media, and conversations that help build brand loyalty.
How do you build your brand loyalty?
Building brand loyalty is all about building trust. Until your target customers have experienced your product, believed your brand promise, and developed a sufficiently positive perception to buy (and rebuy) it, your brand will not grow. When a brand delivers or exceeds customer expectations, it has the potential to establish a whole lifetime of brand loyalty. Here’s where loyalty programs come in. Since most of your working business is dedicated to creating quality products and providing good services to gain new customers, allowing us, loyalty industry leaders to come up with innovative and bespoke loyalty solutions for your business model will help you to convert those newly gained valuable users into loyal customers.
What is the purpose of loyalty programs?
Loyalty programs are principally intended by organizations to reward frequent customers’ loyalty or to gain customers’ loyalty through exciting rewards. In either of the cases, the critical factor is recurring customer engagement and sincere dedication to the organization. Therefore, we can say that the purpose of the loyalty programs is much more extensive comprising of but not limited to increasing business, improving sales, strengthening the relationship between the customer and the business, and keeping the customers coming back regularly.
What are the costs and the effects of loyalty programs on organizational revenues?
Every good thing comes at a cost and so does customers’ loyalty but it is essential to make sure that the cost is worth the price. Even though loyalty programs are all the rage these days, how do you know if your company’s loyalty program is giving you what you want? Thus the reality lies in determining the cost along with the net gain of a business from a loyalty program. No doubt, it is a tricky process, but we enjoy a good challenge. So what we do here is evaluate the level of dependency on the structure and incentives of a given program to evaluate the performance of a loyalty program, i.e. incremental revenues subtracted by incremental costs. This can help you determine whether or not your current program is working for your business or if it needs some tweaking before it’s ready for prime time!
What is the takeaway?
After assessing the notion and evaluating all the relevant aspects, we can conclude with absolute certainty that the optimum loyalty program for your business will have the potential to not only satisfy and reward your existing loyal customers but will even assist you to upsell as well as gain new customers, ultimately enriching the organizational revenue for your business on multiple fronts. So we ask you, why wait? We’re sure that we’ve convinced you enough to prove that ‘loyalty programs’ do deserve the importance as a beneficial business investment and that you shouldn’t wait any longer to get your custom-designed loyalty solution. Let’s talk.