Companies all over the globe are increasingly implementing loyalty programs in the digital age. A customer loyalty program is basically a system crafted by the company to reward purchasing behaviour and improve customer loyalty towards the brand. Loyalty strategy has now become a key element of the marketing mix as companies seek to retain customers, acquire new members, build customer engagement and enhance the brand experience. While there are many reasons for a company to craft one, let’s take a look at the top benefits of a customer loyalty program:
In the competitive marketplace of today, fostering customers who keep buying your products or services is a top priority for companies. Loyalty programs are a great way to achieve this as they create customer engagement beyond just the point of purchase. It is important to note that the cost of acquiring a new customer is way higher than retaining an existing customer. Therefore, it makes business sense to focus on customer retention.
Gaining market share is not only important, but also difficult in today’s times. As a marketing tool, a customer loyalty program serves as a good way to attract new customers leading to member acquisition. For instance, you can offer discounts or membership rewards points on signup which will bring new members. Making the membership rewards within reach gets the new customers to stick around.
Getting customers to be a part of your loyalty program gives you access to valuable customer data. This gives a company details of customer purchase patterns, a look at customer behaviour regarding how they redeem membership rewards and also the frequency of customer engagement. Taking this a step further, as a company you can use the data to surprise and delight your customers which proves beneficial. When you learn more about your customers’ behaviour, you can personalize the membership rewards program accordingly.
One of the most important aspects of a loyalty program is that by studying the customer data, you can personalize the customer experience. This makes your customers feel like they have an emotional connection with your brand and leads to repeat purchases. This is because when customers feel emotionally connected they will be keen to continue shopping and interacting with your brand.
By implementing a loyalty program, you are conveying to your customers that you are interested in building a relationship with them. This has a positive impact on your customer base. Loyal customers spread good reviews via word-of-mouth and social media too. These customers become brand advocates which leads to building brand loyalty in a big way.