From multinational retail corporations to small mom-and-pop corner stores, many businesses offer loyalty programs to encourage repeat customers. Yes, loyalty programs come at a price for the business; but when done correctly, their long-term rewards can greatly outweigh that cost. Those offering significant loyalty programs have grown their revenue approximately 2.5 times faster than other businesses in their industry.
The idea behind loyalty programs is simple: Reward returning customers for their continued patronage with points, discounts, freebies, and other exclusive benefits. This then encourages them to keep coming back to you, which results in increased revenue, and the cycle repeats itself.
Fostering loyal customers molds them into essential pillars for your business, as they tend to buy more, are inclined to pay more for higher rewards, and spread the word if they have a good experience with your business. Here are some ways that a good loyalty program can increase your revenue.
How a Loyalty Program Will Improve Your Bottom Line
1. Keep Them Coming Back
Customers are more likely to become repeat consumers if there’s something in it for them, whether it’s a discount on their next purchase or an enticing freebie after five more purchases.
In fact, statistics show that 75% of customers claim they are more inclined to make another purchase if they are incentivized. Furthermore, 77% say that they are more likely to continue patronage if a business has a loyalty program.
New customers are great; so are repeat customers. If people keep coming back in the door, you know you’re doing something right. Retaining current customers is incredibly meaningful.
2. Loyal Customers Buy More
According to Bond’s brand loyalty study, members of loyalty programs that resonate or connect with them tend to spend 27% more. Loyalty programs are also highly beneficial for e-commerce businesses. A case study showed a 319% spike in average order quantity when an e-commerce platform has a loyalty program.
One of the simplest ways to boost revenue is to target people who are already shopping, and encourage them to shop more.
3. Loyal Customers are More Willing to Pay for More
63% of consumers say that they adjust their spending to get the most out of their loyalty program benefits. For example, if a customer needs to meet a specific price minimum to get more points or a higher discount, they will be willing to add another item to their shopping basket.
You can additionally maximize your loyalty program and increase revenue by including some customer favorites in the program. 39% of consumers say that they are willing to spend more on a product that they are loyal to, even if there are cheaper alternatives available. The price tag isn’t always the final determining factor.
4. Loyal Customers Network for You
Happy customers often make chatty customers. 70% of customers say that they are likely to recommend a business if it has a good loyalty program. Another study showed that 60% of those who are loyal to a brand or business are inclined to share it with their friends and family.
If you implement a good loyalty program, your customers won’t just come back; they might even bring a few new people with them. That means more sales, and hopefully more loyal customers, for you.
Word of mouth matters. What your customers say about your business will always be more powerful than what you say about your business. Period. If you provide an amazing service, then your current customers will spread the word. It’s almost like free advertising.
5. Increased Customer Satisfaction and Better Relationships
Rewarding customers for their consistent patronage will help strengthen their connection to and affinity with your business. When partnered with excellent customer service, a good loyalty program will show customers that you recognize their support and value their continued business with you.
This will leave a positive impression and make them more inclined to return as they know they will get the VIP treatment.
There are different types of reward systems for loyalty programs. Consider what will be most cost-efficient for your business and attractive to your customers.
Most businesses implement point systems which entail giving each customer a certain number of points per transaction or amount spent, which customers can then redeem via partnership rewards or have their choice of prize depending on the point tier.
Convenience stores may choose the partnership rewards format, which entails giving customers a gift voucher, discount, or freebie product once they reach a specific number of points. On the other hand, restaurants may give loyal customers a free dish based on the number of points they have obtained. For example, 100 accumulated points might get them a free appetizer, while 500 points will get them a free entrée.
Another popular loyalty program selling point is providing members with exclusive benefits, such as priority customer service, early bird access to new offerings, and special discounts. Retail stores may set up a members-only counter that allows loyal customers to skip long checkout lines. E-commerce sites can offer personalized discount codes or promos for members, or grant them early access to items on sale. A company may offer exclusive services for members, such as a dedicated support line or one-on-one consultations.
If you’re ready to roll out a loyalty program for your business, look no further than the Smart Loyalty program of TruePOS. With our trusted industry experience and unbeatable customer service, we can help you find the right loyalty program for your business so that you can foster your customer relationships and boost your sales.
Contact us today and get a free quote.