An effective customer loyalty strategy can be one of the most important functions of your business in terms of separating you from your competition. Customer loyalty programs come in various forms whether they are special discounts, tier systems, games, or VIP clubs. When you pick a program to go with you want to pick something that is as simplistic as possible for your customers, because if it’s successful, even a 5% increase in customer retention can cause overall profits to increase by more than 50%.
We’ve listed a couple of benefits for having a customer loyalty program that you can easily read and ultimately benefit from:
Customer retention is the ultimate goal. On average returning customers spend 67% more than someone who is approaching your business for the first time.
Increase in Frequency
Increase in buyer frequency is something that is easily achieved with a customer loyalty program by using a combination of marketing automation and achievements. For example with SailPlay Gamification features customers are able to see how far away they are from reaching specific goals and rewards that they may earn. This helps keep them coming back on a more frequent basis so that they’re able to earn them.
Increase in Revenue
If you’re able to increase your customer retention by 5% and on average the returning customer spends 67% more than a new customer, you have the ability to increase your overall revenue from 50% to 95%. Not to mention that you’ll be saving money in the long run as new customers cost typically 5 times more on average than a returning customer does to obtain.
With a well organized customer loyalty program you’re able to gather detailed information on your customers including purchasing habits. This is huge in terms of being able to create customized campaigns for each demographic in order to help achieve the largest amount of potential sales as possible.
Stronger relationships with customers.
This should be an ultimate goal in any business. Strong relationships with customers help not only secure a customer, but it also gives a higher probability to receiving referrals as well as honest feedback on your business. Which will go a long way in helping improve your business.