Customer loyalty is defined as the willingness of a customer to interact with a specific company brand or purchase a product or service as presented by the company continuously. This loyalty program can also grow or be cultivated through the deliberate efforts of the business brand. However, the most critical factor to note is that a customer loyalty program’s effectiveness or success hinges on such customers’ favorable experiences with the brand.
This factor propels such customers to return and increases their likelihood to make repeat purchases from such businesses. Research proved that loyal customers could spend up to 67% more on desired products and services than new customers. Mind you, these loyal customers may only constitute 20% of your total customer base, but they can drive up to 80% of your total revenue. Hence the need to be deliberate about setting up a viable customer loyalty program.
Particularly in a somewhat saturated niche, it is vital to focus more on retaining a customer than acquiring new ones. Statistics show that it is five times easier to retain an existing customer than to acquire a new one. As a result, you can get a loyal customer to keep buying your offered product or service for practically their lifetime. This article lists out the top benefits of setting up a customer loyalty program.
Advantages of Customer Loyalty Programs
- Drive a continuous business
Loyalty programs allow your business to remain the first thing on customers’ lips when they feel a need for what you sell. These loyal customers are the most likely ones to return to your brand repeatedly after making a purchase. At first, some of them might have just found your bran randomly, but just one interaction should be enough to retain them and make them come back with the assurance of being satisfied.
The excellent experience you give to customers is your surest bet that they are willing to return to buy. And the chance of creating such an unforgettable experience depends on many factors. One of them is customer service relationship, delivery time, quality of product or service, and more importantly, the loyalty reward program that motivates them to return.
- Build a team of brand ambassadors
A team of brand ambassadors is the first loyal customer who kept coming back. And not only so, but they go ahead to spread the great news about your brand through direct word-of-mouth marketing without pay. Alternatively, some of them can post reviews on your site or share what they enjoy about your brand through social media. Research showed that happy and satisfied customers are more likely to share selling points of your business product or service with others.
Happy customers will also likely tell family and friends about your brand, making you reach more people and make more sales. As a result, these loyal customers turn brand ambassadors can save you much money from marketing while bringing you great results. And if you continue to impress customers, the team of influencers or brand ambassadors keeps increasing, with more results.
- Boost your revenue
What better way to boost your revenue than the assurance that a large portion of your existing customers returns and buy again. It is already a fact that these returning customers spend much more (close to 70%) than new customers. This increase is that they have built a level of trust in the brand, which continues to grow as a favored choice.
As a result, once a customer enjoys satisfaction with your product or service, they are willing to spend more money on it. Consequently, you get more revenues from sales to these returning customers who bring others to buy. Your net revenues also increase as you may not have to increase your marketing expenses while you rake in more sales revenues.
- Get valuable feedback
Through effective loyalty programs, loyal customers are more willing to answer surveys, quizzes, questionnaires, fill in contact forms, and other feedback channels. Moreover, they already like your brand and derive satisfaction from associating with your products and services. Therefore, it takes little effort to get a response or an engagement from them.
More so, these loyal customers are willing to share what they feel can help you improve the brand quality. At other times, they may want to encourage you to keep up your efforts on brand quality. Therefore, when you crate customer loyalty programs, you improve your chances of making returning customers give you helpful advice and motivation to keep up the excellent work. This strategy enhances the results you can get from core marketing strategies and actionable tactics.
- Guard against competition
As you enjoy the pleasures of customer loyalty programs and results, remember the existence of your competitors who are on the prowl. Therefore, you can protect your brand against competitors by developing a team of loyal customers who are willing to spend every penny on your brand. And as you earn more from these loyal customers, your competitor loses more.
As a result, the brand owner has to cultivate customer loyalty programs’ advantages to achieve greater productivity. Ensure you keep your loyal customers happy to reduce the chance they consider a competitor’s brand continually. More so, as you give more reward and profit to these loyal customers, you give more reason to continue to purchase from you and not your competitors.
On a final note, companies have discovered these fantastic benefits from valuable loyalty programs that help them achieve their marketing goals., every customer is happy to get a 20% bonus on a product or service because they are a returning customer. The customer marketing approach also creates a kind of omnichannel program through a sustainable customer database.
These loyalty programs convince customers that you care and that you have their best interests at heart. Therefore, it is no crime to benefit from this existing benefit for a long-lasting business relationship. The program also allows your brand to grow more value and drive up sales while beating off competitors.
Hopefully, you have not believed the lie that the easiest part of a business is starting because acquiring and sustaining customers can pose more challenges and may have caused some to give up on their business dreams. While it is essential to spend a great deal at spreading your brand’s awareness and winning the hearts of potential customers, you also have to prepare for what it takes to retain them.
A great brand should make room for more customers to return over and over again due to great satisfaction. It is also essential to learn the less challenging strategies of achieving better results, customer loyalty programs. These programs keep customers satisfied as they continually visit the brand to make purchases. Perhaps, the next notable question be how long it takes to build an effective customer loyalty program?
How long does Customer Loyalty Take?
Brand marketing departments spend much time buzzing around special selling seasons to dole out special offers to new and existing customers. For instance, holidays such as Black Friday, Christmas, New Year, Thanksgiving, Cyber Monday, and others are great opportunities. And part of the rush hour, a customer loyalty program brings in another twist to the story.
More so, great brands have implemented several loyalty programs and have established the goodies as returns. For example, Coca-Cola, Walmart, Nike, Victoria’s Secret, and some other top brands are users of customer loyalty programs that come as often as possible within a year. Notably, the length of time that the customer loyalty program takes may depend on the type of program’s choice. For instance, there are two basic types of loyalty programs:
- Homebuilt, in-house, or hosted reward programs, which boasts of various unknown variables and requires more customization from brand owners to build effectiveness from the targeted customers
- Software-as-a-Service (SaaS) partner reward programs are more like out-of-the-box innovative strategies to retain existing customers towards increased revenue through sustainable customer satisfaction and rewards. Many ecommerce stores such as BigCommerce and Shopify find this program very useful and perhaps because it requires less customization than others.
Hosted programs that require more customization take a longer time to implement. Furthermore, the brand may also spend even more time educating its employees about the program’s application. Brands can spend between one month and a year to develop a workable loyalty program even before the start of the hosted program. On the other hand, SaaS solutions take a shorter time to implement.
More so, because this process is quicker than others, users can implement them with fewer touchpoints. In all, implementing SaaS programs may not take more than a few weeks at most. In some cases, the implementation may take as little as a day at its lengthiest possible time. More so, apart from the choice of the loyalty program to use, perhaps the next piece of the puzzle can identify the best time to implement the loyalty programs.
When will Customers start to Trust Your Brand?
Based on a piece of professional advice derived from a new survey, it may take up to two years for your customers to completely trust and patronize your brand. In fact, in more specific terms, a customer takes up to two years of continuous dealing before agreeing that your brand product or service is one that can be trusted completely. SDL, a customer engagement company, published this fact while sampling up to 2835 people from 6 continents, five languages, nine markets, and four generations.
However, to reach the revenue topping point, it can take up to twice that amount of time: four solid years. At this point, your customers begin to spend much more money on your brand than on any other competitor. If you are more prepared for this work, you can determine to spend five years to get this done and begin to witness results. Similarly, you find it easier to treat your friends that you have remained together for more than 5 years than those you met only 1 or 2 years ago. The confidence is more natural with age-long friends than with others.
Best time to start a loyalty program
In the plot to identify the best loyalty marketing plan and program that can yield the best results for your business, three elements can help you make better decisions than others:
- Type of products
The industry your business brand is in determines the choice of loyalty program to integrate. Each of these aspects of the industry has its uptime seasons or ‘busy’ seasons that a marketing expert must consider when launching a new loyalty program campaign. For instance, ecommerce stores sell more during the festive seasons, holidays, and particularly Black Friday.
Besides, office, business, school-related stores, and suppliers sell more of their products during the back-to-school season. Similarly, fitness products may sell more during the New Year when many people are looking for ways to execute their resolutions. The time taken to implement loyalty programs includes preparation, planning, and the actual implementation.
- Length of the testing period and the launch stages
When you choose the program type, design, and customizes the new product or service, the next step is to roll out stage-by-stage all the required features and improvements throughout the timeline. Creating and nurturing a loyalty program is not a once-and-for-all system, but it demands closer attention and needs to be maintained over time.
Therefore, you may need to give yourself enough time while you focus more on the progress you would be making. A good strategy that many companies employ is the soft launch, which is a way of making the new program available to first a handful of people and getting all necessary feedback on them. When the company refines these reasons according to the received feedback, the final product is always nearly perfect.
- Size of the store or company brand
The size of your store or your business can also determine the loyalty program support that you need and when most are appropriate to launch the same. It may even be the most critical factor to consider before the start of the loyalty campaign program. In other words, it takes a reasonable time to grow and evolve into a system that can continually make more profit for the owner. Also, the process has the possibility of getting more prolonged than expected, depending on the size of the store
On a final note, we have established that the time it takes to build a formidable customer loyalty program is relatively high. But that is why there is no better time to buy a kick of such exceptional programs than on special occasions. Also, loyalty marketing program experts spend more time nurturing and cultivating the program before establishing trust with customers.