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.