Why Your Business Should Offer a Loyalty Program
Businesses today face increasing competition. Not only are you competing with businesses down the road. Now, you’re in constant competition with businesses across the globe. The internet has shown us just how small the world truly is—especially when it comes to business.
Which is why it’s now more important than ever to go the extra mile to create loyal customers who come back, time and time again. Whether your business is on the web, around the block, or operates in both realms, you want all your customers to become “frequent flyers.” Loyalty programs are excellent tools for doing just that.
Still wondering why you should consider offering a loyalty reward program? How about this:
- 63 percent of mobile shoppers in the U.S. report increasing store visits as direct results of interacting with the store’s mobile loyalty programs.
- 73 percent of consumers are more likely to recommend brands based on the quality of their loyalty programs.
- 81 percent of consumers consider loyalty programs to be huge incentives for them to continue doing business with an organization.
In other words, offering loyalty programs benefits businesses directly and tangibly. The key is to make it worth the while of your customers to participate and to make participation as convenient as possible. Many find mobile device linking to be the best way to go and requiring physical cards to be among the worst.
What is a Loyalty Program?
Loyalty programs are where businesses offer incentives for returning customers. It is a structured program that offers specific incentives or rewards for people who do repeat business with your organization. There are many different types of loyalty programs, including:
Many credit card companies use points-based credit card loyalty programs. With these systems, customers earn a certain number of points that can later be redeemed for specific items, discounts, and other “perks.”
Tiered programs are highly effective in that they offer instant gratification for signing up (or very short-term rewards) and then the opportunity to earn rewards of increasing benefit over time. This program is most successful when you make concerted efforts to remind customers about the next level (and how close they are to achieving it) every time they stop. You want them to want to earn their next reward.
Fee-based loyalty programs. These programs bring customers into the fold by promising they get what they pay for—and more! Amazon Prime is an excellent example. By offering free two-day shipping, something most customers agree is worth the price of membership alone, they have loyal customers year after year.
Types of Rewards Used in Loyalty Programs
No loyalty program is complete without a long list of rewards. You don’t have to go all out with free air travel, like airline rewards programs. But, you can offer a wide range of incentives to keep your customers coming back for more, including:
- Free items
- Discounted items
- Cash back
- Free shipping
- Flexible return policies
- Exclusive shopping events (preview hours, etc.)
- Free services
From hair salons, to coffee shops, and a few boutiques in between, there are many opportunities to offer loyalty programs that bring business back through your doors, week after week, and day after day.
Benefits of Creating a Loyalty Program for Your Business
Did you know that it costs seven times less to keep an existing customer than it does to acquire a new one? One of the biggest benefits of a customer loyalty program is that it does help you create a loyal base of repeat customers, for substantially less than it costs to acquire new ones. Other benefits include:
- Encourage customers to spend more (especially in points and tiered loyalty programs)
- Provide you with important data about your customers and their spending habits
- Allow you to differentiate yourself from your competition with a well planned, thought out, and executed program
- Creates effective word of mouth advertising, with 73 percent of loyalty program participants agreeing they are more likely to recommend your brand or products if you have a good loyalty program
- Encourage specific buying actions by incentivizing them through your loyalty program
You don’t have to step too far outside the box to create an effective loyalty program that brings in repeat business to your organization. BankCard Services can help. Contact us today to learn how to make an effective loyalty program for your business and how to keep track of customer progress with free equipment and no long-term contracts.