The benefits that customer loyalty programs can bring to your business.

Why you should invest in a customer loyalty program.

Today’s shoppers have more choices than ever, and that goes for more than just the selection of products and prices available to them. Not only in your local area but throughout the globe, there are countless stores vying for your customers’ money. Therefore, you need to do everything you can to elevate your brand and make your guests feel uniquely recognized and special. Implementing an effective loyalty rewards strategy is one of the best things you can do to put your business at the top of your customers’ minds.

Engaging your customers builds a better experience.

The modern shopping journey is not a transactional, one-and-done phenomenon. Today’s consumers are interested in a long-term relationship with their favorite retailers, one that will grow and deepen with time and be ultra-personalized to reflect evolving needs and trends. Today’s loyalty programs help to promote this longevity by incentivizing people to return to cash in the rewards they receive for being frequent shoppers. An effective loyalty strategy takes unique consumer shopping behaviors into account and woos buyers back with offers that are so locked into their interests and preferences that people find them hard to resist. In the end, you win with the added sales that occur as well as the positive reviews and referrals.

As a smaller business, you doubtless are having difficulty competing with the low prices that only bulk buyers such as big box stores can pull off. You might be discouraged by this situation, worrying that you will never be able to compete against these behemoths. However, personalized customer service is a secret weapon that you can deploy. It can bring you into parity with those giant retailers. Considering that over three-quarters of customers are willing to pay a little extra for customized treatment, you definitely can surpass these large competitors as long as you are willing to put a little work into your rewards system.

When you take the time to treat customers as unique human beings that you care about, they will feel the difference. It’s not just checking a box or following an algorithm; when customer care truly is genuine, a staggering 283% of customers will recognize this attention and actually value it more than your products.

The key is to create a brand identity and voice, sell products that are compatible with it and bring them to the customers who want them. Almost three-quarters of customers will pay more for a product if it’s from a brand they love and relate to. With an effective company identity and loyalty program, you can tap into this aspect of human nature to your advantage.

Loyalty programs can retain more customers.

Loyalty programs work because they reward people for coming back. Customers receive incentives for shopping repeatedly in your store; meanwhile, you get the golden opportunity to plant the seeds for a positive, evolving relationship with each buyer that can satisfy their needs and help to drive the direction of your business and marketing campaigns.

The first step to having a great loyalty program is to get it off the ground. That can happen easily with the help of your point of sale system, which should contain the necessary database and other software components. After gathering customers’ contact details and setting up your system to match purchases with the shoppers who made them, your next challenge is to maintain your program. Be sure to keep the incentives fresh and appealing so that people continue to think of your shop the next time they need to pick up a gift or stock up on products. As long as your program is clear, consistent and easy to use, you can realize a sales increase of 60-70% among your frequent buyers.

Although it takes time and effort to launch and maintain a rewards program, it’s a lot easier than courting a totally new customer. Only 5-20% of new customers make purchases, a significant drop from the 60-70%of existing shoppers who return to make other buys.

Customer retention can lead to a radical spike in profits. Expect anywhere between 25-95% percent growth with just a 5% retention rate.

You might think that your current customer base is wonderful because you can predict what they will buy. While they certainly will come back to get the products they know, trust and love, they are also 50% more likely to try new items that you are displaying. This is a win-win for you.

Customer loyalty boosts sales.

You can expect more money in your cash drawer at the end of the month when you thank your best buyers with loyalty perks. After all, who doesn’t love free or discounted goods, and who doesn’t enjoy being recognized for their patronage?

When you thank buyers for their business, they reciprocate by giving you more. In fact, regulars spend around 31% more than new customers do.

Customer lifetime value (CLV) represents the total worth of a customer over the course of their entire relationship with the brand. This figure is the revenue from all of the past and potential transactions a customer makes with your store. When you have an effective loyalty program in place, statistics show that your loyal buyer has a lifetime value that is 306% higher than the average.

Since the vast majority (9%) of buyers look to friends and family for product and brand recommendations, it is in your best interest to focus on a rewards program that is dynamic and interesting. People tend to tell their closest social and family contacts about stores and products that they value or find interesting. So, take advantage of this facet of human nature to incentivize referrals and create additional sales.

By contrast, apathetic or poor customer service creates a downward spiral for your company and helps your rivals to shine.

Today’s buyers have many options when it comes to products and sellers. When they don’t feel well-treated, they exercise their right to shop elsewhere. A full 78% of shoppers say they have abandoned a sale because of poor customer service. Don’t be the next unlucky merchant who loses money because you have failed to take the time to treat customers as unique individuals who should be listened to and are deserving of respect. Having a good loyalty program is one great way to put your money where your mouth is in this regard.

When shoppers have negative experiences, they tend to share them with their large social circles. At least 48% of consumers reported telling at least 10 people of their unhappiness with a product or the company selling it. How likely do you think it would be that any of those people would opt to make a similar purchase from a retailer who had garnered such bad press from a person they knew and cared about?

Loyalty programs generate valuable customer data.

The fact is that people are wary of sharing information about themselves to businesses. They don’t want to be deluged with mountains of spam or have their details shared far and wide. However, an effective rewards program is set up in such a way that data is kept safe from hackers and is only used by you to enhance the person’s shopping experience. Convincing someone to divulge their contact details, interests, and preferences is easy as long as you let them know that their information will be kept safe. Furthermore, you need to make it worth their while. Once trust is earned and consumers believe they will benefit from giving out their information, you will gain access to a gold mine that can boost your marketing campaigns while raising the customer’s perception of your brand.

When you let the data you collect do the talking, you can gain an estimated 23 times more customers. Modern software can break down shopping behaviors into actionable statistics that you can use to target your campaigns and keep those dynamic relationships growing.

When data is used to court, cultivate and keep buyers, you can expect an average of an 8% increase in your profits.

If your data analysis seems lackluster or outdated, you might be one of the 65% of companies that are coming to understand the importance of improving your data-related protocols and practices. Now is the time to speak with your payment processing company about upgrading your software or equipment or learning about all your point of sale system has to offer in terms of data analysis and report generation.

Tapping into powerful customer data is a trend that shows no signs of abating. It has increased by over 62% in recent years. So don’t be the last one on your literal or virtual block to realize the power of information analysis and a cutting-edge customer rewards strategy.

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