Customer loyalty programs reward customers who repeatedly interact with a brand. It’s a customer retention strategy that encourages customers to continue buying from your brand rather than competitors. The more a customer buys or engages with the brand, the more rewards they earn.
How customer loyalty programs work?
With a loyalty program, companies can offer points or benefits to customers. And in return, they redeem points for discounts, free products, rewards, or insider perks. The goal is to motivate repeat purchases and build trust between customer and business.
Running a customer loyalty program means you’ll need to give away something. Be it discounts, sales, early access, etc. But the payoff for having rewards programs are huge:
More customer referrals.
If you have a great loyalty rewards program, people may tell their friends and family about it. More referrals equals more customers.
Higher customer retention.
If people find value in your customer loyalty program, they’ll likely stick around longer.
Want a higher average order value? According to recent loyalty research, 49% of consumers agree they’ve spent more after joining a loyalty program.
A successful loyalty program can turn regular customers into brand advocates. This group helps your company get in front of new customers through word of mouth, which is a low-cost marketing strategy versus paid ads.
But not every loyalty program is the same. There are different types of rewards programs you can use to build customer loyalty and earn repeat purchases.
When to add a loyalty program for your business
Every business today is competing for customer trust. One of the best ways to build this trust is through gratitude and providing customers with an experience they can’t find anywhere else. Rather than spending your time finding new customers, you can start a loyalty program to grow the relationship with your existing customers.
Do things differently with your loyalty program
Over the last decade, customer loyalty programs and rewards programs have proven they’re an effective way to improve customer retention rates, boost customer lifetime value, provide good customer service, and inspire brand loyalty. While the low-key punch card has its place for some businesses, a truly innovative approach to customer loyalty programs can create huge value for retailers.
How will you reward customer loyalty with your own loyalty program?
“Establish customer loyalty from day one by ensuring that customer experience is taken into consideration for every customer touch point. This includes touch points before, during, and after purchase. Even if you don’t create a loyalty program from the get-go, you can always ensure that each customer has a positive customer experience.”