Did you know that it costs businesses ten times more to grab new customers than to sell to existing ones? Moreover, current customers spend over 80% more money than new customers irrespective of the business if you offer them loyalty card solutions.
This is the reason why brands invest heavily inloyalty and rewards programs. In a dedicated retailer’s marketing toolkit, loyalty programs have undoubtedly been the most effective and revenue-generating tactics.
One thing all these businesses have in common is the goal to attract new customers while keeping the older customers coming back to them again. They also want to grab their competitor’s customers, which can be tricky because now more than ever, consumers have a vast range of choices to pick from. And most businesses are doing a remarkable job in differentiating themselves from others in the market to ensure customers keeping coming back to them only by offering a range of loyalty card solutions.
In the light of increasingly intense competition and statistics, all businesses need to think about what they are doing to keep their old customers hooked to them while attracting the new ones. And one of the most effective ways of doing this is by issuing a gift card program. Although low margin businesses can’t really afford a customer loyalty program, in today’s competitive age, with meager and declining costs, and the added benefit of less upfront costs, it will be foolish not to have your loyalty program that offers rewards to your customers.
A loyalty program is an exclusive scheme offered by a business to its customers who frequently make purchases. The program may offer its customers coupons, discounts, free merchandise, and even advance access to unreleased products and services. Most importantly, these programs provide customers incentives that will reduce the chances of them switching to other brands by providing better quality through loyalty card solutions.
Selling to your existing customers is more manageable than attracting new ones. Remember this!
Do you want your current customers to come back to only you?
Why should you do that? Let’s start with the most logical reasoning: because it will give you a better return hence more money.
That is, only if you do offer the right loyalty card solutions.
Here’s a little but quick math worth remembering, retaining an existing customer would cost you 4-6 times less as compared to acquiring a new one, depending on the industry your business belongs to. According to Dailymail.co.uk small businesses spend between $6000 and $11,000 to attract new customers on paid Google campaigns within just months on average. So, we know re-activating customers is crucial, but why else should you invest in a customer loyalty program?
Through a well-crafted loyalty program, companies can filter and reward profitable customers, hence minimizing the payout to not so regular and beneficial customers. Without any iota of doubt, this is the most efficient and successful way to retain the most profitable customers for the company by offering them loyalty card solutions they can’t resist.
Your loyalty program will offer you a direct line to customers, making your communication much smoother. Other than announcing new services and products, promoting sales and offers, a helpful con for programs is that they initiate enough recalls when necessary. This is possible through the barcode and the purchase date of the said item. The recall reminder gets more weight and significance as it is based on the actual purchase of the consumer. Compared to a newsletter or a subscription email, there are more chances that this reminder will get read by more users.
According to Forbes, 80% of online buyers will leave your cart if they experience poor customer service within the first three days. That’s a quick way to lose a potential long term customer.
Furthermore, at this point, it’s not just about customer support but also about the way you show appreciation for your customers for buying your goods and services. A good program provides the ideal vehicle to do this.
Let’s take a little tour of what psychology has to say about this technique.
When your customers see that they can grab points in exchange for the purchases, the first thought they have is, ‘ This is incredible! I can get something extra for my money other than what I purchased!”
This positive shopping experience will invoke a desire to ‘become more loyal and return the favor,’ encouraging buyers to purchase your products again. This phycological rule is called reciprocity and works for 90% of online brands that offer a loyalty card solution.
Ever recall why your friends collected stars at Starbucks? Because they would get a free drink or a snack after the 12th purchase. (Although, this reward mechanism was only applicable in certain regions.)
The point here is that your customers are loyal to you because they save money by purchasing from your brand and have had a comfortable experience. This is a classic and timeless program that has appealed to a wide scale of customers in every circle of business. Nowadays, almost 80% of your buyers will expect some recognition besides mere monetary benefits, like a special customer perk that gives them a faster, smoother, and a more personalized buying experience.
The primary and main agenda behind a loyalty program is to retain customers by rewarding them for their repeat purchase behavior. Their repeated transactions increases when their regular store persona
lizes their purchase and gives them special offers through a loyalty card solution for being a regular customer. Something that they will take time to establish with another brand.
A Dutch study showed that a loyalty program would bring the following changes:
. Increase overall profit by 8-10%.
. Members spend 10-25% more money than non-members on average.
. Members buy 8-20% more frequently than non-members on average.
. Increased Cart Value.
A company can collect the past purchasing history of its customers to up-sell and cross-sell its products. It can suggest accessories, offer extended warranties after an item is purchased, and provide a discount on related products. Plus, the loyalty program can increase sales during slow seasons.
The best example is hotels and airliners, offering you discounted rooms and flights during quiet months. They often provide a loyalty card solution when you are checking out from the hotel or the plane.
While designing and implementing a loyalty card solution, you should realize it’s an investment, customer retention strategies are always less costly than attracting a new group of customers, which is the advantage you gain through a loyalty program.
A detailed, well thought and a personalized program will make your customers feel valued and appreciated. They will feel like they have an emotional connection with your brand. You can enhance the appreciation by adapting a “surprise and delight” reward feature for special occasions such as mother’s day, customer’s birthday, or fourth of July.
Personalizing your customer’s shopping experience through collected data, you can offer suggestions to your customers, which will increase the chances of them purchasing the suggested product.
Your reward programs will keep your customers bound and interested in your brand even if they are not purchasing anything.
A well-designed rewards program will attract new customers in many ways. Firstly, when you offer points and discounts for a signup, you will automatically be able to add them to your mailing list and therefore send them regular updates about discount sales. Meanwhile, if a potential customer sees a decent program where rewards are beneficial for them, they are highly likely to purchase from your brand if they have a loyalty cardat their disposal.
Any good reality program doesn’t need to be concrete and stagnant. Your loyalty card solution may be sufficient, but you can also improvise on it based on trends and needs of the hour. You can keep improving it by adding more marketing aspects, including visual commerce and referral discounts and coupons. By offering unique loyalty programs, you can turn your customers into advocates for your brand since the majority of modern customers require suggestions and reviews from peers to foster loyal customers. They will act as unofficial brand ambassadors that enjoy your loyalty and rewards.
Your loyalty card solution program’s main aim, from your point of view, is to make more money and retain your current customers. They can thankfully achieve this because they are incredibly cost-effective and word-of-mouth based and will help increase your brand’s social proof. It is pretty clear how effective a reward program can be for your brand.It will increase your profit while focusing on your customers and improving the relationship by adding value to their shopping experience.
Need help in setting up a reward program for your customers? Contact us, and we`ll get this done right away!