How Your Brand Benefits From A Loyalty Program

Customer loyalty programs offer brand benefits that outweigh the initial implementation costs and effort. While building out a rewards program requires upfront investment in areas like web and app development and customer data management, a loyalty program can be a crucial tool for long-term success and growth for many brands, especially those in competitive markets or with repeat purchase potential.

Does Your Brand Need a Rewards Program?

Loyalty programs benefit both buyers and businesses. When customers make repeat purchases, it increases the company’s revenue. As a reward for their loyalty, customers receive exclusive benefits, freebies, discounts, early access to products, and more. Some things to consider when deciding if your brand needs a loyalty program:

• Brands have a 60-70% chance of selling to an existing customer, compared to a 5-20% chance of selling to a potential buyer
• 75% of consumers will favor a brand with a loyalty program
• A mere 5% increase in customer retention correlates to a 25% increase in profit
• Loyalty program members generate 12-18% more revenue per year than non-members

Brand Benefits of Loyalty Programs

Loyal customers become more profitable as retail relationships mature. They buy more, pay premium prices, and refer new customers. Loyalty programs indirectly create other benefits for brands that include:

• Data Discovery and Monetization

With Google phasing out third-party cookies, marketers will have to switch gears to first-party tools like an all-inclusive CRM, email automation, and email marketing platform. Customers willingly give their information when signing up for rewards, providing loyalty preferences and behavioral and sales data to create curated loyalty experiences, personalized content, and offers.

• Higher Order Value and Shopping Frequency

Increase basket value with specialized features so loyal customers buy more in one visit, like offering a discount on a favorite product on their next visit.

• Increase Customer Lifetime Value (LTV)

Customer lifetime value (LTV) is the average revenue a customer generates over their entire relationship with a brand. An effective loyalty program encourages repeat purchases and fosters brand advocacy over time.

• Improve Customer Retention Rates

A high customer retention rate indicates customers are satisfied with your services and unlikely to switch to a competitor. Analyze customer data from your loyalty system to engage with customers and guide them back for purchases.

• Enhance User Experience

A report showed that 82% of consumers would be willing to give up some personal information if it led to a better experience. Word-of-mouth is a major factor in 74% of consumer purchasing decisions, so if you create an exceptional user experience, your customers will spread the word.

• Set Yourself Apart from Competitors

If a customer is choosing between similar businesses, a loyalty program could be a key deciding factor. Customer rewards programs can help you stand out from other brands that haven’t yet implemented one. Allowing loyal customers to purchase products at a lower price than your competitors is a valuable reward for almost any buyer.

Trademarks of a Successful Loyalty Program

A customer loyalty program that works tends to include the same hallmarks:

• Belief in the Program

Strategy is a big puzzle piece for any successful loyalty program. They take time and effort, so keep in mind all the connections between behavior motivations and engagement encouragers.

• Loyalty Strategy Fits Company Strategy

Integrating the loyalty scheme into the company’s strategic plans is an absolute necessity since you can’t build and implement a loyalty and rewards program without approval from the board.

• Skilled Loyalty Manager

You need someone who knows what they’re doing to create and run your customer loyalty program. Someone who can clearly define your goals, starting small but building as you go. A marketing expert who can craft a bold strategy focusing on value proposition, benefits, and rewards. Someone who can build partnerships to refine incentives, while monitoring, analyzing, and adjusting said strategy on the fly.

• Proven Loyalty Program Platform

Loyalty program software can be custom-developed to fit each brand’s needs, but loyal customers expect it to be trustworthy and secure. It should also provide two-factor authentication (2FA) to prevent customer data from being compromised. Provide quick responses to system failures and think long-term by implementing scalability for flexible changes as your business grows.

 

Programs can be customized to fit your needs, from loyalty card programs to website integration and custom app development. When you need a proven digital partner with the loyalty program experience you need to build brand awareness and customer loyalty, Plan Left can help.