All About Loyalty Marketing For Business
Many people associate the quality of loyalty with their families, close friends, even their dogs. Loyalty plays a part in most of our daily activities. The brand of toothpaste most of us use each morning probably is one we have used for years, as maybe our coffee, soap and cleaning solutions. We generally order from the same pizza delivery service, visit a dry cleaner whose face we know and whose reputation we trust.
As a result, when you looked up the word ‘loyalty’ in the dictionary, it’s not surprising that the definition of loyalty is faithfulness; advocacy, devotion; constancy.
What is Loyalty Marketing?
Loyalty Marketing is an approach to marketing, based on strategic management, in which a company focuses on growing and retaining existing customers through incentives. Marketing efforts designed to entice customers to make purchases again and again from a specific company.
Customer loyalty is something that all companies should aspire to simply by virtue of their existence: The point of starting a for-profit company is to attract and keep happy customers who buy your products to drive revenue. Loyal customers convert and spend more with brands they’re loyal too more often, and they tell their friends and colleagues about those brands, which helps drive free referrals.
There’s a lot of data to support the value of cultivating customer loyalty:
- Loyal customers convert and spend with brands they like more often.
- Loyal customers spend more than others.
- Loyal customers tell their family and friends about positive experiences. Word-of-mouth marketing is more effective at driving new customers than branded content and advertising, and in turn, these referred customers become loyal customers that are likely to spend more than average.
Do Loyalty Program Increase Sales?
The short answer is yes; loyalty programs increase sales. However, it’s not as simple as creating a loyalty program for your brand and watching your profits soar through the roof. A loyalty program needs to be well-designed and implemented in order to have a highly positive impact on sales. It’s not about creating a loyalty program – it’s about creating an emotional connection between your brand and your customers, and loyalty programs are the best way to do this.
Increasing customer retention helps boost profits simply because loyal customers already have trust in your brand and therefore are likely to spend more.
What other benefits that Loyalty Program can offer?
Besides increasing the sales, here are some benefits of Loyalty Program:
- Save money
While creating and implementing a loyalty program is an investment, customer retention strategies are often less expensive than attracting new customers. Acquiring new customers can be 25% more expensive than retaining current customers.
- Gather valuable data
Most modern consumers prefer a personalized experience, with more than half of Millennials reporting personalization as a high priority. By encouraging your customers to fill out profiles as part of your loyalty program, you can get the data so you can not only personalize customer experience, but to also create targeted marketing campaigns ,and increase your bond with customers.
- Consumers feel appreciated
A comprehensive, personalized loyalty program will make your customers feel like they have an emotional connection with your brand and will increase customer patience in case of mishaps. You can increase appreciation by incorporating “surprise and delight” points or rewards for special occasions such as a customer’s birthday.
- Attract new customer
A good reward program can attract new customers in several ways. First, if you offer points or discounts for signup, you will automatically be able to add new customers to your mailing list simply because customers want to take advantage of discounts. Meanwhile, if a customer sees a good loyalty program where rewards are within reach, they are more likely to try your brand simply because the rewards are easily accessible.
By creating a comprehensive loyalty program that allows for modern marketing techniques, you can turn your customers into advocates for your brand. Since modern consumers trust peers over advertising, fostering loyal customers who will then speak out on your behalf is simply a smart business move. Give it a try and good luck!
Interested in launching a loyalty marketing program? Here are 5 companies which can help you with it!