How a Loyalty Program Can Improve Retention Rates
Are you losing business to a rival competitor?
Maybe your business’ multi-channel operations too complex for your consumers to follow.
You might not expect the solution to come to you through a loyalty program. Rewarding customer loyalty, though, can improve your client retention rate, boost your sales and make it easier for your consumers to make sense of your brand as a whole.
So, do you need one today?
The Truth About Loyalty Programs
Before diving headfirst into these benefits, let’s get skeptical. How many consumers actually join the average loyalty program?
Actually, around 52 percent. When your loyalty program is well-structured, it promotes repeat business. How? By offering loyal consumers the opportunity to save money filling a need or taking in something of value.
In short, loyalty programs increase brand engagement and retention rates. More engagement means more financial stability for you—not to mention the opportunity for your business to grow.
Loyalty Programs, Meet Word of Mouth
Consider the loyalty program offered by the popular grocery store chain, Kroger. The program allows consumers to save money on groceries and convert their savings into gas points at Kroger gas stations.
The best part is that referral-based business growth costs you no money at all to facilitate. Loyalty programs actively make you money, but this word-of-mouth referral strategy also saves money on your marketing budget. Good news all around.
Loyalty programs also have the potential to reward your consumers for interacting with multiple aspects of your business. Maybe that means rewarding customers for shopping in your mobile app instead of in-store, or encouraging brick and mortar traffic to find you online. By encouraging these interactions, you’ll make it easier for consumers to understand how your business works. A loyalty-based rewards system can go far in making your business more accessible.
Maybe you’re taking in reasonable revenue but can’t seem to generate consumer interest in your social media accounts. A loyalty program can help here, too. Try integrating rewards: something like, “tweet at this business account and earn a 10% off coupon.”
Not only will you draw more eyes to your other channels, but you’ll also bolster an online reputation.
Setting Loyalty Boundaries
Do you know where to draw the line? 76 percent of American consumers prefer to sign up with programs that only need a name and phone number, or name and email. Asking for more information—or worse, asking people to create full profiles with username and passwords—has the power to alienate up to 71 percent of your consumer audience.
Obviously, loyalty programs differ in size and shape and scale. Find the proper balance for yours, and you’ll reap the rewards with your customers to gain the one true benefit: a loyal clientele.
Image attribution: Andrey Popov – stock.adobe.com