Starbucks Rewards.
REI Co-Op.
Movie theater reward programs.
We’re all familiar with customer loyalty programs that reward us for staying true to a brand. Offering repeat customers exclusive discounts and perks such as product previews and invite-only status to events, these incentivized groups look to make casual customers brand advocates.
Overall, 82.4 percent of respondents said they would be “more likely” or “much more likely” to shop at stores that offered loyalty programs. With a minimum initial investment of time and money, loyalty programs can promote customer retention, support growth and create great word of mouth.
Customer Retention
In 1906, an Italian economist Vilfredo Pareto found that 80% of the land in Italy was owned by 20% of the population. And that this 80/20 distribution was pretty standard across business worlds, that generally 20% of your customers represent 80% of your sales. The Pareto Principle, or “80/20 Rule”, plays into understanding the value of customer loyalty programs. If you reward your top 20% of loyal customers, through incentivization and exclusive experiences, you are affecting those that account for roughly 80% of your business. So, simply put, it pays to keep these consumers happy. Through loyalty programs, you have a direct line of communication with your most loyal customers. Not only can you make their experience rewarding and personal, you can also gain a solid snapshot of your customer base – buying habits, the effectiveness of various incentives and purchasing trends.
Support Growth
By forming a relationship with your customer base, rewards programs set you apart from other businesses and may be more attractive to buyers when looking to make a choice. Loyalty programs are estimated to increase overall revenue by 5-10% with members spending 5-20% more than non-members on average.
Share the Love
To get customer love, you have to spread a little brand love from your end. Offering incentives that truly benefit customers, such as VIP sales events and exclusive offers with opportunities to be the first to try a new product, help generate a connection and relationship with your customer. A happy, loyal customer promotes good word of mouth is one of the best promoters of your brand.
There are a lot of options out there to help you manage your loyalty program so do your research up front and get on board with the right program for your business. If you are looking to create a customer loyalty program to suit your business needs, reach out to us at Beverly Cornell Consulting and we can get you started with the right platform and incentive plan to get your program off the ground
Sources:
https://www.forbes.com/sites/forbesagencycouncil/2018/05/21/five-ways-to-ensure-your-marketing-strategy-doesnt-get-hit-from-industry-changes/#4c0cfcd4200b
https://www.forbes.com/sites/davelavinsky/2014/01/20/pareto-principle-how-to-use-it-to-dramatically-grow-your-business/#188936283901
