The loyalty program is in the limelight for quite some time now. They have been here since the 1990s in the form of retail loyalty initiatives. Besides big brands, even SMBs are using them as tools to improve customer engagement. Are you confused about whether your business should consider investing in loyalty programs? Here are factors strong enough to convince you.
7 Factors Your Businesses Can Introduce Loyalty Program
1. Ability to increase sales for SMBs
You can incentivize buying behaviour by offering discounts and loyalty points. Existing consumers tend to return and buy more often when they receive rewards. These return visits result in more sales and customer loyalty. Thus, loyalty programs prove to be an effective marketing technique.
Plus, happy consumers refer your business to others. They help your enterprise reach a broader customer base.
2. A crucial role in gathering valuable data
Personalization is a high priority for Millennials. Such consumers willingly share information for joining rewards programs.
Businesses can benefit due to this data. It helps AI-based systems in developing tailor-made marketing campaigns. Offering a personalized consumer experience also becomes easy.
Loyalty program data helps in communicating critical information during emergencies. The most brilliant case to prove the point is that of the frozen food products recalled at Costco. The company used rewards programs data to connect with customers. Buyers received the information about food contamination on time.
The broad data collection enables you to know your consumers. You can make better business decisions.
3. Consumers feel appreciated
Every customer wants recognition for loyalty towards the brand. Buyers join the program to gain something. A reward does not need to be money. You can offer points, a complimentary beverage, or a discount on the next purchase.
Customers feel valued when they receive rewards during each interaction with the brand. The feeling of being recognized strengthens their relationship with you.
The attachment can increase their purchase frequency. They develop an emotional connection with the brand. Buyers won’t take their business elsewhere in case you fail to meet their expectations.
4. Improved sales and revenue
Can loyalty programs boost revenue for SMBs? As an entrepreneur or a key decision-maker for the business, you would want a clear answer backed by data.
The research-backed fact is that these initiatives can make consumers choose you over your competitors.
A study published by Bond market research offers clear answers. The research involved 22,000 American participants. Roughly 79 percent of them said customer loyalty programs influence their purchases.
5. Role of loyalty apps in improving communication and engagement
Are you looking for ways to remain engaged with consumers? If so, a loyalty management platform or loyalty program app can be a great way to reach the customer’s phone.
Applications do have the potential to transform loyalty programs. Starbucks, Sephora, Olimp Labs have already proved their relevance.
A considerable percentage of consumers prefer joining app-based loyalty programs. They wish to access rewards and incentives information via their phone. Mobile applications deliver personalized experiences. Buying behaviour data gathered from mobile apps can help in tailoring marketing efforts.
Loyalty program apps can keep customers informed about details for accumulated reward points. Their responses to various notifications, including offers, can help strengthen relationships.
No one appreciates the bombarding of irrelevant information and offers. But, consumers see reward points notifications as a benefit rather than an intrusion.
Buyers remain in your brand ecosystem while using loyalty program apps. They are likely to buy more when targeted with the right offer in the app.
6. App offers the ability to distinguish your brand from others
You must have noticed that most eCommerce websites run by small players look common. In some cases, there’s nothing different than the company logo. Even their product features list, description, price, and shipping charges match.
You might wonder, what’s the catch here? The moral of the story is your loyalty program needs to be different. You can shake things up by launching an app-based loyalty program built around your brand mission.
7. Stats highlighting the significance
As per Accenture data, there are more than 3.3 billion loyalty program members in the United States alone. The same study indicated rewards could influence buying decisions of young online shoppers.
Another study from Yotpo highlights roughly 41 percent of consumers remain loyal to brands that offer such initiatives.
Now, you might wonder if people do show interest in joining such programs. The answer is surprising. A recent poll conducted by Synchrony Financial indicated 80 percent of shoppers in the US have enrolled in at least one loyalty program.
Quick tips for building a customer loyalty program
Apparel, drugstores, dining, groceries, and related initiatives are the most popular. Those focused on airlines, automotive, consumer electronics, and home goods make it in the second list.
Can the program fulfill your business requirements? Does it suit your brand identity? Which types of incentives will your consumers appreciate as a part of a loyalty program? These are crucial questions that need consideration.
Loyalty programs should complement the business. The success of a loyalty program usually relies on the business type. A restaurant nearby an airport may not need a loyalty program as are travellers only eat while at the airport.
Discounts, rewards, points, cashback, hybrid loyalty, tiered loyalty programs can prove suitable for most sectors.
There is a clear link between brand loyalty, retention percentage, and increase in profits. A well-curated app-based loyalty program can result in a positive impact on sales.