Why Customer Loyalty Programs are Key for Your Business
According to an average of major consumer studies conducted in 2015, an increase of 5 percent in customer loyalty can lead to a 25 percent to 100 percent increase in profit per customer, and on average, loyal customers are 10 times more valuable than first-time customers.
Therefore, it is clear little beats customer loyalty and retention when it comes to guaranteeing business continuity.
How can a business increase customer loyalty?
Customer loyalty programs are very effective when it comes to retaining customers. In a competitive market where customers can make snap decisions to switch their service providers or suppliers, customer retention programs can make all the difference.
In fact, 69 percent of customers say that loyalty programs influence their choice of retailer. Customers join loyalty programs because they want to save money (57 percent) and receive rewards (37.5 percent). Fifty percent of customers say they would change their behavior to reach a higher tier of customer loyalty program.
Accordingly, 76 percent of customers believe that loyalty program deepens their relationship with brands. This view is shared by 64 percent of retailers who view customer retention programs as the best way to connect with customers.
With both traditional or e-commerce business, merchants are now implementing a popular process, as outlined below. An effective and engaging customer loyalty program can work to positively enhance all aspects of this cycle.
Customer retention isn’t always easy
Sustained customer loyalty programs can see the average customer spend 67 percent more. This means that loyalty programs aren’t short-term customer retention strategies. The longer the customer enjoys your loyalty program, the more likely that person will remain loyal to your brand.
However, many brands say customer retention is their biggest obstacle. Customers are becoming more and more enlightened and choosy; they won’t settle for second-rate products even if that means switching companies. Sixty-six percent of customers say they consider poor customer service as the main determinant when changing companies. Therefore, it is important to ensure you have excellent customer service, as well as a great product.
Brand recognition is also another important factor that increases customer loyalty. In other words, customer retention doesn’t just happen. You have to work hard for it.
If you haven’t set up a loyalty program, then you are likely missing out on significant revenue because 83 percent of customers say loyalty programs can influence them to make a buying decision. Almost any business can implement a loyalty program; and, although setting up reward programs requires effort, it is almost entirely worth it. Savvy loyalty programs can help improve a business' brand recognition, increase growth, and improve customer service.
Attila Business Solutions specializes in developing versatile loyalty and rewards solutions to deliver our clients the tools they need to positively impact their business results. Moreover, you’ll have full visibility into metrics for more effective campaign management and your brand will remain top of mind when consumers shop and “tell a friend” – generating a positive impression of the brand and a sustainable revenue stream. Contact us to learn more: +1 (833) 398-0062.