5 KEYS TO MAKE YOUR LOYALTY PROGRAM MORE PROFITABLE

Gone are the days when businesses would offer discounts to customers in the name of a b2b loyalty program to motivate them to keep coming back for patronage. Recently research on customer behavior has revealed that merely offering discounts to customers or giving them free products after they have bought some amount of goods does not appeal to customers anymore. Those moves are not strong enough to earn customers’ loyalty to your brand. 

Customers want a brand that can understand their ultimate needs and address them when they needed it the most. They want you to show them that you care about them, esteem them and value every penny they spend for your business. 

Every business has competitors. You need to be aware that your competitors want the same customers patronizing your business – that’s the reason you should learn how to make your loyalty program different from others to achieve your business goals.

Unfortunately, customers want to split their income among competitors since it appears they offer similar services. A smart business owner will look for ways to engage its customers to prevent them from smashing their income among these competitors. Consumer engagement is key to the success of an effective loyalty program.

Yes, one of the best ways to retain every customer that knocks on your business door is to establish a simple to use loyalty program. Yet, many loyalty programs have failed because they ignore some key elements that get customers excited about returning to their business. 

Meanwhile, you don’t have to unnecessarily spend big money to make your program enticing to your customers; you only have to learn the tricks. Let’s discuss the five keys to make your loyalty program more profitable without extra cost and complexity to get a better understanding. 

1. Use a simple point program

A simple point program is the most profitable out of every type of loyalty and rewards program. This type of program is the most common because companies find it easy to operate, and it is easy to understand for customers. 

While other types of programs seem more advanced ways to engage customers, offering simple stamp cards or punch cards can help you big in encouraging your customers to remain loyal to your business for an extended period. Though it doesn’t look too modern, it is a simple old trick that works.  

Customers want to join a program that is less complicated and easy to access. When the reward system is too complicated, it may decrease members’ participation and increase the program’s cost. 

More so, the time you will spend explaining how the program works to your employees and customers can be a hidden cost. Choosing a simple point program will encourage your customers to join the program and cost you less money.

2. Combine Loyalty cards with loyalty apps

The primary goal of every loyalty program is to draw customers to your business. If you want to achieve that, you need to ensure your program is engaging and accessible to customers. You should understand that you are dealing with different kinds of people with different levels of socialization. While some customers prefer a plastic loyalty card, others may like to participate in the program through their mobile devices. 

Combining a plastic loyalty card with a loyalty app will increase your customers’ participation. Especially in this new age where people spend most of their on their mobile devices, you can take the advantage to boost your customers’ involvement. 

The bottom line is, your diversified customers should have access to your loyalty and rewards program via several means if you want to maximize the number of your customers’ engagement.

3. Offer appealing rewards

As you seek to build and expand a large customer base, know that your customers are also seeking what benefits them. Your loyalty and rewards program might not get you the loyalty you desire if those rewards you offer are not tangible enough to influence your customers’ behavior. 

For instance, offering reward cards that merely give back some money to your customers after many purchases cannot influence your customers’ behavior. Indeed, they might not even remember that after a while. 

Instead, offer great rewards that serve your customers’ ultimate needs and see how much they flock into your business. Great rewards change customers’ behavior. Hence, sit down with your creative team to analyze what reward you can offer to influence your customers’ buy, why, when, and how often they buy. Great and appealing rewards also help to motivate customers to keep patronizing.

4. Incorporate Automated Email marketing

If you are so keen to influence your customers’ behavior, automated email marketing can be your best bet. Without a doubt, it’s one of the easiest ways to control how often your customers patronize your business. Direct Marketing Association claimed that email marketing brings the highest ROI on the average $40 on every dollar spent. 

Customers feel good when they receive emails from the store where they spend their money. To them, it shows that you recognize them and value every penny they spend on your products or services. 

Meanwhile, you may have to use digital means to get your customers’ contact information and behavioral data. Loyalty marketing involves reaching out to your customers, reminding them of new products, upcoming events, and special offers. You can also utilize automated email campaigns to contact some customers who have not patronized your business in a few months. 

5. Sell cards through your loyalty program.

There’s no better way to sell your gift cards than via a loyalty program. The loyalty program helps you to gather a long list of customers’ contact information. You can take this advantage to sell cards to your customers in November and December when the sales of gift cards are generally high. 

Engaging your customers via an effective loyalty program provides your business with the opportunity to connect with your customers on an intimate level. By offering influential rewards through a simple reward system, you encourage more customer visits and record more profits along the way.

How to Build Customer Loyalty in 2021

Building customer loyalty through workable programs should be a priority for top companies in 2021. Else, such companies may not reach their marketing goals for the year. Howard Schultz stated that “if people believe they share values with a company, they stay loyal to the brand.” Besides, statistics show that 20% of the current existing customers of a brand are responsible for driving 80% of future profits of that brand. 

This fact indicates that businesses that thrive more in the coming days need to spend more effective time building and to sustain a customer loyalty program. Achieving this feat ensures that the company brand achieves maximum profit that can stand the test of time. Also, there are tremendous reasons why businesses don’t get the expected results due to several reasons. However, this article focuses more on the right strategies to build a formidable customer loyalty program. 

Best Strategies to Build Excellent Customer Loyalty Program

1. Increase the Probability to Sell to Existing Customers

When approaching a new customer, the probability of eventually selling to them is only between 5 and 20%. On the other hand, the probability of selling to an existing customer is between 60 and 70%, which is a greater chance. The fact is simple: existing customers already have some level of trust for your brand, and you may not have to spend much time and resources to convince them, unlike new customers. 

Similar to an increased probability to sell to existing customers, the knowledge and experience of these customers. Therefore, when you recommend a brand product or service to both new and existing customers, the latter is more likely to buy due to the existing relationship. Consequently, the company can profit from extra sales without spending so much money on marketing.

2. Work more on increasing positive customer feedback

The impact of positive feedbacks and customer reviews cannot be overemphasized as one of the most profitable marketing and brand-building strategies. When new customers try out your product, service, or interact with any of your brand interfaces and get excellent quality, they are willing to leave the right word behind to convince others. These useful reports or feedback can also build a brand reputation and make it easier to reach more potential customers.

However, customers look out for brands they can quickly and emotionally connect with, where the bonding builds a lasting relationship. Such satisfied customers readily provide great feedback in honest opinions and respond to relevant queries about the product and service satisfaction. This feedback can also constitute part of customer endorsement of brands, which has shown its effectiveness in growing a business.

3. Incentivize your Business Referral Program

Many top businesses are presently using affiliate programs to boost their marketing and conversion chances. There is a viable way to combine both referral programs and loyalty programs towards the most significant yield of productivity. In other words, referrals can get new customers while loyalty programs can make them stay for longer fruitful relationships. Some of the specific areas where your affiliate or referral programs can bring profit include:

• The use of targeted promotions
• Using a robust network of advocates for the business brand
• Use of personalized incentives for the customers, a form of customer loyalty reward program

By the way, a loyalty program is slightly different from a referral program. The latter instead incentivizes customers so that they may convince their family and friends to purchase the product. On the other hand, a customer loyalty program encourages targeted existing customers to make repeated purchases from the company brand. Therefore, the ability to retain such customers can further build upon customer acquisition through referral programs. 

4. Personalize your marketing programs

As competitive as marketing programs are, a business brand must always be aware of the existing competition in the market and actively seek ways to stay afloat. One of the recommended ways to maintain a viable relationship with new and existing customers is the communication process, which must also be personalized to get great results. With personalized marketing strategies, brands can attract customers and gradually build trust and a good reputation.

Personalizing your marketing efforts also allows your targeted audience to make the difference between your brand and your competitors. However, personalization depends on the ability to acquire some customer data through business marketing intelligence. The vital information may include customer’s preferences of product type, shopping choices, location, spending habits, online behaviors, buying decisions, shopping time, and other business-related details. 

5. Decrease the cost of new customer acquisition

Ideally, the cost of acquiring new customers through new marketing strategies can be relatively high. For instance, a report showed that it takes up to five times the effort of selling to an existing customer to sell to a new customer https://www.invespcro.com/blog/customer-acquisition-retention/. On the other hand, customer loyalty programs enhance the chances of making more sales through existing customers than new ones. Already, statistics show that a larger part of a company’s income comes from the existing customers rather than the new ones. 

While it is not bad for a company to always look for ways to acquire new customers, more efforts should be channeled in keeping the existing ones. This management can work through a viable business strategy such as customer loyalty programs to build a stable and robust customer base. As a result, the reduced cost with marketing to a new audience results from getting so many positive results from the existing customer base.

Conclusion

Before we call this article a wrap, every big brand must actively create a loyal customer base that continually patronizes them. Besides, they also need to invest their time and efforts in profitable strategies that can further enhance the business reach, stature, and productivity. So, instead of spending a large chunk of your marketing budget on acquiring new customers, a business brand can use some of the strategies above to retain existing customers towards more profit. Simultaneously, the size of the business does not matter in determining the productivity of this business strategy. 

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