Studies have shown that over 90% of businesses have a loyalty program. So if you haven’t created one for your business yet, you’re behind the curve. Offering rewards will help you attract and retain new customers. It will also get your customers to spend more and keep your business at the top of their minds. Here’s a more detailed overview of why your business needs a loyalty program in order to grow and thrive.
Loyalty Programs Keep Customers Coming Back
One of the biggest reasons why your business needs a loyalty program is that it helps with customer retention. It’s cheaper to get existing customers to do business with you again than it is to acquire new ones. Experts estimate that it costs five times more to gain a new customer than to nurture an existing relationship.
Studies have shown that shoppers love loyalty programs, so they’re a great way to get customers in the door. Seventy-five percent of consumers favor companies that have loyalty programs. Additionally, nearly 60% of online shoppers say that earning rewards is one of the customer experiences they value the most, ahead of free and easy returns.
Starting a loyalty program will give you a leg up over competitors who don’t offer rewards and make customers more likely to patronize your business.
Rewards Get Customers to Spend More
Loyalty programs will not only get customers to return to your store but also spend more while they’re shopping. Setting up a rewards scheme that offers customers points for every dollar they spend can tempt them to add more items to their cart. Studies have even shown that a loyalty program can increase your average order value by 13.71% or more.
But the incentives have to be valuable enough to entice your customers to buy more and rack up points. Rewards like free products, exclusive discounts, and free shipping usually appeal to shoppers. You can also offer “double points days” when customers can earn more rewards for their money to encourage them to spend more.
Loyalty Cards Keep Your Business Top of Mind
Giving your customers a loyalty or punch card can serve as a physical reminder of your business. Every time your customers open their wallets, they’ll see their cards. This exposes them to your business several times per day and keeps it at the top of their minds. So the next time they want or need the products or services you offer, they’ll be more likely to contact you first.
Referral Programs Provide High-Quality Leads
Many loyalty programs also include a referral scheme that gives customers rewards for recommending your services to their friends and family. If their friend becomes your customer, they’ll both get some kind of discount or bonus. This helps draw new, high-quality leads into your business and doesn’t cost a lot of money.
Over 80% of consumers trust recommendations from friends and family, making it one of the most credible forms of advertising according to Nielsen. Referral programs are not only highly effective but also estimated to be 90% cheaper than other types of marketing. So if you want to spread the word about your company and bring in new business, implementing a referral program is one of the best ways to do it.
Now that you know the importance of loyalty programs, are you going to start offering rewards to your customers? Let us know in the comments section below.