Studies have shown that over 90% of businesses have a loyalty program. So you’re behind the curve if you haven’t started one for your business yet. 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 why your business needs a loyalty program to grow and thrive.
Loyalty Programs Keep Customers Coming Back
One of the biggest reasons your business needs a loyalty program is that it helps with customer retention. Getting existing customers to do business with you again is cheaper than acquiring new ones. Experts estimate that gaining a new customer costs five times more than nurturing an existing relationship.
Studies have shown that shoppers love loyalty programs, making them 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 without rewards programs 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 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 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. Your customers will see the card every time they open up their wallets, which will keep your business top of mind. Because of this, your customers will likely think of you the next time they need something.
Referral Programs Provide High-Quality Leads
Many loyalty programs also include a referral scheme that rewards customers for recommending your services to their friends and family. Offering a referral bonus helps draw new, high-quality leads into your business without costing a lot of money.
Over 80% of consumers trust recommendations from friends and family, making it one of the most credible forms of advertising. Referral programs are highly effective and around 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, will you offer rewards to your customers? Let us know in the comments section below.
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.