Stand out from the Crowd and Increase Profits with a Smart Loyalty Program
Loyalty programs have been around for a long time, but they’re no longer just punch cards that fill our wallets, instead…
…loyalty programs have gotten smarter, more personalized, and simply better.
Nearly every market is highly saturated, so finding ways to differentiate your company from competitors is imperative. You need to find out what genuinely makes your clientele happy, whether it’s simply financial savings, programs that make them feel exclusive and special, personalized recommendations to make their shopping easier, or likely, a mix of these. This might seem overwhelming, but it can all be achieved with a well thought-out loyalty program.
If you haven’t implemented loyalty programs before, or have gone about them the wrong way, you might feel that they end up costing more money than they are worth. You absolutely do still need to be smart and strike the right balance between rewarding to retain and offering such aggressive discounts that it offsets added spending. However, it is substantially cheaper to keep existing customers than it is to attract new ones, so encouraging loyalty is simply a savvy financial decision.
When you retain customers and make your business a part of their shopping routine and habits to the point of loyalty, you’ll see:
Increased Revenue
Loyal shoppers spend more per sale and stay with you longer.
Increased Positive Reviews
Both by word of mouth and via online reviews, which will also make your business come up sooner in search results and encourage new customer confidence in your services. Loyal customers are significantly more likely to recommend your business to others and, thus, save marketing costs for you.
Increased Understanding of Buying Behavior
Tracking consumer habits through loyalty programs will save you money with more applicable marketing, smarter product choices, and more effective promotions. The more you can track and learn about buying behavior, the more you can curate your product offering and services for your target market.
Though loyalty programs can do wonders for a business, you need to research your customers’ wants and needs before developing one for you company. You could send quarterly gift cards in tiered amounts based on your best customers’ spending, offer exclusive access to a new product line before anyone else, give discounts for writing reviews or referring others, offer free shipping, or give small gifts for birthdays that will bring them back in within a defined period. You can also give back a percentage of dollar spend or create a point system to encourage customers to purchase less popular or more high-dollar products, as well as use a company credit card.
You can store and access their customer information purely by your POS system, or with an additional rewards card or loyalty mobile app. Online options are excellent because they store purchase information, making reordering favorites a breeze for consumers, but also making data tracking and upselling based on purchase history even easier for the business owner. As you gather more information from more customers, you’ll be able to consistently improve your program with increased ease as you learn what incentivizes customers want and what falls flat.
But remember, you need to make it about more than just money (there will always be someone who will eventually undercut you on price), true loyalty needs an emotional connection to stay firm—you just need to figure out what is most important to your target market and act on it.
When you’re ready to put together a loyalty program for your business, contact HBS and we’ll develop the best solution for your business needs.
