Implementing a customer loyalty scheme in your company can prove effective in boosting customer retention and profitability. It’s well understood that attracting new customers is more costly and time consuming than retaining your existing base of regular customers, but the marketplace has never been more competitive and customers can switch providers very easily.
Competitors always have something new to offer in a bid to entice your customers to buy from them, so offering something extra to motivate your customers and show them how much you value their business is vital. Customer loyalty schemes have shown to be an effective way of boosting retention levels and increasing customer satisfaction, so let’s take a closer look at how they operate.
Types of Loyalty Schemes
Customer loyalty schemes can be designed to fit around your business and what’s important to your customers, so programmes are very flexible. Loyalty Pro rewards card systems , which allow customers to collect points when they make purchases and then redeem these points for goods, vouchers or cash have proved popular, as have rebate schemes and partnering with other companies to offer your customers the opportunity of accessing other goods and services at discounted prices.
Benefits of Using Loyalty Schemes
Implementing a customer loyalty scheme allows you to focus on your regular customers and reward them for their business. When customers feel valued they tend to be more loyal and can even become ambassadors for your brand by sharing how pleased they are with the rewards on offer. An endorsement by a satisfied customer is a valuable way of attracting new business and is often more trusted by consumers than a flashy marketing campaign.
Additionally, research shows that offering a loyalty scheme often results in consumers being willing to spend more in order to boost their loyalty points, which directly improves your bottom line.
Loyalty schemes are also a useful way to get to know your customers better and track their behaviour by collecting data on spending trends. This data can be used to motivate your best customers more and even dissuade customers who are not profitable, such as those who only buy discounted goods, which generate little or no profit.
They are also a useful tool for enticing old customers who are familiar with your products and services but started using a competitor business. It’s easier to attract old customers who have some experience of your business than new customers who have never shopped with you, so making past customers aware of your new loyalty scheme could be all that’s needed for them to switch supplier once again.
Developing Your Loyalty Scheme
Your two main considerations when developing a loyalty scheme should be your customer base and profit. Ensure your scheme offers something that your own unique customer base would want and that’s in line with their values. The scheme should be simple for customers to understand and use without them having to jump through hoops in order to qualify for a small discount.
Ensure your scheme allows you to recover the cost in a reasonable timeframe and concentrate on devising a scheme that focuses on getting customers to behave in the way you want them to, such as spending a bit more or block booking services.
Ryan Writes about Health, Environment, Home Decor, Kids, Laws in Blogger Dojo.