A customer loyalty program can facilitate a business to boost their customer loyalty in a structured manner. The structure enables a business to identify bottlenecks and work on those specific aspects. Moreover, it is a tool for any brand to move away from discounting and still stay competitive. The way the process works is quite simple. The first step is to get a customer engaged with your brand. The next step is to incentivize them to make their next purchase. This will lead to more frequent purchases and higher AOV (average order value) per customer. While this benefit is a no-brainer, the strategies to achieve this benefit can get tedious. Additionally, there is a lot of guess work involved. Let us look at how a customer loyalty rewards program can address all these roadblocks.
Customer Engagement
Customers will not purchase from you every day. Depending on the value of the product the frequency of purchases will vary. This hibernation period should be utilized to stay on top of their minds. To achieve this, you need to keep them engaged with your brand. So, the next time the customer is ready to make a purchase, your company should be the go-to brand. A loyalty program software can handle this easily.
Without a customer reward program, the only way to incentivize the next purchase is discounts. This will hurt your margins as well as your end goal of creating true brand loyalty. The best loyalty programs can provide
a 360-degree loyalty engagement engine. Customers can earn loyalty points for a variety of activities including purchases, referrals, reviews, social media sharing, watching a YouTube video, birthdays, and much more. Loyalty points that are earned can be redeemed for various rewards. These rewards and points will ensure the customers stay invested in your brand.
Customer Retention
After customers develops a level of interest, they are bound to make additional purchases. A brand needs to reward such repeat customers. This will reinforce the customer’s loyalty to stay invested in the brand. Such practices can be used to guide customer behavior to establish a habit. In time the AOV (Average Order Value) of such customers increases and it boosts your repeat purchase revenue.
Data Insights
A customer loyalty program gathers immense data about your customers. This helps in segmenting the customers based on their buying behavior. With such data you can target specific user segments to generate additional revenue.
Furthermore, with better consumer insights the communication can be customized and be kept relevant to each customer. These insights can also help you identify people who have not made a purchase in a long time. By awarding them a win-back bonus you can get them to make a purchase again.
But beware! There are some customers who only make purchases when they get an offer. Such deal seekers are not as profitable. It would be wise to not reward such behavior often. You should reward consumer loyalty and not the deal seekers. There is a lot more that loyalty program software can provide with data sciences.
Summary
A customer loyalty program allows brands to differentiate itself from its competitors. Stop competing on price. With a rewards program, retaining customers will be easier. This will result in increased repeat purchase revenue.
With better customer loyalty engagement your brand can build personal relationships with your customer.
Overall, these loyalty practices will create brand advocates. People are 7 times more likely to buy when referred by a friend. So, a customer retention program will also act as a customer acquisition tool.
