Improving your customer relations is one way to help grow your business. And loyalty schemes are one potential way for you to achieve this. This refers to the process of rewarding consistent customers with benefits based on how often they shop with you. It can be normal to have doubts about the effectiveness of these schemes though. Read on to find out the truth about loyalty programs.
Will it help my business grow?
If executed correctly, loyalty programs can help your business grow. Indeed, from loyalty program company, LoyaltyLion highlights the potential benefits. Research shows that a customer who signs up for your loyalty program is 47 per cent more likely to buy from you again. And when 80 per cent of this business will come from just 20 per cent of your customers. On top of this, loyalty programs don’t simply give away valuable products for free. You can tailor the benefits to suit your business. For instance, you could offer loyal customers first priority for new products, or a sneak peek at an upcoming range.
Will my customers be interested?
Another concern you might have is whether your customers will even be interested in a loyalty program. You don’t want to be offering benefits that won’t motivate customers to spend more with you. However, research suggests that loyalty programs do motivate consumers. Indeed, 69 per cent of consumers say their choice of retailer is influenced by whether they can earn loyalty points. Meanwhile, 57 per cent of consumers say they actively join loyalty programs to save money.
Are they too expensive and complex?
There are certainly costs involved in loyalty programs. By offering a financial incentive to your customers, you’ll naturally be losing out on the full profit you could have made. However, by factoring in the boost in sales you receive, loyalty programs shouldn’t be considered expensive. On top of this, loyalty programs don’t have to be complex – you have full autonomy over the scheme. You can start small with a points system and if it’s a success you can try more sophisticated schemes.
How do you measure success?
There are plenty of metrics you can use to analyse the success of loyalty programs. Repeat purchase rates can show you the extent to which customers are shopping with you consistently. Meanwhile, by tracking average order values you can see if your total sales are rising.
Setting up a loyalty program for your business can be successful if you execute it well. If you’re intrigued about running a loyalty scheme you can get in contact with LoyaltyLion’s academy for help and advice when setting your scheme up.
