Why You Should Launch a Loyalty Program in 2018
Let’s start with something worth remembering: Selling to your existing customers is a lot easier than attracting new ones. In fact, the probability of selling to an existing customer is 60-70%, while the probability of selling to a new prospect is 5-20%. In addition, existing customers are 50% more likely to try new products and spend 31% more compared to new customers. So how do you get your current customers to come back to your business? One strategy is to launch a loyalty program.
It might seem like loyalty programs only suit restaurants and retail stores, but in reality, any business can craft a loyalty program to rewards their best customers and make it worth their while to come back and spend more money. For example, a personal trainer could offer their clients a free session with every 10th class they take. Or maybe they get a free T-shirt if they work out with the personal trainer 5 times in the same week. If you get creative and understand what motivates your customers, you can create a loyalty program for any type of business.
Besides focusing on selling to your existing customers, there are various other reasons why you should launch a loyalty program.
1. Collect valuable data
Data is crucial to growing your business, you need to know who your customers are and how they behave in order to appeal to them. A customer loyalty program will allow you to collect such data. Luckily, 56% of consumers are willing to share data to receive better service. In other words, you will be trading an amazing loyalty program for some data about your customer. This will allow you to put a face and a name to your customer, including when they buy and how much, especially if they are racking up points and redeeming rewards on a regular basis. The gathered data will allow you to create campaigns and products that are targeted at individual customers or groups of customers.
2. Enhance your customer experience
According to Forbes, 79% of customers would take their business to a competitor within a week of experiencing poor customer service. But it’s not just about customer support, it’s also about the way you show your customers that you value them for buying from your store. But how can you increase the likelihood of a good experience with your business? The answer: make customers feel like the money they spent was worth it. A loyalty program provides the perfect vehicle to do this.
It’s all about perceived value. If a customer can get something extra for their money, besides the product they purchased, they will experience the “wow factor”. According to persuasion expert Robert Cialdini, this positive experience also invokes a desire to return the favor, grounded in the power of reciprocity. In other words, “if a customer receives positive treatment – like a loyalty program – they will be more likely to ‘return the favor’ in the form of more visits, …read more
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