Customer retention is becoming increasingly important, as companies need to ensure that they can retain and grow their customer base. To differentiate themselves from the competition, more and more companies are implementing customer loyalty programs. These promise to retain customers, encourage them to buy, and reinforce loyalty to their own company.
If you are also thinking about implementing a customer loyalty program, below you can once again see the top 10 benefits of having a customer loyalty program:
1. satisfied customers increase sales
If your customers are satisfied, you will notice this very quickly through increasing purchase frequency and Increasing turnover.
A suitable customer loyalty program binds your customers, they buy from you more often and gladly again. With attractive offers within the Loyalty Program you will quickly win new customers and significantly increase your sales.
2. clear lead over the competition
Customers are constantly reorienting themselves in the market, looking for the cheapest offer or the most popular product. In order to stand out from the competition, even away from price, incentives must be created that the customer can consciously accept.
With a transparent, well thought out and goal oriented Customer loyalty program you can poach competitors’ customers and at the same time give your customers a reason to keep buying from your company.
3. decreasing price intensity
A satisfied and loyal customer will buy from you, even if prices should ever rise.
Even with new products, such a customer will usually buy from your company, even if there is a cheaper competitor.
With a successful customer loyalty system, you ensure that the customer sees no reason to have to reorient himself on the market.
4. acquiring new customers is more difficult (and expensive) than retaining old ones
Did you know that retaining existing customers is 7-10 times more effective than acquiring new customers?
As described in 3., customers are now less price-oriented and loyalty to the brand and product is becoming increasingly important. The right customer loyalty program will ensure that successful customer retention can take place.
5. customer relations are improved
In any case, a growing company also includes loyal customers. These must be cared for and provided for, and at the same time attention must be paid to their needs.
With a customer loyalty program, you improve the relationship with your customers and thus get to know your consumers better. You gain insight into consumer behavior and can better adapt your products or services.
6. customer information can be collected and used
Customer information is invaluable to your business. Not only can you learn a lot about your customers’ consumption patterns, but you can also engage with them directly and effectively . For example, target group-specific newsletters or consumption-based campaigns can be designed for this purpose.
7. market saturation/ stagnation affect the customer base less
Especially in traditional markets, the acquisition of new customers is secondary in nature. In saturated markets, it is much more important to retain existing customers and constantly offer them new incentives. This ensures that you can earn the same or even increasing profits even on stagnating markets.
8. become targeted
You know about your customers’ behavior using the various mechanics. The task now is to use this information correctly in order to be able to advertise efficiently. This applies to the acquisition of new customers, but is also indispensable for retaining existing customers in your company.
9. recommendation rate from regular customers increases
Equally cheap as successful: the best advertising is word-of-mouth. No customer is better wooed than with an emotional connection. When loyal regular customers recommend your company to others, they receive something in return. A win-win relationship is created and the recruited customers are more willing to stay with your company due to the emotional connection. Read more about referral marketing here.
10. image improvement
There are many benefits to the loyalty program, and one passive factor that runs through every step of the program is improving your company’s image. Not only a generous and well-known customer loyalty program, such as with the help of a sweepstakes, will improve the image. The general interaction with the customer also actively improves the image. The customer realizes that he is being heard and understood and feels closer to the company as a result. The image of your company increases with every satisfied customer.