Ever heard of “the customer’s always right?”, now you might wonder why is this line so overused. Well, probably because it’s true.
A business runs mainly through customer spending, therefore the bulk of any business’ goal is to increase its customer base and thus its revenue right? Well, not really.
In any company, a majority of its revenue derives from valued customers rather than new ones. On average, 70% of any company’s revenue results from just 20% of its customer base. On top of this, it costs 3 – 10 times more to acquire a new customer in comparison to keeping a recurring one.
With these facts, wouldn’t it be more strategic to focus on the 20% rather than the 80%, or even better to shift the 80% into the loyal 20%.
If that’s the case, you’re in the right place. A loyalty program is what you need, but not just any loyalty program. A bespoke loyalty program which is catered to all aspects of you company.
Still a bit hesitant? Quite understandable, maybe what’s written below can help change your mind.
1) A good loyalty program gives you a competitive edge
Competition exists in any industry, with it comes tactics to one-up your rivals, and in this day and age with technology advancing in unprecendented speeds it has become increasingly difficult to keep up. With information being accessible as soon as it becomes available nowadays, traditoinal marketing tactics are becoming less and less affective. Copying a price or marketing strategy is pretty easy, all you would have to do is see and repeat, but for loyalty programs? Good luck with that!
A good loyalty program studies your market, observes your customer base, analyzes your financial data and creates a platform which drives sales up and hikes up customer retention through exploiting every nook-and-cranny found here. Through this, it becomes unreplicable and unique, creating a marketing machine which even in this day and age is fresh and exciting.
2) Provides crucial customer data and customer trends
As we said before, “the customer is always right”. However, finding out what “right” is proves to be a bit more difficult than you’d think. Sending out surveys is time consuming and customers are usually reluctant to do so, having focused interviews, although might be very informative, becomes expensive and daunting.
So, how else are you supposed to do it? Well, why not try rewarding them for doing so. Every customer which signs up for your loyalty program would provide you with crucial data, allowing you to create strategic pricing and promoting strategies which would adhere to their every soft spot. Driving sales and revenue through the roof!
However, it doesn’t end here. As time goes on, you can further understand the buying patterns of specific focus groups, the customer satisfaction of each individual customer and the likelihood of their return. Through this, you will be able to further curate the buying experience of every customer to perfection, keeping retention high and loyalty strong!
3) Your customers will turn into free marketing machines
As we said before, the customer information you receive is just as valuable as the customers themselves. Providing your already loyal customers, or the so called “top 20%”, further recognition could turn them into evangelists who not only would exclusively purchase from your brand, but also speak good about it to all their friends and family.
Unsurprisingly, Indonesia’s highest marketing success rate is through word-of-mouth at an 88% conversion rate, therefore having your evangelists spread the good word about your brand would increase your brand awareness to heights it has never seen.
However, this is all a process which begins with understanding your customer and giving them what they need best, and one sure fire way of doing so is through a good loyalty program!
4) Forms to become it’s own brand
The marketing benefits don’t just end there, a loyalty program can create such a buzz that it has the potential of becoming its own brand! Think ‘Airline Miles’ which has created its own cult-like subculture called travel hacking, spawning thousands of different blogs, millions of articles and countless travel hackers.
Now imagine that, but for your own brand! A cult like following who’s eager to rack up enough points to become a “Platinum Member”, creating forums on what’s the best way to go up a tier, eventually word gets out about such craziness and it attracts even more people and even, business’!
5) Helps enhances your brand image
Through word-of-mouth, branding and relentless customer satisfaction, a loyalty program through its nature would enhance any companies brand image in a far more effective manner than any form of CSR because it does so not because it has to, but moreso that it wants to. Any form of CSR carries with it an aroma of bureaucracy, however a loyalty program has it plain-jane that it will award you and create a better shopping experience the further loyal you are!
The simple mindedness of its goal has its responding actions become straight forward. It speaks of honesty and true-heartedness, that it exists to listen to you and cater to you. Thus a sense of true recognition from it which doesn’t exist in any other form of marketing. These other forms, in comparison, in conjunction with its bureaucratic aroma creates a sense of unwillingness amongst its customers as it sees them more as numbers than humans, forming a bridge between them and a great loyalty program which can not be crossed.