AdviCoach Franchise Reviews: The Benefits of a Loyalty Program
Rewarding repeat customers with special incentives and sales is not a new strategy, but it is an extremely effective one. Customer loyalty programs are being implemented everywhere these days and for good reason – they work.
Large corporations and small businesses alike have reported seeing a significant uptick in revenue after instituting loyalty programs. Take for example the wildly successful My Starbucks Rewards Card or Amazon’s Prime membership program, both of which have seen a significant increase in membership as well as sales in the past year. Small businesses have been getting in on the fun as well. According to Manta’s and BIA/Kelsey’s joint report on small business trends, 64 percent of small businesses that introduced a customer loyalty program have reported it as being an effective revenue generating strategy. Whether your goal is to increase sales or to offset a seasonal slump, customer loyalty programs are a great way to not only get costumers in the store, but to ensure they keep coming back.
Build and Retain Customer Relationships
Along with increasing sales and giving potential customers an added incentive to try your services, loyalty programs also provide small businesses with a chance to build stronger relationships with their existing customers. By incentivizing repeat business you are slowly building customer loyalty. Once a customer starts redeeming their rewards, their engagement with your brand will begin to increase and so will their interest in your business.
A repeat costumer is more likely to keep coming back, which is great news for your business’s bottom line. Especially because, according to The Chartered Institute of Marketing, on average it costs five times less to keep an old costumer than it does to attract a new one. By having your small-business provide loyalty programs to current customers, you are not only thanking them for their continued business, but are also inspiring them to become advocates for your brand.
No form of marketing will ever be as influential as positive word of mouth. Thus, no sales representative will ever be as effective as a brand advocate. For most people, a recommendation from someone they know is far more credible than any amount of marketing or promotion they are exposed to. According to a study published recently by social media software company Lithium, 50 percent of all purchasing decisions are influenced by word-of-mouth, to add to the fact that 92 percent of consumers trust recommendations made by friends and family more than any other form of advertising. Brand advocates are so important to your business because they go out of their way to seek you out and offer glowing references to their friends and family.
Where to start
Instituting a good customer-loyalty program is a simple and cost effective way for your small businesses to retain its customers. In the modern age of mobile devices, a digital-rewards or loyalty program has become easier to manage than ever before. Easy to install digital-reward applications such as Belly and Perkville, keep track of customer purchases and calculate the points they earn along the way. Gone are the days of card printing and hole-punching and in their place – more manageable, digital alternatives.
High customer retention is the ultimate goal of any business and when you give your customers a reason to keep coming back, you will not only see a more consistent increase in revenue but a more enthusiastic overall cliental as well.