Loyalty programs have been given new recognition in recent years for several reasons. First, because customer loyalty programs have a variety of benefits for companies, but also because they have become an expected part of the consumer experience.
If you have not yet implemented a loyalty program in your marketing strategy, or are unsure about its efficacy, consider the following eight reasons why a loyalty program may be a worthwhile option for you:
1. It Has Been Proven to Boost Growth
Of course, each type of loyalty program may yield wildly different results, but as a marketer, you should never overlook the fact that loyalty programs have been tested time and time again, and have proven to be successful in numerous industries.
In fact, the “growth hacker” movement, a recent collection of marketing gurus and regular business owners whose sole aim is the growth of the company, began by using loyalty programs as their traditional model to expand a company. These individuals allocated all of their energy towards growing their business, and saw customer loyalty as one of the easiest ways to ensure this outcome.
2. It is the best data collection tool
“Consumers want privacy, businesses want data”
More often than not collecting customer data can come across as a harassment. Endless form filling is enough to put a consumer off a purchase or even worse result in “bad” data (jargon). Data collection has to be either unobtrusive or incentivised.
A loyalty program will allow you to collect it bit-by-bit to build up a fuller picture of your customer gradually and in a non-annoying way as the program often offers instant gratification for enrollment or moment of truth. For example, if you want to collect your customer’s birthday details, let them know the reason you’d like the info is so you can send them a special gift or discount on their birthday
3. Save Money
While creating and implementing a loyalty program is an investment, customer retention strategies are often less expensive than attracting new customers. Acquiring new customers can be 25% more expensive than retaining current customers
Antoine Khadige, PhD is the co-fouder of Looya, a customer value management company providing a rewards platform for intelligent marketing