The Value of Customer Loyalty Programs
As a business owner one of the most important things you can remember is the value of customer retention. Establishing credibility and building the relationship to a profitable customer requires constant effort. It actually costs 500% more to acquire new customers than keeping your current customers. One reason is the fact that loyal customers are worth more because they actually spend more later on their latter purchases.
Loyalty programs are a great way to retain customers and build relationships with 87% of shoppers saying they want loyalty programs. Consumers are clearly accustomed to being rewarded for their shopping purchases and it has almost become an expectation. The purchasing power of the millennial is especially very strong with 68% of millennials saying that they wouldn’t be loyal to a brand if it doesn’t have a good loyalty program. The fact is that these loyalty programs are the start to a solid relationship with your customers and continuous growth.
Some of the common programs we think of here in Canada are Air-miles, Shoppers Drug Mart and Petro Points. The questions many ask is, should you start loyalty program if you are a small business and will your reward pay off like the large scale programs? The answer is…yes! Your loyalty program will actually increase your marketing efforts by allowing you to communicate regularly with your current customers who already know you and have built trust with your business. You are then able to reach them at the appropriate times and build the relationship even further.
Any small business can implement a loyalty program as simple as a punch card with a free offer after ten visits for example. If they are going to receive their tenth coffee free from your shop, they are going to choose you over the five other shops on the street guaranteed! It is only costing you one cup of coffee to gain nine others. Another option is to work with other small businesses to cross promote and exchange loyalty rewards. For example, an active wear store may offer a discount or free month membership at the local gym after they have made a certain amount of purchases. These types of programs give you a chance to thank your customers for their loyalty and show them that you care.
If you would like to learn more information about loyalty programs and how to retain and grow your current customer base, please contact us today.