Do loyalty programs work?
Posted: Dec 22, 2019
Do loyalty programs work?
Customer loyalty means important things for your business - quite simple.
What is a loyalty program definition?
Loyalty Solutions is a Loyalty Program Software which acts as a tool that helps you track your customer behavior and send them notifications as incentives to have them keep coming back.
Research shows that acquiring new customers costs up to five times more than retaining existing customers, and loyal customers will spend 67 percent more than new customers to continue supporting their brand over time.
Raises an important question: how do you get your customers back again and again? This is not what just happened. One of the most effective ways to promote this dedication is through customer loyalty programs.
Is the customer loyalty program right for your business?
For most retailers, the loyalty program inspires the vision of punch cards in sandwich shops or smoothie stalls, rather than stores selling big tickets. Expensive shopping (such as sofas) is not something that customers buy regularly.
However, even if purchases are rare, customer loyalty programs are beneficial. If customers are ready to buy again, you want them back to you.
Earning frequent flyer miles is a good example. Even if someone flies only once or twice a year, knowing that they enter miles with an airline will inevitably affect the purchase of their tickets.
What business benefits do you receive from your loyalty program?
Loyalty programs have shown to encourage customers to return to the same retailer when they need a repurchase, either next month or next year. In fact, 77% of consumers think loyalty programs make them more likely to remain in the brand.
Loyalty program brings dividends to your business, from the point of view of customer value and lifetime benefits. Members of the customer loyalty program are reported to spend 18 per cent more than other purchasers and an increase in customer retention by only 5 per cent increases profits by 25 per cent to 95 per cent.
The benefits are obvious. But how do you start loyalty programs for your customers? Follow these eight steps before starting a loyalty program
- Set your goals
- Think carefully about your time
- Understand your limitations
- Determine your eligibility criteria
- Choose your reward
- Customize your promotions
- Get access to your loyalty program
- Choose a model for your program
How do I set up a loyalty rewards program?
Once you've determined how buyers qualify to be part of your plan, you'll need to figure out how they'll do the most important thing: earn rewards. Here are some of the most common ways to create incentives for your customer loyalty program.
Based on frequency: Customers get reward when they make a certain number of purchases over a certain period of time.
Expansion-based: Customers earn rewards when they spend a certain amount in dollars.
Buy-Based Products: Customers are rewarded for the purchase of specific products or product categories. Instead of common previous models, retailers can also provide customers with positive feedback or references to other buyers points and rewards. Way fair awards reward dollars in exchange for such customer activities.
In addition to finding out what actions trigger rewards, you need to build a system to track them. The two most common are:
- Points system: Customers receive points for every dollar spent, purchase completed, etc.
- Hierarchy: Customers earn rewards by reaching different ratings, unlocking different rewards and incentives.
Whatever system you choose, how customers will receive rewards and how they become (for example, a reward point equals one dollar) should be obvious and easy to understand. Again, review your goals to determine what makes the most sense for your business. For example, if your goal is to increase the number of orders in a month, then frequency-based programs make more sense.
Higher retention, customer loyalty programs offer many advantages to retailers, even those who mainly sell higher-priced products. Building one requires some initial work, but does not require overwhelming or complex. Follow these eight steps and create a program that will attract your customers and retrieve them more.
Who has the best loyalty program?
Nukta Loyalty Point Platform offers a complete solution, on Android and web versions. The software allows you to reward the most loyal customers, track their visits, spend money and other valuable data. Nukta loyalty program is a best solution for your business like restaurant, beauty stores, spa etc. The platform can also detect fraud and gain information about marketing success. Business owners from anywhere in the world can join in monthly or annual packages and run their loyalty programs.
Nukta loyalty program is offering a 30-day free trial account. Packages are available in light, plus star and personalized value packages with large discounts on annual payments. Nukta loyalty solutions gives you the tools you need to run a simple points based loyalty rewards program.
Log on to www.nuktaloyalty.com to check out the different options and ask for a demo.
Nukta Loyalty is a reward program which benefits its customers and the partners