Most business owners know that it is much easier and cheaper to keep a satisfied customer than acquire a new one. And research confirms, with studies showing that it costs five to 10 times more to acquire a new customer than to sell to an existing
And the benefits do not end there. The research also shows that existing customers spend on average 67 percent more new customers.
These statistics highlight the importance of customer loyalty for any business. One of the most popular and effective ways to encourage repeat business is a loyalty program that offers customers something free merchandise coupons for exclusive access to new products or services.
The popularity of loyalty programs
Loyalty programs are not new. But they are increasingly popular.
The Colloquy census customer loyalty in 2015 shows that the average American household belongs to 29 loyalty programs. Yet they actively participate in 12 programs at least once a year.
Obviously, occupational loyalty programs if they are put in place and working in the right direction.
Four types of loyalty programs worth considering
There are many different loyalty programs to consider. Some of the most common include:
1. Points systems
How It Works: Customers earn points by depending on how much they spend with you and later receive special coupons or discounts once they reach the set point levels. (For example, a client can receive two points for every dollar spent and receive a $ 5 coupon for every 100 points they accumulate.)
commonly used by Companies airlines and credit cards
more You avoid having to update your products or services and encourages your best customers the most
Less :. is not instant gratification other programs and may be one of the most complex types of programs to implement and administer. Customers may also need to be reminded of their status points.
2. punch card program
How It Works: Customers receive a punch card; every time they make a number of purchases, they receive a punch that wins a reward. (For example, buy 10 get 11 e product or service for free.)
commonly used by Cafes and gift shops
Benefits :. Easy for customers to understand and simple and inexpensive for you to implement
Less: customers are reminded to wear their cards. In addition, they could perforate the card fraudulently. It is also difficult for you to collect data on what or how much the customer has purchased.
3. Discount program
How It Works: Customers receive a card that entitles them to point sales discounts on all or certain products and / or services.
commonly used by Convenience Stores
More: cheap for you to set up and offers instant gratification for customers.
Less :. He often rewards the casual buyers and can cause customers to think about your regular prices are inflated
4. cash back program
How it works: customers earn money from previous purchases and are able to buy it back (usually in the form of a gift certificate) after a certain period of time.
Commonly used by: retailers like Kohls
More: gives customers a reason to return to your business.
Less: This can be complicated and expensive to administer and often does not appeal to casual customers
Also keep in mind that all loyalty programs must have. monetary incentives. You can also reward customers with invitations to special events, free services and more. Carefully consider what works best for your business, and do not forget to ask your customers what programs they prefer, their answers might surprise you.
Five tips on the loyalty program
once you decide which loyalty program (or programs) is best for your business, you'll want to keep the following things in mind when it comes to setting up your program.
1 . right structure. There is a good balance between offering a reward customers want and that makes sense for your business. Think before you commit to anything-once you do, it will not be good if you change the structure soon after.
2. Consider digital loyalty applications. digital loyalty applications allow you to reward customers without burdening their wallets and allow you to collect data on their visits and purchasing habits. Just a little on the market include Perka, a virtual loyalty card; Spendgo, following and loyalty grants points and Foursquare, a reward program based on the location that allows you to provide offers and rewards and encourages customers to spread the word about your business on social media. Ensure that any data collection customer is fully disclosed and agreed to by the client failure to do so could create legal problems and customer relations.
3 . Spread the word. Customers can not take advantage of your program if you do not tell them about it. So make sure you inform them through your e-newsletter, direct mail pieces, social media pages and in-store signage. also train your employees to promote the program.
4. Keep cool. keep customers engaged by changing things on a regular basis. Some ideas include double points on purchases or referrals for a certain period of time, new incentives and special gifts.
5. Encourage advocacy plus expenses. Social media is one of the best ways to spread the word about your business. And research shows that 74 percent of consumers chose the companies / brands based on other customer service experiences shared online. Encourage positive buzz about your business by plea-fidelity digital social applications rewarding mentioned above can help you do it.
If you already have a good product or service, you probably already have a legion of loyal customers. A loyalty program can be the icing on the cake that helps you keep customers coming back for more.
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