Did you know that increasing your customer retention rate by 5% can increase your profits by up to 95%? However, far too often, businesses prioritize attracting new customers over caring for existing ones. It’s understandable that you as a retailer you want to expand your clientele. But how do you keep the people who are more likely to buy from you in the future? One solution is to establish a customer Loyalty Program that rewards repeat customers.
A dedicated program that provides customer loyalty benefits is an excellent way to express gratitude. It’s obvious that it’s good for your customers, but what exactly are the benefits of loyalty programs for a retail store like yours? In this article we are going to discuss the five most outstanding benefits of a Loyalty Program for your retail business:
- Boost Profits
One of the primary reasons for developing a loyalty program is to ensure a consistent flow of revenue into your retail store. By consistently providing rewards, coupons, and special deals to loyal customers, they may feel more inclined to shop with your brand. Even if people save money on your products and services, your discounts may persuade them to purchase more than they would otherwise. Simply attracting customers to your store or website can increase your chances of making a sale.
- Increased Customer Retention
Statistics show that 80% of customers are more likely to stick with a brand that offers a loyalty program, and 60% say the ability to earn rewards actually changes their spending behavior. One of the primary benefits of a loyalty program is that it has an immediate and noticeable impact on customer retention. A retained customer is a valuable asset to any brand because they generate more revenue, have a higher likelihood of becoming brand advocates, and represent the brand as a true brand loyalist.
- Customer Trends
When a customer registers for a retail reward points program, their information is stored in the company’s database. Companies may utilize this information for profiling their greatest customers and personalizing their services to certain groups of consumers. Because loyalty program data provide a comprehensive picture of consumer behavior, purchasing patterns, and preferences, it may be used to improve inventory management, pricing, and promotional planning that target specific customer types as well.
- Improved Customer Engagement
Customer engagement is a critical factor that has a direct impact on brand sustainability, particularly in the long run. A brand that does not connect with its target audience has a low recall value and struggles to establish a trustworthy brand image. A loyalty program is an excellent way to increase customer engagement. Customers who are members of a brand’s loyalty or rewards programs are more likely to receive emails or other marketing content from the brand. The program itself ensures complete customer engagement and contributes to the strengthening of the brand’s bond with its customers.
A loyalty program offers a direct and permissive line to customers, making targeted communication much easier and more accepted. Aside from announcing new products/services and promoting sales, communication to loyalty members is often more personal and allows customers to feel an emotional connection to a brand. This is especially true if members feel the brand cares about their specific needs as well as their extended community and environment at large.
In conclusion, reward points have many benefits for retail businesses, so why not try them today?
By Carolyne Rabut
Content Marketing – CompuLynx