Create a Customer Loyalty Plan That Benefits Your Business and Customers
Loyalty has been a popular buzzword in the marketing universe over the past few years. Brands like JC Penney, Panera, and Pottery Barn all have extensive rewards programs meant to keep customers coming back. But, what about companies that don’t operate nationwide?
What about brands that only have a few locations or small businesses that only have one store? Can they afford to develop and launch a loyalty program -- and even if they did, could they see any significant benefits from it? These are all questions that small businesses ask when they talk about loyalty. The desire to develop a customer loyalty plan is there, but the resources and proven return on investment (ROI) isn’t.
Fortunately, for small business owners and marketers, you can create a loyalty program that grows your customer base and revenue.
Here are just a few ways a customer loyalty plan can benefit any company and produce concrete results.
Help Customers Save While Improving Your Bottom Line
When you set up a customer loyalty program, don't focus on the expense of implementing and managing a program; focus on maximizing your ROI and increasing customer engagement.
Consider a few of these loyalty statistics that highlight just how much of an impact a loyalty program can have on your brand:
- Increasing customer retention by just 5% can boost profits by 25-95%.
- Customers who are members of loyalty programs spend 12-18% more than non-members.
- Highly-engaged customers are 5x more likely to only buy that same brand in the future.
Even if you wanted to create a conservative forecast for how a loyalty program could impact your business, you could estimate the number of sign-ups per year and then increase the average annual spend per customer by 12%.
For example, a company with 1,000 loyalty members that spend an average $75 annually would expect to make around $10,000 more by developing a loyalty program. That simple formula doesn’t even factor in additional revenue sources like increased business through customer retention and market share taken from competitors.
There are concrete ways to prove the incremental value of your loyalty plan to your company based on your own data management and analytics. These numbers alone should speak for themselves on the importance of investing in customer loyalty.
Reduce Your Advertising Costs With Remarketing
Along with highlighting the direct impact loyalty can have on your revenue, these programs can also reduce your marketing expenses and make your whole department more efficient.
Typically, the most expensive part of your marketing strategy is attracting new customers and bringing people into the sales funnel.
Even bringing repeat customers into the sales funnel can be a slow and expensive process.
Loyalty programs help brands remarket to existing customers. They can follow what customers are interested in and sell to them in targeted ways. This brings buyers back instead of giving up after they bounce.
By skipping the top (and typically most expensive) part of the funnel, marketers can concentrate their budgets on converting customers. These remarketing efforts increase the efficiency as sales numbers grow, allowing you to reinvest your marketing budget into other productive channels.
Serve Customers with Better Products and Options
Along with the physical, tangible benefits of creating a loyalty plan for your customers, there are also soft improvements this program can have on your business. For example, your customer service team can have an easier time helping people if they’re registered through the loyalty program.
Your representatives could use information in your system to quickly confirm shipping addresses or credit cards, making the call shorter and easier for the customer.
Additionally, Your team could recommend solutions based on past buyer behavior, including products they might be interested in.
Consider the fact that 77% of shoppers say valuing their time is the best thing a company can do while providing customer service. Loyalty programs save customer time and provide better solutions, reducing their required effort. Furthermore, by coming up with better solutions, companies can replace items instead of simply returning them, reducing lost revenue.
At the end of the day, loyalty programs help you achieve your sales goals while making members happier about calling your customer care team. MyArea Network technology solutions can set up business dashboards that can track and manage this type of customer data.
Use Your Loyalty Program to Gather Customer Information
There are multiple data points that you can collect from customers with a customer loyalty plan. This information highlights customer interests, demographics, and buyer behavior that you can use to make informed decisions about your marketing efforts.
A few common business data points that you should consider collecting from customers through your loyalty plan include:
- Updated contact information for email marketing and direct mail campaigns.
- How they found your business and if they recommended your brand to others.
- Interests and demographics based on buyer behavior for better remarketing.
- How much customers spend on average and how often they buy from you.
This data can be used to create detailed audience personas for your brand vision. You can use concrete evidence to learn customer behavior instead of setting lofty target goals and estimated plans.
Your Customer Loyalty Plan Doesn’t Have to Be Complex
You can have a major impact on your business even if you only have a few dozen customers signed up for your loyalty program. Most programs start out small and can easily scale up based on your needs.
A few elements you might have in your loyalty program include redeemable points for purchases, exclusive discounts for loyalty members, and events that members get first access to. Consider finding a few loyalty programs that you admire from major brands and using them as models for developing yours on a smaller, local scale.
You can also test your loyalty program with a soft rollout and give yourself time to iron out the kinks, then launch it to all of your customers.
If you still have questions about the benefits of a customer loyalty program or want a partner to help you launch it, contact MyArea Network today and request a consultation. We can brainstorm ideas for your loyalty program and discuss any concerns you might have.