Why Loyalty Programs are Essential for Every Retailer
The idea behind customer loyalty programs is simple: Engage and reward your repeat customers to boost their experience with your brand, and generate more sales. Although the strategy is basic, loyalty programs can produce powerful results. The latest loyalty landscape numbers reveal that a well-executed loyalty program delivers more profitable customer relationships than any other form of marketing, for businesses of every size.
Real Life Examples of Loyalty Program Success
Starbucks pointed to their loyalty program as the key driver in its record 2013 second-quarter fiscal results, which included a 26% rise in profit and an 11% jump in total revenue. Another large retailer, Best Buy, adjusted their loyalty program to compete with large online retailers like Amazon and eBay, a strategy that helped their stock more than double since early last year.
Small and medium-sized businesses also profit from implementing loyalty programs. An independent crafts retailer in Washington state added a customer-loyalty program last year, in hopes of improving customer insight, engagement, and sales. Store employees signed up more than 20,000 loyalty members since the bLoyal loyalty tracking and rewards system was installed. The loyalty program continues to produce great results. bLoyal helps them identify the store’s most valuable shoppers and advise clients of new merchandise, sales events, and free classes.
Julio de Villasante, bLoyal COO, says “We have seen impressive loyalty program results across every size of retailer, from small to enterprise level retailers. Program members often spend between 20% to 50% more per transaction, buy more frequently, and remain loyal customers for a longer period of time, which maximizes customer lifetime value.”
Why loyalty programs make a difference:
They help attract more customers: Loyalty programs influence purchasing behavior. In a recent study, 76% of respondents said they were more likely to shop a retailer that offers a loyalty program. (Nielsen)
Implementing a loyalty solution that allows you to quickly capture customer information can dramatically increase your loyal customer base and empower you to start building loyalty and inspiring repeat buying behaviors.
Engaged customers spend more: Loyalty programs help increase customer engagement and increase the volume and spending of repeat customers, which in turn could boost your business revenue. A recent, joint report by Manta and BIA/Kelsey revealed that repeat customers spend 67% more on a given purchase than a new customer.
A quality loyalty solution can help you to engage customers across sales channels (in-store, eCommerce, mobile, event sales, and more) and reach them using a wide variety of methods, such as in-store promotions, mobile text and push notifications, email marketing, and social media or online campaigns.
Increased customer understanding: Customer data gives businesses a perfect opportunity to reward customers with loyalty programs that pay attention to their specific purchase preferences.
A data-centric loyalty solution collects information from customer interactions across channels automatically and puts the data at your fingertips to help you implement an effective program and optimize it with ease.
Increase Referrals: Rewards program members are 70% more likely to be word-of-mouth champions (actively recommending your product, service, or brand) than non-members. (Colloquy)
In today’s world of digital-savvy consumers, businesses are increasingly concerned about what their customers say about them. Loyalty programs are a great way to increase positive reviews and referrals by converting customers into word of mouth champions.
Beat the competition: It can be challenging to compete against large brands with resources that you can only imagine having. However, a good customer loyalty program is an easy way for small and medium size businesses to show their personal side and be competitive. And in the world of specialty and independent retailers, personalized engagement can make a big difference in the bottom line.
Customer loyalty programs can benefit businesses of all sizes by helping increase sales and develop lasting, profitable relationships with customers. Innovative loyalty technology companies, like bLoyal, make it easier and more affordable than ever to launch a loyalty program that produces results.
For more information about launching an effective and affordable loyalty program for the holiday season, please contact us.