5 Reasons Why Customer Loyalty Program Is a Win For Every Business This Year

5 Reasons Why Loyalty Program Is a Win For Your Business This Year

A Loyalty program is a type of marketing strategy which is designed by businesses to enhance and encourage customers to continue their purchases from them by offering some incentives and rewards on each and every purchase they have done. The aim goal is to make strong customer loyalty, increase repeat sales, and make a strong relationship between the user and the business.

 

Loyalty programs can be used by any industry depending upon how they use it. Here are breakdown of how the loyalty program works and its key components that you should know about:-

 

1. Working on Loyalty Programs

Customers can earn rewards and points or incentives every time they make a purchase or perform certain types of actions like referring the link to a friend, writing renews, signing up, or purchasing products or services. For example, a customer can earn 1 point for every spent of 50 Local currency.

Once the customer has enough amount of points numbers, they can redeem their points for rewards like free products, discounts, special offers, cashback, etc. Like 10-20 points might be equal to a free product or cashback etc.

Some loyalty programs have different types of membership levels. They provide their loyal customers with a type of membership like bronze, silver, and gold. customers unlock higher tiers as they spend more, gaining access to more valuable exclusive offers, rewards, or some kind of more benefits.

 

2. Types Of Loyalty Programs

Here are some types of loyalty programs that you should know about:-

- Point-Based Loyalty Program:- This type of loyalty program is helpful for customers to earn points for each purchase, which can be redeemed for free products, access, or discounts later.

- Cashback Programs:- Customers receive a percentage of their total purchase as cashback which they can use for their upcoming or future purchases. We can understand this with a very simple example "Get 5% cashback on every order."

- Tiered Programs:- Customers earn more perks as they move up the loyalty ladder by spending more. Customers who have earned loyalty points many times will get extra benefits for their continuous loyalty. There could be a membership as per their loyalty towards the company.

- Punch Card System: This type of loyalty program is generally used by small businesses. This program rewards customers after a certain number of orders or purchases. You can also see this type of loyalty program in your local small markets, shops, restaurants, etc.

- Paid Memberships or Subscription Programs- This type of loyalty program is very famous among users. Customers pay a fee to join a type of loyalty program and receive some kind of benefits like free shipping, exclusive deals, and discounts extra. Amazon Prime is a very good example of this type of loyalty program.

 

3. Benefits of Loyalty Programs For Businesses

There are a very good number of benefits to a loyalty program. It does not only increase repeat purchases but even helps to improve your business quality, business branding, etc. A few benefits are given below:-

- Increase customer Retention: Loyalty programs generally encourage customers to keep coming back because they want to earn more points or redeem their rewards which is a very good thing.

- Higher Average Order Value: Customers may spend more per order to earn more points which leads to increased sales for every business.

- Branding: A loyalty program is a very great marketing strategy and also helps to increase brand advocacy. Happy and loyal customers are more likely to refer friends and promote the brand on social media. This helps to get new customers and positive word-of-mouth marketing which is very important these days in a competitive market.

- Batter Customer Insights: Loyalty programs help any business to track its customer behavior, spending patterns, preferences, etc. This can be used to create personalized marketing campaigns which is very important these days.

 

5 Reasons Why Loyalty Program Is a Win For Your Business This Year

4. Some examples of Great Loyalty Programs

There are many types of loyalty programs run by different types of businesses few of them are Starbucks Rewards which is one of the most successful loyalty programs. They offer customers stars for every purchase which can be redeemed for free food and drinks. Also, Sephora beauty insider has been running it's loyalty program for years and has had a very successful journey throughout the year. This tiered program has levels like insider, VIB, and Rouge that can help users get samples, discounts, exclusive events access, and exclusive benefits.

Another very famous loyalty program is run by Amazon Prime, Customers can pay an annual fee to become a Prime member of Amazon, gaining access to free shipping, prime videos, exclusive deals, and many more benefits. Apart from the point-based loyalty system, it is a type of loyalty program that is designed to keep the user within the ecosystem of Amazon. This is another very successful example of a Loyalty Program

 

Loyalty program is not bound for B2C, even it is famous for B2b As well, there are so many types of examples across the globe that you can find.

 

5. Steps To Create a Loyalty Program

If you want to invest in the Loyalty program, then it is the best time to do that. You can earn the maximum possible things. Set clear goals like deciding what you want to achieve in terms of a loyalty program. Whether it is increasing sales, higher retention of customers, or increasing your brand advocacy.

Choosing the right type of loyalty program is very important. A point-based system, tiered membership, or a cashback loyalty program, you need to choose the right one for your business which is more suitable depending on your business.

Offering valuable rewards is always the best option for you. You need to understand the marketing trends and user intent. Include discounts, freebies, experiences of exclusive products or services, etc.

Ensure that customers can easily join your loyalty program online or offline in your store. You need to reduce the steps needed to start earning points which is very important.

Always track the progress of your customers. Use software to track customer purchases, behavior, and points which may allow you to create personalized offers.

Running a special loyalty program for festivals is always a plus for you. Make sure that you are promoting your loyalty program. Without promotion, no loyalty program will work beneficially. You need to show the loyalty program offers and it's benefits by push notifications, SMS marketing, email marketing, or direct display ads.

 

Loyalty programs can be a win-win for both the customers and the businesses. Customers get rewarded for their purchases on the other hand businesses enjoy their repeat sales, increased engagement, and customer data. You need to invest in the Loyalty program today if you want to keep your business connected with the marketing trends.

What Is Loyalty Program? How loyalty program Works? Get answer if all your questions here. 5 Reasons why Loyalty program is a win for your business.

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Arvind

Hi, my name is Arvind. I have 5 years of experience in writing content for different types of websites. For more information, please follow me on Instagram.

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