Updated: Wednesday, May 3rd 2023, 10:56:51 am
Customer loyalty programs are an important part of customer experience. It is a crucial part of a company’s strategy to keep existing customers happy and interested in the business. Dedicated loyalty programs serve as a driver for loyalty, customer retention, and profits. It incentivizes repeat purchases. Repeat purchases from existing customers yield a greater revenue than from the acquisition of new customers. If you look statistically, a mere 5% increase in customer retention can improve profitability by an incredible 95%. The cost of acquiring new customers is also much higher than keeping your existing shoppers. Thus, loyalty programs reward your existing customers to continue buying from you, thereby improving your profit margins.
Most shoppers prefer buying from brands that offer a strong loyalty program. Nearly 70% of customers admit that they are willing to explore other brands to get the best deals. As such, it is critical that businesses emphasise on creating multi-tiered programs that offer premium benefits and perks that are valuable to customers. Regardless of the company’s size, it is ever more important to keep loyalty and reward programs updated to ensure that their clients will remain loyal to them. 80% of the company’s future revenue is dependent on just 20% of existing customers.
Loyalty programs are effective marketing tools that increase growth, help retain customers, and improve brand reputation. Loyalty programs are crucial for businesses looking to build long-term customers. They’re a great way to drive customer interaction and build a deeper pool of data. As your customer knowledge grows, it’s important to ensure that you are leveraging the right data management tools to provide more relevant deals and offers to your customers.