Did you know that as much as 97% of your current customers are likely to cheat on you with another brand? This devastating fact was revealed in 2016 by the global loyalty study which indicated that consumers are now less committed to their preferred retail brands than ever before.
This came as a consequence of a rapidly growing competition pool. With such a wide range of product offers to choose from, customers find it difficult to anchor themselves to one retail brand and are constantly on the lookout for better, yet more affordable solutions.
Does this mean you should ditch the existing and focus solely on continually engaging new customers? Absolutely not.
New customer recruitment costs 5 times more than customer retention. If we add to this equation the fact that a consumer is likely to spend almost 70% more on their 3rd year as your customer than on their 1st year, the math is simple – keeping the old customers pays off way more than engaging new ones.
So, is there anything you can do to prevent your customers from looking into your competitors’ offers? Certainly.
A happy customer is a returning customer, and while there are several proven ways to improve customer experience, one stands out as a secure tactic to keep them coming back for more – a well-established premium loyalty program. In fact, more than 70% of consumers state that they would be encouraged to return to a brand that offers a loyalty program, as well as better rewards.
A loyalty program is designed to retain customers by rewarding them for their repeat purchases. If well-implemented, a loyalty program can help increase overall revenue, because returning members buy more frequently and tend to spend more than a new customer.
Loyalty programs come with several interconnected benefits:
Evidently, a premium loyalty program will aid in decreasing your churn rate and steadily increasing your revenue.
A modern customer is a smart customer. They are well aware of a business’ intentions and expect to get great value in return. Here are a few tips on how to establish a premium loyalty program that will produce the results you want.
There are several different customer loyalty program models to choose from that can later be adjusted to help achieve the goals you set for the program. To collect initial data, you will have to resort to your website, sales information, inventory history, etc. in an attempt to determine what your customers might respond to best.
Introducing solutions like UniCard will improve your data mining efforts. It can be used as a loyalty card that will allow users to pay for different products and services online, over the phone or in-store in 15 different currencies. At the same time, you will be able to track each of these transactions and in time gain valuable insight into purchasing trends that will help you establish or modify the existing customer loyalty program.
Go beyond a simple purchase. Utilize your online presence and reward your customers for different actions they take – for example, liking or sharing an on-going offer, subscribing to your newsletter, for referring you to other prospective buyers, and similar. This will strengthen your word-of-mouth marketing efforts and increase your online presence, aiding you in the expansion of your customer pool.
For your customers, that is. Quite commonly, large retail stores choose to award their customers with significant discounts on some of their high-priced items. This way, you not only keep customers coming back, but you keep them from looking at your competitors’ deals on expensive products.
Furthermore, be sure the value of the points they are collecting is transparent – one of the best tactics includes assigning a monetary value to the points so that a customer can instantly visualize the road to the prize.
Once you collect a sufficient amount of data on your recurring customers, you will hopefully be able to better understand them on a personal level and offer incentives accordingly. This can include anything from free subscriptions on certain products and services, to tickets for different events. Note that some consumers also like to hear that a portion of their spending will go to charity.
Aside from enabling your customers to gain easier access to some of the products from your offer, you can benefit from co-branding. Establishing a partnership with other brands will expose your brand to new customers and boost the value of your existing offer.
UniCard offers an exceptional co-branding opportunity for brands who want to increase their exposure and strengthen their market position. What sets the offer apart is the fact that our co-branded Mastercard reduces unnecessary administrative work, thus lowering the overall costs of the process. Furthermore, it records each transaction, allowing you to mine data and use it to modify your loyalty program if necessary.
For instance, you can create different loyalty program levels and motivate customers to work (that is, shop) towards a higher level. With each milestone, they become a more ‘valuable’ member of the loyalty program, which enables them to receive better rewards in return. A game-like experience of this kind is likely to keep a customer engaged for a longer period since they will see long-term benefits in returning to your store.
By this, we mean staying in touch with your loyalty program members. Establish an email campaign that will remind them of any changes or new opportunities you include. In addition, this email campaign can be used to collect the members’ feedback that will help you tweak the loyalty program and increase its effectiveness.
On the one hand, the loyalty program should be simple to understand, as no customer will waste time trying to figure out a complex system – on the contrary, they will run away from it. On the other, you want it to be fairly easy for consumers to earn the rewards. If reaching a milestone takes too much time or investment on the consumer’s side, they are likely to give up.
If you are aiming to establish a premium loyalty program, you will certainly benefit from all the advantages that come with our UniCard – find out more and try it out!