Did you know that customers believe that loyalty programs strengthen their relationship with brands? Furthermore, 65% of customers claim that they prioritize brands that offer loyalty programs.
What are loyalty programs?
Loyalty programs are those in which companies offer consumers certain incentives such as vouchers or discounts whenever they make a purchase, points, sample items, etc. We’ve gathered some of the best benefits of loyalty programs.
1. Customer Retention
The primary motive behind a loyalty program is to retain customers by rewarding them for their repeat purchase behavior. When you have a loyalty program – you’ll be able to motivate customers to buy again from your brand and establish habits. 75% of customers claim that they always prefer and trust brands that have loyalty programs. Furthermore, 76% of customers believe that loyalty programs strengthen their relationship with brands (Forbes).
2. Increased Word of Mouth Advertising
Word-of-mouth advertising is one of the most cost-effective and efficient forms of advertising out there. When a customer is satisfied with the benefits they receive from a loyalty program – they are more likely to tell their friends about it since 73% of consumers are likely to recommend a brand that has a good loyalty program (Small Biz Genius).
3. Motivate Customer Behaviors
Happy and loyal customers will engage with your brand beyond purchases. If you want more social media buzz, you can offer incentives to loyalty members who post a review or a promotion about your brand’s products or service. Loyalty programs are very powerful since any behavior you want your customers to take – whether it’s sharing a discount code or signing up for a newsletter, can be incentivized with loyalty perks.
4. Build Relationships with Customers
An effective loyalty program will also help your brand in building long-term relationships and genuine connections with your customers. Customers who feel valued will always come back to purchase from your brand. Therefore, a strong connection with your brand will be crucial to ensure that consumers choose your brand over your competitors.
5. Stand Out From the Competition
According to McKinsey and Company, 71% of consumers believe that brands can differentiate themselves from their competitors through their loyalty programs. To be able to create meaningful loyalty programs, you need to get to know your target audience. You must do in-depth research to know what they like, what they need, their behavior and more so you can come up with a way to add more value to their buying journey.
6. Loyalty Programs Help Attract New Customers
Not only does loyalty programs help retain customers, it also helps you generate new leads. Today, customers simply love special offers, freebies, and the sense that they’re building a real connection and relationship with a business. In fact, a recent study from KPMG reveals that 75% of customers would switch brands for a better loyalty program.
7. Loyalty Programs Lead to Customer Loyalty
The main purpose of loyalty programs is to build loyalty and if you have a great one – you’ll surely increase your customer loyalty. If you think of ways how you can personalize your loyalty programs and make them creative, the impact will become even better. At the end of the day, you want your customers to have an emotional connection with you so you can continue to build brand loyalty.
Need help with creating a strategy for your loyalty program? Let us know your ideas and we’ll be glad to help you turn them into reality. Parachute is a digital marketing agency that has 10+ years of experience in helping brands drive both brand awareness and brand growth. Contact us now.
