As they say, repeat business or behavior can be bribed but real loyalty has to be earned. Therefore, making your customers loyal to your brand is the best strategy to grow the business in the long run. There are many tactics to build customer loyalty, but a great loyalty program reward system that is carefully crafted will provide phenomenal returns. The Pareto law states that 20% of the customers bring in 80% of the revenue for a business. Keeping that 20% of customers who remain loyal to you will keep your business thriving. That is why loyalty is an invaluable asset in business that is unparalleled among all other ways to grow the business.
As Bill Gates said, “Your most unhappy customers are the greatest source of your learning.”
Finding out the pain points of unhappy customers can be great fodder to create strong loyalty rewards programs. Loyalty is developed organically when the customers get what they need without any hiccups. But that is not enough in today’s ultra-competitive world. In addition to a seamless experience which is the bare minimum, businesses must lure their customers which keeps them loyal. Your one blunder can be capitalized ruthlessly by your competitors. In order to avoid customer churn, it is necessary to keep your customers always engaged.
Loyalty can be executed in a number of ways. However, the metric to measure the benefits of the reward programs is dependent on the objective of the business. There are far greater benefits of keeping your customers loyal than what just reflects in the balance sheets. Even considering that, the investors can be kept happy with the benefits of rewards programs which directly influence profits.
Major studies have reported that just around 5% retention can increase profits by up to 95%. This statistic has been the fodder for loyalty program implementation. The benefits are not just all about money and profits, but a robust rewards program also resonates with the emotions of the customers.
Other advantages of reward loyalty programs include a way of showing gratitude towards the customers by offering them incentives to stay loyal to the brand. This in turn makes them even more loyal to become repeat customers for a very long time. Loyalty is deep-rooted in psychology and the right emotions must be triggered at the point of decision-making to keep customers choosing you time and again.
A loyalty reward program can be designed in a number of ways. Identifying the target audience and then segmenting them into the desired groups is the right way to move forward. But creating loyalty rewards programs is not a cut-and-paste formula. A well-crafted and meticulously documented rewards loyalty program strategy will enchantingly bring in the desired results.
According to a Forrester report, improvements in customer experience built through loyalty is a reliable parameter to build robust growth. Loyalty can act as a shield when the business reaches the point of diminishing returns. In a post-pandemic world, an augmented loyalty program that covers the basics of advocacy, enrichment, and retention are the key drivers to not only get the business up and running but keep it on the growth trajectory for the foreseeable future.
The best rewards programs are often simplistic and futuristic. They do not complicate things while offering easy understanding for all the stakeholders involved in the business right from the owners to the consumers and everyone in the middle.
Loyalty can be inculcated in the minds of the customer through a systematic process of rewards loyalty programs. When they think of the product, they subconsciously think of the brand because they have emotionally invested in it.
The strategy to build a loyalty reward program differs from industry to industry. However, the basic principle remains the same. Let the customers work towards the goal to achieve loyalty through different tactics such as point accumulation, gamification, and so on.
Retaining customers and getting the best value out of each rewards program is not an easy task. Though it appears very simplistic on the surface, there are deeper implications and processes that need to be studied to tailor a loyalty program that actually works. If a loyalty program is developed without proper research and insights, it can generate very poor returns and make you skeptical of the power of loyalty programs for business growth.
A loyalty partner such as Annex Cloud helps in mitigating all the challenges that come with designing a custom rewards program which will set cash registers ringing, while also building a long-term legacy.
Connect with our loyalty experts to know more!