The main challenge that most small-scale business owners face is how to maintain customer loyalty. Thankfully, the Customer Loyalty Programs has been proven to come in handy for business owners, since it helps to keep customers coming to the business.
Customer loyalty programs are not a new promotion strategy for many people. You may have done it previously, especially if you work in the marketing sector or are an entrepreneur yourself.
From your experience, how has the program helped you? Could you say that it is viable and promising? If you still haven’t experienced the success you envisioned from it, don’t fret. Read on and discover some helpful tips to help you break the challenges in running loyalty programs!
Essential Elements of Loyalty Programs
Companies today often focus too much on offering quality products at affordable prices. Unfortunately, today’s market demands more than that! Brands have to do a lot of work to gain new customers. Therefore, keeping the already existing customers and having brand advocates is vital in keeping business running in the competitive market.
When comparing new and returning customers, research has found that returning ones make up 67% of the brand’s success. As such, the Best Loyalty Rewards Program For Retail Business is a core component of running a successful and sustainable venture.
In the saturated market, businesses must innovate ways of having an effective customer loyalty program that will create a strong bond between them and their customers. Failure to do this could lessen the number of return customers.
Usually, companies will allocate points to customers for each product bought. These points are accumulated over time and redeemed once they reach a certain amount. Customers who have more points are rewarded better compared to those with fewer points.
Depending on the scale and nature of the business solutions, businesses apply unique approaches to customer loyalty programs. Thus, one cannot simply copy what others do and expect a perfectly working loyalty program.
One size does not fit all, so it may take several trials and errors to come up with an ideal customer loyalty program for your business. However, you should never give up because you will find the ideal loyalty program soon!
Redefining Loyalty Programs: The Essential Evolution for Businesses
The current business environment is marked by many disruptive changes. While many see it as a good thing, it slows down the growth of businesses, especially small-scale businesses. Technology inventions and other issues make things hard for small businesses that are not able to keep up with the pace.
The big players in the industry may have the upper hand because they can manage to cut down operational costs and production costs. Unfortunately, this is not usually the case for small-scale ventures, which calls for more hard work and innovation in how they manage their businesses.
To survive, these small-scale businesses must be able to keep returning customers coming back for more. By instilling customer loyalty, they can maintain some of the market shares amidst the high competition. Once they achieve this, loyal customers will keep on buying from them from time to time.
While many business owners know the importance of such loyalty programs, very few know how to implement them. Some are still using outdated programs that were developed many years ago and cannot work for the current business industry. As time goes by, there is a need to devise tactics that match the market competition and customer expectations.
Yes, customer loyalty programs are still powerful tools that determine market share. But, there is a need to adjust these programs for maximum efficiency and benefits. As such, businesses should always be willing to move with the emerging trends and appeal to the customer in the best way possible.
Moreover, creating a successful customer loyalty program is not a walk in the park. It requires proper planning and funding. A recent report revealed that some companies use at least 5% of their income to develop these programs. Therefore, you need to be very intentional about the program that you’ve chosen so that it can target the right customers and also be manageable.
The customer loyalty program also needs to be adaptive to the changing needs and preferences of the customers. For instance, a survey revealed that customers are always attracted to gifts, special privileges, and surprise deals. Companies that do not adopt such strategies are often struggling to make sales because customers view them to be less generous.
Exploring Diverse Customer Loyalty Programs Initiatives for Businesses
Customer loyalty programs are very beneficial to customers since they can buy additional products with the points earned. In addition, they help business owners target their promotional deals depending on the different programs used. Below are the different kinds of customer loyalty programs.
- Point based
While it is the most basic type of customer loyalty program, it performs well when a business uses a point-of-sale system. It is easy to manage and monitor through the system and also efficient for customers since all transactions are recorded in a database.
When shopping, customers provide their phone numbers to the cashiers, who then feed them to computers which outline the number of points earned and available offers that a customer can benefit from.
- Punch card
A punch card is about the size of a business card with several punch holes in it. It is used by small-scale businesses that want to keep their customer loyalty program simple.
Every time the customer shops, a cashier punches the card. Upon accumulation of enough holes, the customer can receive a particular reward. The only setback of using this program is that the customer will have to bring the card along when shopping and the cashier needs to have a punching machine.
- Paid loyalty
Paid loyalty programs are those that require customers to belong to an exclusive club by paying a membership fee to become a member.
Certain perks are tagged along this membership with the most common being discounts. It often works by putting a discount on particular products. However, for customers to get the discounts, they are obliged to pay a certain membership fee. As a result, the owner benefits from the membership fee while the customer buys more goods.
- Email list
This requires a business to incorporate the use of an email marketing platform to send engaging emails to attract people to buy products and get the available offers.
The email sent should be relevant and fresh in connection with the available offers. The emails should be sent regularly and updated depending on any changes to the offer. The best part of these emails is that they enable your business to be on the top of the customer’s mind.
Crafting a Loyalty Program in Five Simple Steps
The best customer loyalty program will depend on your business needs and how you envision growth. Here are steps that you should follow when creating one.
1. Determining Customer Expectations
The easiest way of knowing what your customers expect from you is by conducting a survey. It reveals their likes, dislikes, and preferences and how they view your current customer loyalty program. This will be a great start to know what you should put in place.
2. Understanding Your Objectives
Your customer loyalty program should serve a particular goal. For instance, you can envision having more loyal customers with a particular program. Don’t shy away from starting another program that could serve a different purpose.
3. Establishing a Framework
The structure involves a plan on the eligibility of the customers and the earning potential of the program. Your plan should make the most out of it by enticing customers to first buy to obtain the deal. For instance, if you want to give a discount of 20% on a minimum of $200 spending, you should ensure that you will make money from this deal.
4. Dip Your Toe In Initial Testing
A good paper plan might not work out well in reality. You need to test the program on a small group of customers and observe how it performs. If it does well, launch it to a bigger scale and tweak it for maximum benefits to you. Ensure that you update your staff on any changes made.
5. Execute the Promotion
This part involves launching the program after testing its efficacy. Within a matter of time, a large number of customers will embrace it. Even if they seem to decline it at first, they will eventually see the benefits and move with the tide.
Key Insights
Many people believe that running a successful business through sales is easy. However, in reality, the process is not easy and requires a lot of hard work through surveys, trials, and errors.
Customers’ expectations are diverse, and meeting them requires you to have a broader perspective of how you view the market. Nonetheless having an effective customer loyalty program can give you the needed boost to elevate your sales.
In the above guide, we have taken you through the steps involved in creating one and choosing the best program. Follow it to the core, whenever you need to put in place a Customer Engagement And Loyalty Program
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