Customer loyalty programs are one of the best ways of achieving customer retention and increasing your customer life time value. While many businesses seem to be laser-focused on attracting new customers to their brand, many of their existing customers end up falling to the wayside and get left behind. This is a risky strategy as you can be sure there are other brands with a similar offering waiting to grab their attention with a rewards program that will honour their brand loyalty.

Whatever the case may be, we wanted to share with you some of the benefits of running a loyalty program and how creating a rewards program of your own will allow you to maximise customer retention.

More than 90% of companies have some sort of loyalty program.

01. Retain the customers you have while attracting new ones

When it comes to keeping the customers you have, a rewards program is a proven and effective way to create loyal brand advocates. One of the first lessons we learn in marketing is that it is more expensive to attract new customers than it is to retain the ones you have.

02. Competitive pricing becomes less of a deciding factor

While it’s essential to have the right price point for your products, when you have a loyalty program that connects on an emotional level with your customers, it plays a smaller part. Once you connect with your customers emotionally, switching brands will take more than just competitive pricing. Moreover, by focusing on emotional relationship building, brands can increase wallet share and turn their best customers into their biggest advocates.

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03. Build relationships with your customers

An effective rewards program helps your brand in building long-term relationships and genuine connections with your customers. It is widely known that customers who feel valued keep coming back to use your service. A strong connection with your brand can be the deciding factor when choosing between your brand and the competitor down the street. If your customers are treated as merely a source of revenue, then they will likely see the relationship with your brand as transactional. Value them and the loyalty will follow.

The longer you retain a customer, the more data you’re able to collect around their purchase history, buying trends, which products sell best, and much more. The more you know about your customers, the more you know how to build the best loyalty program for them.

04. Increase sales

When you take the time to create a loyalty program that’s tailored to your customer’s requirements, you’ll ensure they receive a more personalised and positive experience from your brand. This in turn results in their continued loyalty to your brand over another. Did you know repeat customers also tend to spend more on each transaction? Loyal customers are more likely to have higher order values, repurchase, refer more, and try a new offering.

Moreover, research shows that strong loyalty programs encourage the most effective marketing: word of mouth advertising. 73% of customers are more likely to recommend companies with strong loyalty programs. Upon receiving this great recommendation from someone they trust, the research from IRI shows that 74% of consumers choose a brand based on a strong customer loyalty program or discount program. With that in mind, it makes sense for businesses to leverage every interaction with a customer to drive enrolment.

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These are just some of the top benefits of implementing a loyalty or rewards program for your brand. Benamic can help with all your promotional marketing needs when setting up a loyalty program. Contact our team today.

For more reading, check out our blog post on running a successful gift with purchase campaign.