It seems like every retail outlet is offering some form of loyalty program. But the question lies, which ones are actually worth applying for and which ones are just a way to capture your information.
When I worked for a regional dollar chain and pharmacy I played a heavy role in our customer loyalty program. I can remember our marketing team creating it for the first time back in 2015 and then reviewing every little aspect of how it would work. I played the role of systems tester and breaker. For more than 3 months we planned, created, tested, and executed a loyalty program that took off.
I look back at my experience there and how what I learned there plays a role in my eCommerce clients role in customer loyalty and the first-party data future. I have outlined the benefits of customer loyalty for both business and customer.
Customer loyalty programs offer a number of benefits for businesses, including:
- Increased customer retention: Customer loyalty programs can help businesses retain their existing customers by offering them rewards and incentives for repeat purchases. This can save businesses money on customer acquisition costs, as it is more expensive to acquire a new customer than it is to retain an existing one.
- Increased customer spending: Customer loyalty programs can also encourage customers to spend more money with the business. For example, a customer may be more likely to purchase a higher-priced item if they know they will earn more rewards.
- Improved customer satisfaction: Customer loyalty programs can help improve customer satisfaction by showing customers that the business appreciates their business. This can lead to repeat purchases and positive word-of-mouth marketing.
- Gathered customer data: Customer loyalty programs can help businesses gather valuable customer data, such as purchase history, preferences, and demographics. This data can be used to improve marketing campaigns, product development, and customer service.
- Increased brand loyalty: Customer loyalty programs can help businesses build brand loyalty by creating a positive association between the customer and the brand. This can lead to repeat purchases and positive word-of-mouth marketing.
Here are some additional benefits of customer loyalty programs:
- Reduced churn rate: Customer loyalty programs can help businesses reduce their churn rate, which is the percentage of customers who stop doing business with the company over a period of time. When customers feel valued and appreciated, they are more likely to continue doing business with the company.
- Increased customer lifetime value: Customer loyalty programs can help businesses increase their customer lifetime value, which is the total amount of money a customer spends with the company over the course of their relationship. When customers are loyal to a brand, they are more likely to make repeat purchases and spend more money with the company over time.
- Improved employee morale: Customer loyalty programs can also help improve employee morale. When employees see that customers are happy and satisfied with the business, it can boost their morale and motivation.
Overall, customer loyalty programs can offer a number of benefits for businesses of all sizes. By rewarding customers for their loyalty, businesses can increase customer retention, spending, satisfaction, and brand loyalty.