What Loyalty Programs Can Do For Your Business

Monday, June 27, 2016, 6:00 AM | Leave Comment

Keeping your customers loyal is very important, especially for startup businesses that don’t have enough funds for expensive marketing campaigns.

In most cases retention practices cost only 10% of the sum companies are usually spending for attracting new customers. This makes perfect sense, but boosting customer loyalty figures is not always easy.

Customer loyalty directly depends on product quality, and it also requires an effective customer retention strategy.

This strategy should contain long list of specific tactics, and loyalty programs are also very important part of it. Colloquy Loyalty Census, for the year 2015, showed that one American family holds memberships of 29 different loyalty programs on average, and they are active in at least 12 of them.

With this in mind, we can see that businesses need to make their loyalty programs more attractive, if they want them to be noticed and acclaimed.

In this article we reviewed some of the best practices concerning loyalty programs and the superb benefits they brought to companies.

  • Reward you customers with money or goods

    This is one of the most common loyalty program schemes used by businesses in all niches. In most cases it requires companies to handle out visa gift cards, which can be used for free purchases in stores, after customers collect certain number of points.

    This system is used by Boloco, popular restaurant chain. With their stylish-looking gift card and previous purchases that amounted to $50, their customers can take one free item, and they can choose anything from the most expensive burrito on the offer, to the extra small soda or smoothie.

    Gift cards gamify shopping and make it more competitive. Customers will always buy more if there is a present waiting them at the end of the line.

  • Give your customers a premium status

    Many different airliners have special clubs for loyal customers.

    Wizz Air has its discount club that offers discounts for all flights, hotel bookings and car rentals, which can be regularly bought online.

    Virgin Air on the other has three different clubs, with each of one coming with unique set of benefits.

    To us and probably to many other Virgin Atlantic travelers, the Gold Club is the most interesting one, because other than offering many different discounts, it also comes with priority boarding and exclusive clubhouse access, which enables travelers to have a free drink or a meal in its stylish restaurants or to have a massage just before the flight, all at the expense of Virgin Atlantic.

    Customers love when companies are offering luxury and non-standard complementary services, especially if it’s is wrapped in premium club membership.

  • Write off additional expenses for the most loyal customers

    Many online retailers have problems with high cart abandonment rates. In most cases, this is caused by high additional costs that are not stated in initial offer, but are charged at the online store’s check-out page.

    Since Amazon is the biggest and the most popular e-commerce website, this phenomenon costs them millions of dollars every month. Their marketing experts came up with Amazon Prime, which guarantees two-day free shipping for customers who purchase this package for $99.

    This way, loyal customers can pile up orders in these two days, which guarantees large number of sold items for Amazon and a large decrease in cart abandonment rates.

  • Create customer’s networks

    Many companies tend to create networks of customers that share the same values and interests. This way, customers can feel the sense of belonging and further promote favorite brand in their own circles.

    In recent years this kind of networking is often done online, like in case of Nike+ Running Club.

    Patagonia went even further, by enabling their customers to resell used Patagonia products on their website. This non-monetary program promotes sustainable living and ecology, which are the things that Patagonia’s customers, who are in most cases avid outdoorsmen, value the most.

The best way to find great ideas for your own loyalty programs is by doing an elaborate research about successful strategies implemented by the biggest companies in your niche.

Copying the best features from several successful corporate loyalty programs and adding them your own touch that makes it suitable for your targeted audience, is a proven practice, that small businesses use for ages.

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