Customer loyalty is a customer's willingness to buy from or work with a brand again and again. It's the result of a positive customer experience, client satisfaction, and the value of the products or services the customer gets from the transaction.A loyalty program is a marketing system implemented by a business that rewards purchasing behaviour, thus increasing the customer’s urge to stay loyal to the company.
However, it’s important to remember that loyalty isn’t something that can be bought. It’s an emotion felt by your customer which is what drives them to become repeat clients. More importantly, existing customers spend 67% more than new customers.
Brands want to provide great customer service so customers will continue subscribing or purchasing. But, customer loyalty is paramount to brands' success -- because loyal customers can grow business faster than sales and marketing.
It’s that simple. Customer loyalty pays off, and customer loyalty programs pay for themselves. Consider the following 6 reasons why a customer loyalty program might be a worthwhile option.
- Proven to boost growth - As a marketer, you shouldn’t overlook the fact that loyalty programs have been tested time and again and continue to be proven successful. Customer loyalty turned out to be one of the easiest ways to ensure growth.
- Boost your company’s reputation - By instituting a loyalty program, you not only improve customer appreciation, but you also increase the chances that existing clients will share their positive experience with others. This carries on in a word-of-mouth cyclical nature that continues to produce growth for your business.
- Provides vital market research - By offering a loyalty rewards program, you are conducting a form of research that will provide you with information about your customers. Through this process, you will begin to see the sort of incentives that fuel the desire of your clients, as well as the rewards that do not.
- It creates a point of difference against competitors - Most goods, especially in retail, can be matched these days. Price, service and location are just some of the factors that can cause a consumer to purchase from one store over another. However, it is hard to match an excellent customer loyalty program. You want your customer to feel as though they will miss out on the benefits of your program if they purchase from someone else.
- They make your customer feel special - Loyalty programs make your customers feel recognized, which further fuels their admiration and strengthens their relationship with your brand. You are sending a message to your client base that you are interested in building a relationship with customers, not only making money off of purchases.
- Encourages referrals - As stated above in the second point, when customers are loving your customer loyalty program, they are going to tell their friends and family (which we all know is the best and most trusted form of advertising, and doesn’t cost a thing!).
It is imperative to point out that customer loyalty doesn’t grow overnight. It takes time and effort to build. Businesses simply cannot bribe clients into being loyal to its brand.
So what makes your business stand apart? That’s an important question every business needs to often address. Check out your competitor. What makes them stand out? Ask yourself as a customer, “what keeps you coming back to a particular brand”? Try and see your business through the perspective of a customer.
Customer service is the best approach to repeat clients. Whether face to face or online, your connection with your customer is key. It starts with creating strong customer relationships in the first interaction.
Customer loyalty programs shouldn’t be relied on as the only way to obtain your customers' loyalty, however they can certainly increase it.