The success stories of famous brands and businesses that have scaled their way to the top-selling products/services in the market will not speak about how it has grown the business. This does not mean that the company has evolved to reach a large population. Instead, the success of such brands would depend on providing high-quality products to the existing customers, thereby having extraordinary retention of customers who don’t shift to other brands. When the focus is on quality rather than quantity, the product is bound to stand tall in the market.
A famous example would be Nestle – Cerelac, cereal for kids, and a breast milk supplement product. Years together, it has maintained its standard in the market by having an almost 97% monopoly and keeping its customer base intact.
What makes this happen?
A simple answer to this question would be customer loyalty. Investing money in customer loyalty programs is as important as investing money in a product for research, development, marketing, and sales. Every business must manage their customers through a Loyalty program management approach, which uses different loyalty programs that help the seller make money, and that’s what we would be looking at in this article.
What is the role of customer loyalty programs in increasing sales?
For any business, a strategic customer loyalty program is always a profitable marketing tactic to implement as it brings repeat customers, further increasing sales and profits. They tend to purchase the product or services more than a single time. Moreover, with the help of positive reviews and word of mouth, customer flow is likely to increase. Loyalty programs have worked as a proven method to make customers stick to your business and come to shop again and again.
Making money for sellers through better customer-oriented loyalty programs
Loyalty program management is plans and programs that use various strategies and tactics for retaining its customers. With the help of these tools, it is easy to identify a potential target audience who are likely to maintain brand loyalty; and provide them with better offers, consumer experiences, and benefits.
In a study conducted by Hubspot research, almost 80% of the customers are influenced by family and friends to recommend products/services, thus proving that word-of-mouth is the most robust marketing tool for any business. Similarly, 94% of the customers are likely to return for a purchase a second time when the customer service is tailored to their individual needs.
In another study conducted by Zinrelo, it was reported that 80% of the company’s future revenue would be generated by 23% of the customers today. A psychological study conducted by Norbert Schwarz says that spending a bare minimum of 10 cents can create a feeling of reciprocation among two people.
On that note, here are some strategies and techniques that could be used for your customer loyalty program.
- More the purchase, more the rewards: Customer loyalty program management has a common strategy in which the benefits are provided based on a customer’s purchase. Purchases for 1999 and get a gift worth 499 free, purchase for 3999 and get a gift for 999 free have come across such offers in outlets where we got for purchases, right?
- Cashback reward points: This is a significant hit in the market as you can see many brands providing a card on the purchase where points will add on with every purchase made with the brand, and these points can be redeemed after a while for any product from the brand. This strategy helps maintain unique customer loyalty as the customers are excited to keep purchasing for accumulating points on the card.
- A one-time fee for access to all benefits: When a customer is asked to pay a one-time nominal fee as membership or registration and then provided with the complete package of using the product up to a period is also a way of maintaining customer loyalty. Popular brands that use these strategies would be Netflix, amazon prime, etc.
- Tie-ups with other businesses: Which customer would not want a shopping experience where everything they would like to purchase is available under the same roof? When partnerships or tie-ups are formed with other businesses in the same category it would prove beneficial as the customer would be able to purchase the required things all together at the same place. It sounds like a real-time-saving factor that any customer would want!
- Referral for a friend: Referring to a friend is an excellent innovation for customer loyalty as it is a strategy of two birds with a single stone. Providing cashback offers and rewards for a referral helps retain an existing customer and get a new customer.
Read more:- Key Features
With the help of customer loyalty program management being implemented successfully, a business could expect customers with whom sales are possible at a substantial rate. They often tend to make regular purchases with the brand, thereby having a constant inflow of income for the business. Investing in this customer loyalty program management for a company may look like a waste of money. But, the truth is that this is a seed sown today that would ripe the best fruits in the long run for the company.