3 Reasons Why Your Business Needs A Loyalty Program
1. Loyalty programs create profitability
It’s seldom that you would hear a business executive say, “We have far more profits than we can handle” or “We are doing so well that we don’t need new business”. Quite the contrary in fact, most executives are trying to adopt a consumer-centric approach and use innovation to provide valuable and tailored solutions that impact the bottom line. How do Loyalty Schemes help?
Encourage repeat business:
Keep your customers from defecting. It’s 6 to 7 times more expensive to acquire a new customer than to keep an old one. Current customers also spend 68% more than new customers. Treat your customer like a jealous lover, create long term relationships. Ignore your customers and they will ignore you back!
Influence customer behaviour:
Prompt your customers to (a) Buy more when they buy and (b) Buy more frequently. Especially when these purchases yield greater rewards and a higher CVP (Customer value proposition). Align your CVP to your rewards program objectives. Ultimately aim to achieve a WIN-WIN situation!
Attract new acquisitions:
When customers look for a new business and everything looks the same, for many consumers the existence of great and real value attained through rewards and cash backs on their purchases is what sets the cutter apart. 68% of 20 to 34 year olds are willing to change where they shop for more rewards and points. Stand out in a crowd!
2. Shoppers LOVE customer loyalty programs
There are over 100 loyalty programs operating on a national basis in South Africa alone, with more than 50 million registered users collectively. A typical loyalty business case is built on the assumption that the customer’s behaviour will be positively impacted. According to a recent study, Consumers are 82.4 % more likely to shop at a store that offers a loyalty programe. Give your customers what they want!
3. Big data and customer behaviour
Get to know your customers:
A “one cap fits all” seldom works when applying this approach to a Loyalty Program. Different customers want different things. Ensuring you have the diversity of rewards in your programe to match the needs of multiple customer segments underpins the success of your program. GoRhino has created a closed network of 1000 stores nationally that is able to speak to the specific needs of your customers. If your member feels like it will take them too long to get anything of value, they will disengage from your program. Consistently reframe your existing insights to make sure you have and, more importantly, are acting on the best available data. See what’s right in front of you!
Get your Loyalty Program to do the heavy lifting:
It is all about big data, customer behavioural science and finding ways to stand out from the clutter. Effective loyalty programs ultimately drive profitability and change consumer behaviour simultaneously. For many South African businesses Loyalty programs are no longer part of their marketing budget, they now form part of their operational costs. Data should be used for targeted marketing campaigns and further tailor the benefits to the customers.
Author: Sheri Nair – Director GoRhino Loyalty