Customer Retention Starts With a Successful Loyalty Program
Customer Retention Starts With a Successful Loyalty Program - GSP
Sure, every retailer’s goal is to drive additional traffic to their stores. However, did you know it can cost five times more to attract a new customer, than it does to retain an existing one? Why not switch your focus by developing or enhancing a customer retention or loyalty program? Increasing customer retention by 5% can increase profits by 25 to 95%.
The always evolving retail landscape has become more competitive than ever before making it challenging to attract and retain customers. Between ecommerce, online-only retailer, pop-up retailers, free delivery, click & collect or BOPIS, local independent or unique shops, along with an abundance of other retail options, today’s shoppers have higher expectations. However, winning these finicky customers over doesn’t have to be a daunting task.
Invest in Customer Loyalty
If looking to save money on customer acquisition or seeking new customers and looking to drive additional traffic, why not focus on loyalty? According to Forbes, “Since 65% of a company’s business comes from existing customers, it’s key to focus on the customers who already spend their time and money with your business, and offer them perks. The investment will pay for itself.”
84% of consumers say they prefer a business that offers a loyalty program. Customer loyalty is one of the most important drivers of profitability and growth. These customers are your store’s top evangelists. A worthwhile loyalty program can help you retain these recurring revenue-generating customers.
Rawpixel.com/Shutterstock.comHow to Build a Successful Loyalty Program
Building or enhancing your customer loyalty or rewards program doesn’t have to be complicated. Here are three quick tips.
- Personalize Rewards
- Create Obtainable Rewards
- Educate Your Employees & Customers
79% of customers are very satisfied with highly personalized loyalty programs. Target’s data-driven program, Target Circle for example, offers birthday rewards and discounts on categories customers shop most often. Target is so good at getting to know its customers, the retailer made headlines for breaking the news to a teenage girl’s father about her pregnancy in the form of coupons.
Back in April of 2019, Starbucks updated its rewards program to offer more “reachable” rewards. With two stars representing each dollar spent, today’s customers no longer need to hit 150 stars to receive a free treat or coffee. If they reach 25 stars, they can enjoy a free espresso shot, dairy substitute or additional flavor while 50 stars earns them a brewed hot coffee, hot tea or bakery item. The revamped loyalty program worked! The number of rewards members increased 14% within the first quarter.
A loyalty program is worthless if employees and customers are unaware of how to sign up or how to use it. Take the time to train your employees to promote as well as fully understand how your loyalty program works. Develop engaging and easy-to-follow in-store marketing materials to help customers know what steps they need to take to register and receive rewards.
Looking for additional ways to promote or educate your customers and employees about your loyalty app or rewards program? Reach out to us today. We’re here to help.