How customer loyalty can increase your bottom-line
The growth in group buying sites, coupled with the increased emphasis on a cheap deal, is making it increasingly difficult for businesses to engender loyalty.
Loyalty experts agree that engendering loyalty is the Holy Grail for business. But, loyalty can be a complex beast to unravel.
It’s not uncommon for wealthy consumers to buy cheap household items in bulk at discount retail outlets, but then stock up on expensive items at the weekend farmer’s market, according to Directivity and Citrus, who generated a report for AMI.
However, implementing a carefully constructed loyalty program is well worth the pursuit given it’s around five times more expensive to find a new customer than it is to keep a current one – a well-known statistic that should give businesses the impetus to seek help from an expert.
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You need a loyalty program in your business because 80% of customers buy more from companies that have a program they are a member of, according to Directivity and Citrus, who generated a report for AMI.
This gives a true indication of the significant improvements a loyalty program can make to your bottom line, no matter whether your business is small, medium or large.
Define what loyalty means for your business
Start by considering what loyalty means in your business. It can be defined as customers spending more money in your business. Or, you might define loyalty as wanting customers to spend more frequently with your business.
Or, perhaps it means you want your customers to refer your business to others. Either way, a carefully constructed loyalty program can achieve all of the above.
Loyalty program experts and loyalty managers say that loyalty is rewarded when the shopping experience is truly unique for the consumer. Meanwhile, customer service, of course, plays a part, with businesses that consistently offering exemplary service often finding it easier to engender loyalty.
Get to know your customer
Businesses that take the trouble to get to know their customer and undertake micro-marketing to specific groups of customers have far more success than those who don’t.
But bear in mind that as brands proliferate in each category, modern-day customers won’t to put up with anything that a loyalty program that isn’t authentic.
Measure and monitor
Businesses need to keep in mind that loyalty programs don’t run themselves. They need to be constantly reviewed and refreshed. Measuring and monitoring what is working is also critical.
Once you’ve got one in place, they can be difficult to remove from your business strategy, this means you need to be in it for the long haul!
Meanwhile, businesses with an existing loyalty program in place should consider refreshing their loyalty program to ensure they’re getting the most out of it.
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