Whether they’ve purchased from you once, or they’re on their hundredth visit, it’s important to appreciate every customer who engages, visits, or buys from your store. According to Harvard Business Review, acquiring a new customer can be up to 25 times more expensive than keeping old ones. Thus, if you build strong relationships with your previous customers you can reduce costs and make more money. According to Bain & Co., Just increase your retention by 5% then you can increase your profit by as much as 95%. In this article, you’ll learn why you should create a customer loyalty program, loyalty program ideas, best loyalty apps on Shopify and tips for creating a customer rewards program.
What Is A Customer Loyalty Program?
A customer loyalty program rewards customers who are loyal to the brand. A customer can be loyal to your brand by purchasing from your online store, following you on social media or subscribing to your email mailing list. Customer loyalty programs can reward customers by giving a special offer discounts that aren’t offered to the general public. You can also create a points system where customers receive free items, discounts or special offers. The goal or objective of the customer rewards program is to keep customers happy so that you make sure to retain them as customers so that they continue to buy from your store.
Why You Should Create a Customer Loyalty Program
- To increase sales: According to Loyalty 360, on average, brands that track their loyalty programs notice that their customer value is approximately $1803. Notably, there are 75% of brands which see on a return on investment on the customer loyalty programs they create. It’s more more affordable to turn a customer into a loyal customer than to keep finding new customers. There is a way through which you’ll be able to lower your ad spend while increasing your profits by re marketing to customers who are already familiar with your brand.
- Affordable to set up: You don’t need to own a million dollar company to be able to set up a customer loyalty program. When are beginning then you can either create a simple customer rewards program or use a Shopify app to develop a more sophisticated program.
- Build brand loyalty: Creating a customer loyalty program can help your customers build their loyalty to your brand. According to Facebook, millennial and baby boomer are often considered brand loyalists. What’s even more interesting is that millennial are 1.75 times more likely than baby boomer to say that they want to be brand loyalists. If your business targets millennial, present them the right offer in the right way and you could build a relationship with a lifelong customer.
- Lower ad spend: Acquiring a new customer means you are adding cost. According to Leading on the Edge of Chaos, if your brand is retaining 2% of your customers is almost equivalent to decreasing your costs by 10%. You typically have enough data to market customer more affordable if a customer has previously purchased from you. You can re target them with ads, email them special promotions or engage with them on social media.
- Learn more about your customer: Customer loyalty programs can assist you in better understand of how to market to your customers. You can test promotions and special offers on your biggest fans to better market to the casual browser. Do your customers prefer discounts, freebies, or buy one get one free offers? What motivates them to keep buying? Why do they love your brand? What type of products do they really love and need? The moment you understand what makes certain customers loyal to your brand you can use those findings to build brand loyalty with your store browsers.
- Simple to automate with apps: For an entrepreneur shopify has a variety of loyalty apps that create an automated experience for you. You can automate majority of your loyalty program to lower your workload so that there should not be an additional burden while still ensuring your customers have a great experience shopping at your store.
- Improvise retention: Rewards programs can help in boosting customer retention. By providing perks, discounts, and freebies to your one-time customers you can motivate them to regularly buy from your online store, turning them into repeat customers. Since the goal of the loyalty program is to increase customer retention, it’s no surprise that 65% of marketers use them to retain their customers. You’ll help lower your business’ churn rate.
- Boost referrals: According to CrowdTwist, 74.14% of women said they’d recommend a loyalty program which they’re part of to their friends.
I hope from the above blog you have understood that you’ll be able to increase your revenue, lower ad expenses, and build more relationships with a greater pool of customers. You can also hire a development company like BR Softech for Customer Loyalty Program Software.