5 Reasons Why Loyalty Programs Raise Revenue
“Do what you do so well that they will want to see it again and bring their friends.”
— Walt Disney
Let’s kick things off with some fun trivia! Did you know that loyalty programs have been around much longer than most people think?
According to a New York Times article by Nagle (1973), the first modern loyalty program was conceptualized more than two centuries ago, back in 1793! A Sudbury, New Hampshire merchant came up with a brilliant idea—to reward his customers with copper tokens that could be accumulated and used for future purchases.
His idea was effective at generating repeat visits, creating the framework for modern-day loyalty programs that have brought wealth and prosperity to a lot of savvy business owners.
But if you’re still not sold on the idea of loyalty programs, here are five reasons why they should be a mainstay in your marketing game plan moving forward. Let’s dive right into it!
Reason #1: You’ll Retain Your Old Customers and Attract New Ones
Are you interested in reeling your old customers back in, while attracting new ones in the process?
Well, of course you are!
This is the primary reason for you to use loyalty programs. You can reward your regular customers with exclusive offers and personalized treatment, such as coupons and special birthday discounts.
Plus, when you treat your customers well, they might just tell their friends and family about your business. Which brings us to my next point...
Reason #2: You’ll Let Your Customers Speak For You
In addition to creating repeat business, your loyalty programs can compel your customers to do the talking for you!
You can ask your customers to post reviews on third-party platforms. And if your loyalty program has them hooked on whatever you’re selling, they will be more than willing to share their experiences via social media.
That’s free advertising right there. And it will help significantly in your efforts to grow your business!
Reason #3: You’ll Acquire More Data On Your Customers
Whenever a customer joins your loyalty program, you’ll be presented with a unique opportunity to better understand them!
Done right, your loyalty program can be an effective way to gather insightful data on your customers. Your marketing team can then analyze this information and figure out your customers' preferences and buying habits.
And if you think this approach won’t work—think again! Because according to Forrester Research, most Americans will not hesitate to swap personal information if it gets them additional perks and rewards.
You can use your findings to create more personalized offers for your customers. Now you can give them exactly what they want, leading to a significantly improved customer experience!
Reason #4: You’ll Make Your Customers Feel Included
Why do you join certain groups and factions? Because for some reason, it feels nice to be part of something larger than yourself, right?
Your loyalty program can provide your customers with that same experience! A lot of loyalty programs also feature online get-togethers and forums, which can serve as an important source of honest customer feedback.
You’ve just hit two birds with one stone. Because not only have you built a community for your customers—you’ve also discovered another way to improve your services!
Reason #5: You’ll Reduce Your Company’s Expenses
Advertising and marketing can really eat into your financial resources. But you already knew that.
So why not just use a loyalty program? As we mentioned earlier, you will get free referrals and additional social media exposure—two things that can serve as additional advertising and marketing for your business.
So once you see favorable results from your loyalty program, maybe you can restructure your budget and save a few extra dollars?
The Bottom Line
The bottom line is this… loyalty programs are AWESOME. They have so many perks for both the customer and the business owner!
So what are you waiting for? Start your own loyalty program and realize the full potential of your business—like so many others have!
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That’s it for today’s TopVA blog. Watch out because we’ll have another one for you pretty soon!