Many businesses seek out various ways to ensure their customer retention, engagement and loyalty. The fact of the matter is that existing customers oftentimes tend to spend 67% more than new customers. Not only that, but it’s around 7 times more expensive to acquire a new customer than it is to retain one. For that reason, businesses implement different loyalty programs for their customers, in order to retain them and establish a long-lasting relationship with them.
However, there are many different loyalty programs to choose from and not every one may be the right one for either your business or your customers. Loyalty programs are designed to boost sales and encourage customers to conduct repeat business and more frequent purchases. In order to achieve that, your loyalty program must be designed in a way so that it will be not only appealing to your customers but also valuable. Therefore, here are a few different loyalty programs you can use to retain your customers.
Point-based loyalty program
Loyalty programs that implement point earning systems are the most common types of programs used by various businesses. Their main purpose is to encourage purchases and even inspire customers to buy high-value items. The way they work is that every time a customer makes a purchase at your store, they earn a specific amount of points based on the price of the item they’ve bought.
These points can then be exchanged for a reward, a discount on their next purchase or other benefits. The more points customers manage to accumulate, the more valuable and significant their benefits will be. This program is a good way to ensure customer engagement and loyalty, especially since customers gain value by buying from you. If your business relies on frequent purchases, this loyalty program may be quite suited for it.
Tier-based loyalty program
Tiered loyalty programs are best suited for businesses that rely on long-term customer engagement and high-priced purchases. The way this program works is that the longer your customers remain customers and the more purchases they make, they can advance in tiers that yield better benefits. The higher the tier level, the better the rewards are. This program fosters loyalty and engagement. It also encourages customers to advance in tiers in order to obtain more benefits.
Moreover, this program is one of the best programs that reward loyalty appropriately. As an example, this program can implement tiers 1 to 5, with the first tier being the lowest and fifth being the highest. In tier one, customers have permanent discounts on specific items or services, while in tier five they have better discounts, more options, rewards and so on. If your business is in the service sector, such as travel agencies, insurance companies and so on, this program may be quite beneficial for you.
Gift card-based loyalty program
Gift card loyalty programs are ideally suited for retaining customers and ensuring repeat business from them. Everyone likes getting a gift card they can use to treat themselves with something or buy something as a gift for someone else. The way this program works is that customers receive a gift card for their loyalty. The gift cards can be used to make purchases at a discount price anytime the customer wishes to make a purchase at your store again.
As an example, a survey conducted in Hong Kong showed that 41% of their shoppers would be encouraged to spend more if they were part of a brand’s loyalty program. That being said, a prepaid card in Hong Kong could be a significant gift to inspire customers to make more frequent purchases. Gift cards can be a good way not only to reward customers for their loyalty but also to encourage engagement.
Partnership-based loyalty program
Partnership loyalty programs work best when two brands decide to cooperate and support each other on the market. Due to the markets’ high competitiveness, it’s not uncommon for brands to join forces, in order to deliver a more seamless customer service and experience to their audience. The way this program works is that every time a customer makes purchases at your store, they’re given vouchers, coupons, or discounts at your partner’s store and vice versa.
That way, you’re promoting your partner’s brand, while they do the same for yours. This program is an excellent way for two businesses to aid each other in building publicity and exposure. Not only that, but it’s also a good opportunity to improve customer experience through personalized service. As an example, customers who purchase household appliances from you get discount on your partner’s repair services after the warranty has expired and if they procure your partner’s services, they get a discount on purchasing new household items from you.
Loyalty programs serve the purpose of helping you retain your customers and encouraging them to buy more often from you. However, you must carefully choose which program will suit the needs of your business and your customers, so that you can make sure it yields the best results.
Emma Miller is a Sydney based writer with a degree in marketing. Interested in digital marketing, social media, start-ups and latest trends. She’s a contributor at BizzMark Blog.