Want More Loyalty? Reward Your Customers!
Want more customer loyalty? Considering developing a loyalty program if you don’t already have one. Not only do loyalty programs help you hang onto those customers you’ve worked so hard to get, but active participants spend more money with the companies whose loyalty programs they participate in.
Consider the following data:
- Three-quarters of U.S. consumers used at least one loyalty program in 2011, up from 68 percent in 2009. (Colloquy)
- Seventy percent of persons from higher-income households ($125,000 +) are more loyal to companies that offer rewards programs. (Maritz)
- Customer spending is 46% higher with companies that offer reward card programs. (Total Research Corp & Custom Marketing Corp’s Loyalty Monitor Study)
- 60+% of U.S. households said that loyalty card programs were important in their shopping decisions. (AC Neilsen)
Loyalty programs can be personalized based on individual customer buying habits or you can send general alerts, discounts, and other rewards to all of your participating members. Rewards programs can also be implemented using direct mail, email, and mobile so you can match the marketing channel to the preferences of your customers.
While many people associate loyalty programs primarily with coupons and discounts, research has shown that over-emphasis on these incentives can actually decrease engagement. For example, among the affluent, offers that give exclusive access or elite status (such as an opportunity to purchase a bottle of wine their own personal batch or receive advanced notice of rare, special-released bottles) can be more effective.
When developing a loyalty program, think about what really motivates your customers and what is most likely to drive engagement. It may be different for different segments of your audience. Also consider matching marketing channels to customer preferences (direct mail, email, mobile). Like your rewards offers, it might be different for different segments of your audience.
You’ve worked hard to bring in those new customers. Now keep them!