(spoiler alert: YES!)
You made it: You acquired new clients! They are writing great reviews on social networks, on Google My Business and even recommend you to their friends. These reviews and your smart advertising strategy are attracting more and more new clients. GREAT!
Now is time for you to think about keeping your clients: They are precious! A great way to achieve this is by creating a loyalty program. Think about the coffee joint downstairs from your office… How much do you like getting that 7th coffee for free?! I love it! I love it so much that I even buy most of my lunches there now. I am one of the 57% of consumers who spend more on brands they are loyal to.
In this article, we will cover reasons why you should implement a loyalty program, which type to choose and how to build it.
Why is a Loyalty Program so Important?
There are many reasons why you should consider creating a loyalty program. Here are four of them:
- Your existing clients might be responsible for most of your future revenue.
Research indicates 20% of your existing clients are likely to generate 80% of your future revenue. Keep them close to you!
- Your clients tend to come back to you instead of choosing a competitor.
All things being equal (distance, prices, product/service, promos), clients will decide to go back where they will be rewarded. Why do you choose to go to Woollies instead of Coles for example? Everyday Rewards instead of Flybuys?
- The longer customers stay, the more they spend.
The average customer spends 67% more in their third year than their first year with a business.
- It is less expensive than always trying to get new clients.
According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%.
Different Types of Loyalty Programs
Now that you want to launch a loyalty program, you need to decide which one is the right one for your business. Here are some ideas for you:
- Freebie
Oh, that 7th coffee keeps me coming back for more! Think about how you can apply this strategy in your own business. It is a great way to start a loyalty program in a simple way. Little tip: Kickstart the fidelity card with double merit for the first purchase.
- Gamified
Who doesn’t love a good wheel of fortune or a nice raffle? 53% of consumers say they are interested in using gamified loyalty programs. It’s fun and always a good conversation to have with your clients! If you are vet for example, you could have a wheel of fortune and get your customers to spin it and win a voucher for food that you sell, or a credit for their next consultation.
- Eco Friendly
Green is the new black. It’s trendy and it’s great! Qantas was an early adopter of this trend, offering customers the option to carbon offset their flight which has proved popular with environmentally conscious customers. Consumers like companies for their values: Show yours to them and they will keep coming back.
- Co-Branded
What about creating a network of local businesses around you? Think about the shops, restaurants, tradies that are in the same small radius, and create a local program giving points or benefits to people using their services. For example: Someone who gets their hair done at this barber, gets 10% off at the coffee shop next to it. That way, you create a loyal community around you.
How to Build a Customer Loyalty Program
Our advice: Start simple!
- Choose the end goal of your program: What do you mainly want out of it: Keep, cross or up-sell your clients?
- Choose the right offer: What can you offer to your clients? Think about what you would be interested in if you were in their shoes.
- Make it easy: Don’t start building a complicated program if you won’t be able to deliver. There is nothing worse than promising something to your clients and not fulfilling.
- Spread the word: Write about your program and send it to all your clients and prospects.
Creating a loyalty program is often the last thing that comes to mind when thinking about customer experience. However, they are necessary to build and improve relationships with your clients, especially right now. Loyalty programs are not only for big corporations and can be implemented across all industries. Don’t hesitate to reach out to your LocaliQ contact and brainstorm ideas with us: we love it!
