So, you’re considering implementing a loyalty program in your business – or, maybe you’re looking to improve the one you have, but you’re not sure if it’s worth the hassle. In essence, what you’re asking is ‘How will it benefit me?’. Well, you’re in the right place – let’s take a look at the benefits of a robust loyalty program.
Fostering and maintaining loyalty is incredibly important for customer retention efforts. This is where incentives and customer loyalty programs come into play – after all, consumers are more likely to stay with a company that rewards their loyalty. That said, incentives should not just be a ‘one-size-fits-all’ solution, they need to be tailored to the target audience, audience segments, or even so far as the individual customer at hand.
Just look at Betfair, for example – this online casino platform offers a wide range of promotions to reward its loyal customers, all of which can be found here: https://casino.betfair.com/promotions, allowing customers to choose the promotion that is best suited for them. As this online casino offers a wide range of games, the range of promotions available follows suit, with offers like free spins bonuses, free daily shots at jackpots, daily cash drops, and weekly giveaways. In doing so, this not only makes the existing customer feel valued but also makes the offers more personal.
Other examples of this might be exclusive discount codes for e-commerce and retail stores that are only available to existing and loyal customers, or free delivery for people who have signed up to your mailing list. Incentivizing loyalty with these perks, not only encourages consumers to stay with your brand, but it can also motivate one-time customers to keep coming back for more.
But, customer retention isn’t the only way these incentives can influence consumer behavior – loyalty programs can help to acquire new customers, too. In fact, one survey – which can be found here https://www.statista.com/loyalty-programs-in-the-us – found that 50% of US shoppers are likely to increase their participation in loyalty programs, and are therefore actively looking for new loyalty programs to join. With the right strategy, these customers can be acquired by your brand – if you don’t, then your competitor probably will.
What this also highlights is how loyalty programs can help to differentiate brands from their direct competitors. The same research found that 70% of Americans considered loyalty programs a ‘leading factor’ behind their loyalty to the brands they shop with. But, how can a loyalty program be leveraged in such a way? Well, one way to do so is to offer an incentive for joining, along with further incentives for sticking with the brand. Many entertainment, streaming, and online casino platforms do this, offering a free week or month trial, money off your subscription, or free spins bonuses upon sign up.
In addition to this, you can also take more of a double-sided approach, which combines everything we’ve all covered above, which brings us to our next benefit of loyalty programs…
By a double-sided approach, we mean that you could also offer incentives to your loyal customers to refer their friends to your service. In the past, Virgin Media, for example, has offered money off cable and internet bills for both the referer and the referee once the new subscription has been confirmed. Another brand to leverage this is Dropbox, which once offered extra storage space for free to both the new and existing members.
This double-sided approach encourages loyal customers to become brand ambassadors and seek out new customers for your business. This then boosts what we call ‘word-of-mouth’ marketing, where existing consumers talk about your product or service to their friends, family, peers, colleagues, or even strangers. Interestingly, according to statistics compiled by Semrush – which you can see here: https://www.semrush.com/word-of-mouth-stats – 90% of consumers are more likely to trust a brand that has been recommended by a real person, even if that person is a stranger. And, 88% of consumers consider word-of-mouth recommendations to be the most trustworthy promotional technique.
With this in mind, a robust loyalty program that incentivizes both new and existing customers can essentially boost the value of the customers you have. In other words, not only will they continue to spend their own money with you, but they’ll encourage others to as well, without the need for you to run expensive – and sometimes ineffective – marketing campaigns. Instead, by boosting customer retention and customer acquisition simultaneously, customers engage more and take action, as well as providing a sense of trust and community amongst consumers.