4 ways Loyalty programs can improve business performance.
Loyalty programs are applied by retailers for many reasons, for instance, customer retention, and increase market share and build a loyal customer base. Whatever the objective is a loyalty program must improve a business’s performance to remain part of a business strategy.
How can you tell if a loyalty program is really impacting business performance? Well, the answer is sitting right in front of you (hint: the data).
Digital Loyalty software allows users to capture a range of data about customer’s behaviours and preferences. Integrated loyalty software can also capture data across multiple customer touchpoints giving users valuable insights into their customers’ journey.
By using the right data analytics and KPI’s(Key performance indicators), brands can better understand customer behaviour, improve customer satisfaction, influence customers’ interactions and drive more profits.
Here are 4 ways loyalty programs can improve overall business performance:
1.Targeted Offers and Promotions.
Loyalty programs give brands the opportunity to test offers and promotions for different types of customers. Use offer redemption reports to identify what offers and promotions work for different customers. This will highlight certain customer behaviour patterns and help brands create effective promotions to truly delight customers and keep them coming back for more.
Anyone in business will agree that acquiring new customers is expensive. Loyalty programs nurture existing customer relationships by helping to maximise returns on marketing efforts with existing customers. According to Bain & Co, if you increase customer retention by even 5%, it can boost your profits by 25 to 95%.
3.Increases sales and frequency visits.
According to Accenture loyal customers spend 67% more than new ones. So nurturing these relationships are important. At Azpiral, our research shows similar findings across multiple clients. Understanding customer’s wants and needs are crucial to influencing sales and repeat purchasing.
4.Attracts new customers
A good loyalty program with an engaged customer base will attract new customers for various reasons such as word of mouth advertising, loyal customers become brand advocates and spread the word on the great experience they have as a customer.
Loyalty program offers and promotions are a great excuse for regular advertising across all channels expanding your reach and attracting new customers. The deeper understanding a brand has of its data the more targeted their rewards, promotions and offers for different target audiences. Brands can use these insights to attract new customers to particular target audiences.