Importance of loyalty programs across industries
The business landscape has undergone many changes since loyalty programs existed. Yet, loyalty and reward schemes have been sustained. The millennial customers and digital transformation have confused many businesses. Traditional brands have taken time to understand the new era. When growth seems seemingly slow, what is the first reaction of a traditional brand? Companies with a short-sight resort to cost-cutting. But agile brands know that any change is inevitable. One way to keep pace with the market changes is to stay connected with the customers. What better way of customer engagement than through loyalty and reward programs?
Is the loyalty and rewards program applicable to my sector?
It is a common misconception that loyalty programs are exclusively meant for the retail and travel sectors. However, any brand looking to expand its market share and thrive amongst competitors needs a loyalty program.
Do you want your customers to give you a referral?
Do you want to increase the lifetime value of your buyers? In other words, are you looking for repeat customers and repeat purchases?
Do you want your customers to try your new products and services?
Irrespective of the sector, if your answer to the above questions is a yes, it's time to rejuvenate your loyalty and rewards program.
Do loyalty programs work?
Everyone loves benefits and perks. Additionally, loyalty programs can give customers a sense of exclusivity. After all, who does not like a VIP status? To put a number to it, here is what research says about loyalty and rewards programs:
A McKinsey survey in 2020 said that customers are 60% more inclined to spend time on a brand that offers paid loyalty and reward benefits
Another research focussed on multi-tiered loyalty programs. As per the report, half of the respondents changed their buyer behavior to reach the next level within the program.
A 5% increase in investment in loyalty programs can increase profits up to 100%.
Customer retention is a sticky issue for nearly 61% of retailers. At the same time, loyalty programs are the preferred choice of customer engagement in almost 64% of retail brands.
What about loyalty programs luring the customer?
We know that loyalty programs work. But loyalty management has come a long way in its application and strategy. Technology can make loyalty programs fun and easy to manage in the digital era.
Social rewards vs. monetary rewards: Every customer has unique needs and guilty pleasures. A holistic loyalty program keeps in mind the customers' unique identity. Some brands feel that offering social rewards is enough to incentive buyers. It is the easy way out. But research has shown that about 37% of customers look for social rewards. About 60% of customers enter a loyalty program for offers and monetary benefits.
Gamification provides satisfaction: Multi-tiered loyalty programs are the trend these days. Customers actively engage with brands across platforms to enter the next level in the loyalty program. After all, people are goal-oriented. Gamification in loyalty programs gives customers a sense of achievement.
All about a sense of personal connection: We live in a connected world. But the digital link does not always translate to personalization. It can add to the sense of feeling mechanical and alienated. Loyalty management programs are a source of maintaining a relationship with the brand for nearly 76% of the customers. People trust a brand with which they have a relationship.
Markets benefit from Loyalty and Reward programs
Did you know that an average customer is exposed to more than 6000 ads daily? In addition, it is estimated that there are 4700 new sellers daily on Amazon. So, brands need to go beyond conventional marketing strategies to attract and retain customers.
Loyalty programs are a source of indirect marketing by building trust: Amidst a sea of options, customers need a brand they can trust. Loyalty management programs work towards building a customer's trust. What better asset can a brand ask for than a trusting and loyal customer? Loyal customers are more likely to reward the brand with referrals and repeat purchases. Did you know that customer reviews are a deciding factor for most new buyers? Loyal customers build your brand's credibility through active engagement and reviews. Also, there is no better advertisement than word of mouth.
Customer data: Marketing segmentation for targeted marketing is the buzzword in the digital age. Loyalty programs offer the technology to collate and analyze customer data. Along with customer retention, loyalty management programs can provide insights into consumer psychology and buyer behavior.
Enhancing customer experience: Customer journey and engagement continues even after the product journey ends. Loyalty programs are the touchpoints that can enhance user experience.
Alternative to steep discounts: Do you want your customers to choose quality over discounts and offers? If yes, then brand loyalty can do the trick for you. The millennial generation is especially likely to select brand loyalty over price drops.
Getting it right with loyalty programs
It is easy to get complacent with loyalty systems and say that the program was a wasted investment. But loyalty programs fail when they are not appropriately managed. The digitally savvy customer of today has certain expectations. Therefore, a loyalty management program should have a digital component and holistic benefits. For example, the loyalty program must have multiple redemption options along with multiple platforms. Also, brands often face the issue of identifying genuine users for rewards.
ACVISS's loyalty management program:
ACVISS' Loyalty and Consumer Engagement Solution ensures that your consumers are connected and loyal to your brand. It includes a multi-tiered loyalty system with complete control ensuring complete transparency, control, and security. Also included is a gratification module with multiple methods to wow your consumers. The solution provides brands with actionable insights through a machine-learning algorithm. It is also available as ACVISS App, Web, White Label App, or SDK on Android and IOS platforms.
So here is a perfect solution for your genuine users!