Customer loyalty has become a main focal point in the retail and restaurant industries as of late. Businesses are starting to realize the impact improved client retention can have on bottom-line revenue and are dedicating resources to improve initiatives that entice consumers to become brand loyal. In fact, according to Customer Insights®, 12 to 15 percent of consumers are loyal to a single retailer, but they represent between 55 and 70 percent of sales.
Improving overall loyalty can drastically impact bottom-line revenue, which is why it's important to create a program that rewards clients for their business
Listed below are four tips on how to improve a customer loyalty program:
Make it easy for the consumer:
A customer loyalty program is first and foremost focused on rewarding a customer for his or her business, although that incentive alone may not be enough to entice a client to join. One of the best ways to divert customers from a loyalty program is by making them jump through a number of hoops to sign up. It doesn't matter how much a client loves a particular product or service, if joining the loyalty program is more than a two- to three-step process, the likelihood of them joining quickly decreases quickly. Loyalty programs should be easy to join, user-friendly and simple.
It should provide value:
Discounts are certainly a great way to reward customers for their recurring business. However, retailers and restaurants should ask their clients what they value most in their shopping experiences and cater rewards to meet those needs. For instance, is it actually the discount that matters most? Or would clients rather have rewards that come in the form of upgrades in services or potentially free items once a certain threshold has been hit. Businesses that do their homework can reap the benefits of a value-focused rewards program.
Create different tiers:
Piggybacking off of the last tip, local retailers and restaurants can create a tier-leveled loyalty program that offers different rewards for each rung of the ladder. The trick is to find a balance between attainable and desirable rewards, and then segmenting a loyalty program based on those findings can create a program that incentivizes customers to keep making purchases, HubSpot® said on its company blog. This type of rewards initiative can also help remind how customers stand in the rewards program; even loyal customers can lose track of their standing and forget to redeem rewards.
Communicate with the customer:
Lastly, it's important to keep in touch with the most loyal customers. They are the individuals who drive a majority of a retailer and restaurant's business, so demonstrating their value is important through loyalty programs. One of the biggest problems local businesses have is staying in touch with brand advocates. Customer Insights found 85 percent of loyalty program member respondents haven't heard a single word from the company since the day they signed up. There's no way to create an engaging and useful buying experience if a brand doesn't communicate with its best clients.