Loyal consumers are responsible for more than 80% of a business’s revenue. It is easier to retain loyal customers than to persuade new ones to buy. They generate significant gains for your company in terms of recurring revenue, thereby improving returns on your sales budget and marketing. To focus on growing your business while reducing your spending, follow the following steps to create a customer loyalty program that works.
Perform market research
Before you establish a customer loyalty program, the first thing is to perform research. Research enables you to identify issues like:
- What your clients want in terms of products/services
- Their motivation
- The product categories or brands such they love
- The amount they are willing to spend on your products/services.
- Appealing rewards and incentives to attach to products to increase their sales.
Segment customers
Loyalty programs are beneficial to the business in that they separate profitable from unprofitable consumers. Consider segmenting your customers to establish those who buy when products have a discount, those who generate little to no benefits to the business, and those that bring a lot of recurring revenue. This way, you will make appropriate loyalty programs that target profitable customers.
Establish a plan
When you fully understand your audience, it’s time to develop a strategic plan for your loyalty program. Part of these involves coming up with measurable, specific goals, and KPIs (key performance indicators). Afterward, decide on the kind of rewards and consumer loyalty model that will give them the most value and motivate them. A plan that adds value to your consumers transforms them into assets for your company.
Build your customer loyalty program
After establishing a strategic plan, use all the information you have acquired to create a step-by-step procedure that consumers will use to earn their rewards. Build your program by giving them points value, and determine how many your customers need to receive particular rewards. Some of the customer loyalty programs you can create are:
- Points program: Customers get points depending on the purchases they make. The more purchases, the more points they receive.
- Tiered program: Once customers upgrade to another level, they receive exclusive benefits.
- Spend-based program: Its basis is the consumer expenditure where they get loyalty credits for the amount spent on products/services.
- Non-monetary program: It aligns with consumers’ deeper values and charities to create an ethical and strong relationship.
- Paid program: It allows consumers to receive discounts, unique offers, and access special services when they pay to join as VIP members.
Inform your audience about the loyalty program
For your loyalty program to work, make consumers aware of its existence and how it works. A wise move is to give it an identity by coming up with a campaign, a landing page on your business website, and using in-store signage from Alupanel.
Bottom Line
A loyalty program is an excellent way to retain customers who bring recurring revenue to your business. However, this requires you to know your customers by performing market research, segmenting profitable clients from those who aren’t, and establishing a plan. Once you have a strategic plan, build a program that works for you and your customers, and inform your audience about how it works.
