- What is a Customer Loyalty Program?
- What are the benefits of customer loyalty program?
- How to Start a Customer Loyalty Program?
- How To Measure Customer Loyalty?
- Do You Really Need A Customer Loyalty Program?
Do you know the Biggest advantage of selling on your own website than selling to other marketplaces?
The Loyal Customers!
Yes, the loyal customers who do repeat purchases at your store are the kings – The most wanted ones.
The primary deal to consumer matters, however, if you truly need to make your online business a win, you have to center around the second, third… And you get the thought.
Do you know, It is 6-7 times more costly to obtain another client than it is to keep one. Your primary concern won’t love you for pursuing new customers.
Customer loyalty programs work, however most organizations fail to understand the situation.
We’ll dive right into everything you need to know about customer loyalty: what it is and why it’s important, and all about customer loyalty and the value they can add for your customers and your business.
What is the Customer Loyalty Program?
A customer loyalty program is a connection between a brand and a customer. When the company offers exclusive products, offers, discount coupons, promotions, or pricing; and in return, the customer agrees to “go consistent” with your brand through repeat purchases or engagement.
Before you get started, make sure your goals are clear and you’re doing it for the right reasons. Hey! wait, do you still wonder about the customer loyalty?
What is customer loyalty?
If your customer is willing to buy or work with your brand again and again, then it shows that customer is loyal to you and he/she comes under customer loyalty.
This customer loyalty is the result of a positive customer experience, customer satisfaction, and the value of the product, the customer receives when he transacts.
Why does the company want loyal customers?
HubSpot says, loyal customers…
- Convert and spend with brands they like more often.
- Spend more than others
- Tell their family and friends about positive experiences. Word-of-mouth marketing is more effective at driving new customers than branded
- Content and advertising, and in turn, these referred customers become loyal customers that are likely to spend more than average.
- In the U.S., 40% of online shopping revenue comes from repeat customers, who make up only 8% of site visitors.
What are the benefits of Customer Loyalty Program?
1# Better Customer Retention
Customer Loyalty Program helps in keeping the customers engaged. It affects how likely your customers are stick to your brand and the amount they spend on your store.
It’s not the only price that affects the buying decisions of the customers but the shared value, engagement, and the social connections with the brand – the emotional bond.
If you are looking to engage with the customers beyond just the point of purchase, Customer Loyalty Program stood best at that place. Ultimately, we all want customers who are enjoying purchasing from us. Customer satisfaction is the best key to get your brand in limelight.
2# More Customer Referrals
If you have satisfied customers then lemme tell you, dude, you are truly blessed because those happy customers would definitely recommend your brand to their near and dear ones. It is one of the most trusted forms of advertising as it acquires no efforts.
Referrals result in driving more sales without any efforts and generating more revenue for your business. Researchers found customers referred by loyalty members have a 37% higher retention rate.
Customer Referrals are sheer fun and gain. Does your shopping portal too have this value return on investment? Experience the same zeal for your eCommerce site.
Retaining the happy customers is more cost-effective than going blindly on the hunt of acquiring new customers or leads for your business.
It’s a fact that if you rush to acquire new customers for your business would be 5 to 20X more clumsy and difficult task than retaining the one who is already running in a row.
4# User-Generated Content [UGC] and Reviews – Ratings
Customer Loyalty Programs that make good impressions with reviews and appraisals on sites and web-based social networking will result in loads of dependable and bona fide User Generated Content [UGC] from customers – singing your gestures of recognition so you don’t need to.
Modern buyers have lost trust in the traditional mode of advertising and instead place a high premium on peer-to-peer recommendations, including ratings and reviews.
You must have observed that the most successful eCommerce products get multiple reviews from a variety of consumers.
However, not all of the consumers that are leaving reviews may be loyal to the brand. In fact, some may be first time shoppers that have simply written a review because they liked this one product.
How to Start a Customer Loyalty Program?
Use these 6 strategies to start a successful customer loyalty program, which not only drives more sales to your store but also give your customers a great feeling when they get something more than they expected.
Trust me, it’s a great feeling!
1# Choose an outstanding name
Be the ‘Elizabeth’ of the marketing world. Choose the name which creates trust, generates curiosity among the customers and also creates that urge which lets your audience feel interested in visiting too.
The name should not be like offering huge discounts and offers to the customers, or will get rewards – it needs to make customers feel excited to be a part of it.
2# Create deeper significance
Always remember, you are not just the one, the market is vast and the internet is everywhere. Customers may take the customer loyalty programs as negative and might consider it as a clever trick of yours which lends them spend more into your business.
Possible though, you are running with this strategy, because most of the business sees the customer loyalty programs just to earn more money. They readily ignore the customer retention, and as the result, they just produce nothing so that customers feel excited about it.
Make your customer loyalty campaign as compelling as it could be, and do add the WHY factor in the products and services you are offering as the part of a program.
Amazon Prime costs almost $100 per year to join, but the value proposition of paying more money isn’t just about the free two-day shipping. Amazon offers its members a ton of other convenient rewards — like the free TV show and movie streaming, and free grocery delivery from popular grocery stores — that speak to the value for the customer (speedy delivery) in a broader context.
3# Reward a variety of customer actions
Just another way to reward your customers is the varying customer actions they perform into your website and outside of it.
Customers who are subscribing your newsletters, giving good reviews, making successful purchases and referring your products and services. Or the ones subscribing to your blog are still valuable signs that a customer is engaging with your brand -so reward them for it.
It’s what 75% of customers involved in loyalty programs want.
4# Offer a variety of rewards
Another approach to give more an incentive to your loyal customers than just discounts coupons and OFFs is to offer diverse prizes and rewards.
Customers who spend at a certain threshold or earn enough loyalty points could turn them in for free tickets to events and entertainment, free subscriptions to additional products and services, or even donations in their name to the charity of their choice.
5# Make your “points” valuable
If you want your customers to get enroll in your customer loyalty program, make it fairly worthy — points-wise.
Just like with inbound marketing, if you’re asking for more of your customers’ money, you must offer something valuable e-resources in return, they can be ebooks, guides, tutorials in order to make sure the reward matches the effort expended.
If you’re putting forth cashback remunerates as a feature of your customer loyalty program, allocate a monetary incentive to your focuses so customers can envision what they can gain (and spend) by proceeding to buy from you.
6# Suggesting would work
The recommendation is helping your customers. Assist them with varied product options which they have been searching since quite some time.
Offer custom related products that are frequently searched by your customers at the time of purchase and even after a successful purchase already. Recommend your customers with better products as a part of customer loyalty program.
How To Measure Customer Loyalty?
If you are not tracking your customers that can be the reason of letting your customers go. Measuring the customers’ loyalty isn’t the option, It’s a requirement. Track the relationship with your customers with these metrics:
1# Customer Lifetime Value(CLV)
Customer Lifetime Value (CLV) is a simple calculation but one that surprisingly few businesses are able to calculate.
It is calculated as:
|(Average Transaction Value * the average number of times a customer transacts before lapsing) – your cost per acquisition (CPA)|
There are a number of alternatives, for example, applying your gross margin rather than your CPA.
2# Net Promoter Score (NPS)
How much a customer likes you? This metric indicates the likeliness of your customers referring you to their friends. It is quite a simple way, the consumer just has to answer this simple question with a value between 1 – 10.
This is a powerful metric because of the fact that when you recommend a product, you put your own credibility on the line.
NPS divides your customers into 3 categories:
|A score of 6 or lower is segmented as “Detractors”||A Score with 7 or 8 is segmented as “Passives”||A Score with 9 or 10 falls into the |
|They won’t recommend you to anyone, will most likely not purchase from you once more.May even hurt you through negative informal.||They are quite satisfied, but not blissful enough to recommend you. They won’t hurt you.|
They are your promoters, your equivalent of the people camping in front of the Apple store. They’re likely to recommend you and buy from you again.
Calculate your total Net Promoter Score is by subtracting your “Detractors” percentage from your “Promoters” percentage.
3# Customer Loyalty Index (CLI)
Standardized tool to track customer loyalty over time, and it also, integrates the values of NPS, repurchasing, and upselling.
It calculates all the three values with an NPS-like questionnaire on a 6-point scale. 1 stands for “Definitely Yes”, 6 stands for “Definitely No”.
How likely are you…
…recommend us to your friends or contacts?
…to buy from us again in the future?
…to try out other of our products/services?
Your total CLI is the average score of the 3 responses.
1 = 100
2 = 80
3 = 60
4 = 40
5 = 20
6 = 0
In this way, CLI is calculated, which determines the customer loyalty.
Do You Really Need A Customer Loyalty Program?
Loyalty programs, as should be obvious from this guide, are an enormous help in eCommerce business. They increment client maintenance and exchange esteem while cutting your expenses. In case you’re extremely genuine about making the most out of your web-based business site.
Loved my words? It may happen, Somewhere in this spherical world, there is an e-commerce store owner like you who have gone out to search for the secret to loyalty program success. Spread some good karma by sharing this blog now.