7 Loyalty Program Benefits for Businesses

1. Eliminate Competition

When more than one brand offers the same or similar products, consumers naturally look for the best deal. Online shopping makes it easy to compare pricing between brands quickly.

That means if you don’t offer the lowest price, you could miss out on sales to the competition. If you’re competing with large businesses such as Amazon, it’s almost impossible to win on price alone.

A customer loyalty program could help give you a different competitive advantage without the need to lower your prices. Earning rewards through your program offers customers different reasons to stick with your brand, even if the prices aren’t the lowest—a huge loyalty program benefit.

2. Retain Customers

Another loyalty program benefit is retaining customers. Increasing your customer base is essential, but keeping the customers you already have can be more profitable. The standard metric says that finding new customers can cost you five times more than keeping a customer you already have.

You could also see a 25 to 95% boost in profits by increasing your customer retention rates by 5%. Even if your results fall on the lower end, the increased profits are worth the effort.

An effective customer loyalty program encourages your existing customers to continue buying from you. They want to continue earning rewards from the program.

3. Increase in Sales

Depending on how you set up your loyalty program, it could encourage customers to spend more money and shop more frequently.

When customers earn points for purchases, they might spend more to earn more points. If you have special offers for loyalty program members, this can encourage them to take advantage of those specials.

The increased sales can be especially true if you have tiered benefits. For example, you can look at the average spend or the entire customer base or a specific segment. Let’s say the average spend is $90. You can create an offer that customers might earn double points if they spend a minimum of $100 and offer 7-day expiration date. These strategic offers can help push individual sales higher than they would be otherwise.

Redeeming points earned can also increase sales. Customers might decide to make a purchase that they wouldn’t have made otherwise since they have points to redeem.

Customers might also spend more when they redeem points. Since they’re getting a discount or something for free with the points redemption, they might buy more things they wouldn’t have purchased. Many times, when people receive something for free, they want to buy something additional.  We believe these increased sales are another loyalty program benefit that outweighs the minimal costs.

4. Gain Customer Insight

Another customer loyalty program benefit lets you track and analyze how your customers shop and what they buy. You can look at things such as when and how often they visit and what they do during those visits. You can look at order history to see what they’re purchasing versus what they’re browsing.

This information can help you improve the products, services, and experiences you give to your customers. It can help you identify weaker sales times or products so you can find ways to improve those areas. You can also use the information to capitalize on things that are working well.

5. Personalize the Experience

The insight gained through the loyalty program lets you customize the experience for repeat customers. You can use the information to show them things they might be interested in buying based on past browsing and purchases. Those customized suggestions might encourage larger purchases compared to generic product suggestions that might not interest-specific shoppers.

You can also customize the special offers you send to each customer. You might offer a specific discount or freebie based on what a particular segment of customers likes. You can also provide birthday gifts or specials to customize the experience – a great loyalty program benefit.

One great thing about loyalty programs is the ability to change them over time. You can adapt them based on what’s working and what’s not working.

It’s easy to change your program and customize the experience when you use an automated loyalty program. You can manage the program’s different aspects and use market segmentation to offer exclusive deals or incentives.

6. Strengthen Branding

A massive loyalty program benefit is it gives you another chance to strengthen your branding.

Branding can impact profits, with statistics showing that consistent branding bumps up revenue by as much as 23%. The use of color can increase your brand recognition by 80%.

Your loyalty program platform is the perfect spot to incorporate your brand colors, fonts, images, and other design elements. These tools help strengthen your core image and brand awareness.

Incorporate your company philosophies and values into the program for additional branding. If your company has a young, playful vibe, incorporate those ideas into your application’s phrasing and benefits.

Including those branding elements in the program helps customers feel a more reliable connection to your brand. Overall, this can increase loyalty even more.

7. Attract New Customers

The idea of customer loyalty is it focuses on keeping your existing customers happy and spending more. Still, probably one of the greatest loyalty program benefits is your program can help attract new customers. Consumers like the idea of being rewarded. Hearing that your company offers a loyalty program may encourage new customers to consider your company over another.

You can also encourage existing customers to help you find new customers. Some of your current customers will naturally talk about your brand because of the loyalty program, even if they don’t get anything extra for sharing it. People like to share deals and positive experiences, so the program can boost your word-of-mouth marketing.

RoboRewards make it easy to incentivize sharing your brand. You can offer customers a reward for referrals to your program. That perk might encourage customers to talk about your brand and loyalty program more than they would have.

Enjoy Loyalty Program Benefits

Taking advantage of customer loyalty program benefits can boost your sales and benefit your company in many ways. The program gives you valuable insight and lets you offer a unique, customized experience.

Are you ready to set up your loyalty program? Contact us for more information on how RoboRewards can help.