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Customer Loyalty Programs

Customer Loyalty Programs - Which One's Right For You?

Is focusing on customer loyalty worth it? Absolutely. Customer loyalty can be the driving force behind your business! Find out more about the importance of customer loyalty, how you can get it, and the types of customer loyalty programs that might be right for you and your business.



What is customer loyalty?

Customer loyalty happens when a customer associates your business with enough positive experiences that they choose to come back and do business with you whenever they need or want something you offer. When a customer is not loyal to a business, they will more than likely shop where it is most convenient - and that’s not always you. Creating customer loyalty will ensure that your customers will not only choose you every time, but they'll encourage others to do the same!

Why is customer loyalty so important?

Obtaining new customers is expensive - not to mention time consuming! It costs 50% more to obtain a new customer than it does to retain an existing one. After all, on average 65% of a company's business comes from existing customers, and a lot of those customers are the ones who are responsible for bringing in new ones. Here's another statistic for you in case you're not convinced:

"Increasing customer retention rates by 5% increases profits by 25% to 95%."
Forbes - Frederick Reichheld of Brain & Company

Customer Loyalty Programs

Now that you know the importance of customer loyalty, we're going to show you some of the different ways you can achieve it. You can increase your loyalty and customer retention by implementing a customer loyalty program. Before we go over the different types of programs, we want to show you some simple ways to create positive experiences for your customers!

Make conversation.

The best way to spark a positive experience with your customers is to make conversation! Try to get to know them, so that not only will you remember them, but they'll remember you. These personal connections and associations will keep you at the top of their mind when they're deciding where to shop.

Create a community.

People are more loyal to those they consider a part of their community. This goes for businesses too! One of the easiest ways to invoke customer loyalty is to make each and every customer feel like a part of your business’s community when they shop with you. You can showcase what it's like to be a part of your community through social media!

Interact on social media.

Speaking of social media, don't just post on it! Use platforms like Facebook and Instagram to interact with your customers. Not only is this an easy way to make conversation and create a feeling of community, but it also creates the perfect opportunity for your current customers to share your business with new customers.

Thank them for their business.

Don't forget the most important part of doing business - gratitude. "Thank you" goes a long way when it comes to showing appreciation for your customers and making them feel welcomed. People naturally like to help others, so if they know you appreciate them, they'll be more likely to help by choosing your business!

These are just a few of the many ways you can create customer loyalty. If you want to take it a step further, you can implement a customer loyalty program by choosing from the types of programs below that best suits your business! Here are a few of our favorites:

Point-Based Programs

The point-based customer loyalty program is pretty simple! It basically means that a customer will receive a certain number of points based on the amount they spend. In this case, customers are encouraged to come back to do business with you because their goal is to build up their points in order to redeem a prize. The prizes can be anything relevant to your company, and can increase in value as the number of points increases!

This type of program is recommended for businesses who offer products or services that can be used multiple times. For example, a gift shop or a hair salon would benefit greatly from a point-based program because the same customers may come back multiple times. A point-based program would not be suitable for a wedding dress store because a customer doesn’t usually shop there more than once.

Paid Membership Programs

This type of customer loyalty program allows customers to get offers and discounts when they pay for a membership. These offers usually consist of exclusive products, services merchandise, discounts, and more. This can be a one-time, monthly, or yearly fee. It's completely up to you! The great thing about this type of program is that you can increase your brand awareness by giving your members merchandise that they can carry or wear that others will see. Remember that your current customers can bring in new customers much more easily than you because people trust happy customers!

Like point-based programs, a paid membership program is best for businesses whose customers come back often. Customers aren't going to want to pay for a membership for something or someone they rarely shop from. When using a paid membership program, be sure to think about ways in which you can make your program attractive without taking away from the attractiveness of your business! For example, it's not always a good idea to take something away from nonmembers just to give it to members. It's usually best to add something new for those who pay for a membership!

Charity Programs

A charity-based customer loyalty program is a win-win-win situation! Customers are inclined to support your business because you support a knowledgeable charity. Whether you're partnered with a local or international organization, your customers are happy to help when they know it's for a good cause. When a customer chooses to do business with you because you support a charity, the charity gains support, your business gains support, and your customer leaves happy - hence the win-win-win situation!

This type of program is great for any business, but is especially beneficial for those that only see their customers once, twice, or even a few times. If a customer is deciding where to shop for something they may never shop for again, they'll consider many reasons why they should or should not do business with a certain company. If they know your company supports a charity, that may be their deciding factor!

Community Programs

Community-based customer loyalty programs are similar to the paid membership program in that customers who do business with you get to be a part of an exclusive group that creates positive experiences. With community programs, though, it's more about giving your customers things that will make them happy just because you appreciate their business. For example, many businesses with community-based programs give their customers a gift on their birthday or a free item just for shopping with them to make them feel welcomed into your community.

Community programs are great for small businesses and those looking to expand their reach. A good community is worth talking about and will give your customers another reason to share your business with others!

Start thinking about ways in which you can improve your customer loyalty. Looking for help creating your community on social media? Our Social Media Team can help!

Contributor Kacie Schechter

Kacie Schechter is a Marketing Specialist who is passionate about all things content creation with a Bachelor's Degree in Marketing from the University of Arkansas Walton Honors Program.

In her free time, she enjoys exploring the outdoors and going on new adventures with her friends and family.

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