All businesses are striving to lure more and more customers, and it is completely understandable as the customers are the lifeline of any business. Once a business wins any customer, the next important step is how to retain him or her. The purpose of any business isn’t just to get customers, but to retain them. They want their existing customers to buy the same brand products from them over and over again. As important as it is to understand which customers have the potential to be loyal, you also have to be able to recognize those customers who are unlikely to buy again so that you can reduce your marketing spend for this particular segment. It is more profitable for your business to lose non-spending customers than to gain new ones. Customers who only buy your discounted lines and never anything else cost your business more money.
With loyalty marketing, a business takes enticing marketing steps such as credit card incentive programmes and frequent hotel guest prorammes to thank customers for their loyal and ongoing support of their products and services. It’s important for them to do this because it costs a business far more to get new customer than what it takes to sell to existing customers. Existing customers spend more than new customers who are uncertain about products they are unfamiliar with.
Sales Revenue Increases
Loyalty programs have changed the way consumers interact with ‘their’ companies. It has also changed the way consumers spend, encouraging them to part with more money. Customers are so used to the rewards and incentives they get simply by being a ‘card’ member of a certain hotel group or airline, that they remain constantly loyal to these companies because they get much more.
Another type of loyalty marketing is a points-based rewards program, and the more you spend, the more points you glean. Certainly the purpose of customer loyalty programmes is to increase sales revenues for the company, and by building a strong bond between the brand and current customers it is hoped to retain the current customer base.
By offering discounts, promotions and loyalty programs that spur the consumer to take action is what loyalty marketing is about. Offering exciting incentives like hotel stay-overs, restaurant dinners and other generous prizes, an environment is created where customers see the business as something more than just a provider of services and products. Customers who are ‘cared for’ are far more likely to stay with a company that looks out for them.
There’s No Reason to Look Elsewhere
Simply put, customers want to feel valued, and offering them incentives for using your products and services will simply increase customer satisfaction. Once you have analysed your customer base, you can design an incentive programme that the particular targeted customers will appreciate. By compensating shoppers who are loyal to you, you simply stimulate satisfaction, and everyone knows that when you’re satisfied with something, you’re not interested in looking anywhere else.