It is believed that loyalty programs were introduced for the very first time in the 18th century by the American merchants. They gave away copper tokens with the products purchased, which could be redeemed by the customers later. The copper tokens turned into paper coupons, coupons into cards, and now, the cards have become digital and are stored on cloud. Today loyalty programs have become the brick and mortar for any business.
According to a recent study, about 72% of Gen X and Gen Z, 56% of Baby Boomers, 68% of Millennials and 42% of people born in 1945 or before that, agreed that they could be influenced to choose a brand over another because of a loyalty program. Even though a tremendous transformation in the loyalty programs market has been observed, many businesses fail to gauge its hidden potential. Let us understand in depth how loyalty programs have an immense potential for business disruption today:
Boosting Customer Retention and Revenue Rate
According to Marketing Land, 61% of the businesses find customer retention a hard nut to crack. The rewards offered in a loyalty program encourage the customers to choose a specific brand over and over. The consumers appreciate added incentives and welcome them by purchasing more. Thus, loyalty programs help businesses increase the revenue rate by retaining more and more customers.
Enjoying Proximity With the Customers
With the advent of mobile apps and loyalty program integration in smartphones, the businesses can stay connected to their customers 24X7. In fact, the loyalty program industry has seen an exponential growth over the past few years because of the adoption of smartphones by the consumers. The loyalty programs apps have made it possible for app users to save their shopping wishlist on the go, get push notifications for the latest offers & updates, find the nearest store location and much more.
Facilitating Personalization Using Gathered Consumer Data
Through artificial intelligence and data analytics, the businesses can easily gather consumer data once they register for a loyalty program. This data helps the companies to segment the customer profiles according to purchase behavior, preferences, and buying habits. This information can then be used for omnichannel marketing and e-commerce. It can also be used to plan tailored promotions, offers and incentives according to every customer, providing a highly personalized experience.
Building a Customer-Brand Relationship
Loyalty rewards programs send a caring and thoughtful message to the customers and ensure that the business is not just about sales, but also about building a long-term relationship with them. Furthermore, a loyal and happy customer is the key to word of mouth referrals and helps you set a positive image of your brand and increases the sales without much effort of your own.
With technological advancements, setting up a loyalty program is not that daunting. However, diligent research into the latest trends and market insights is definitely required before finalizing the reward system. Once the loyalty program is set up, it becomes independent and requires little input from your side. So increase your business growth, retain customers and build a strong brand reputation with loyalty programs.