5 Key Benefits of Customer Loyalty
From Burger King to Virgin to Google to Ford, with a plethora of high profile brands either launching their first loyalty program or reinventing dated systems, should you also be considering the benefits of the right loyalty scheme in your business?
For loyalty leaders, the advantages of customer loyalty result in revenue growth roughly 2.5x as fast as other companies in their industries. Below we highlight some of those main advantages.
Differentiation: Don’t compete on price
Having the right loyalty system adds value to the relationship with your customer. Fostering a connection beyond just transactional, a connection that is emotional through tactics such as surprise and delight creates a deeper level of commitment to your business. Loyal customers will buy from their preferred brand, even if a similar product is available elsewhere at a lower price.
Increased revenue: Loyal customers are your best customers
Incentivised purchases, coupled with the increased brand connection, helps increase average order value and order frequency. 70% of emotionally engaged consumers spend up to two times or more on brands to which they are loyal, and 86% of consumers with high emotional engagement say they always think of the brands they are loyal to when they need something.
Customer retention: Save money while increasing profit
Finding a new customer can be up to 25 times more expensive than keeping an existing one, and increasing customer retention by just 5% can improve profits by anywhere from 25% to 95%!
Driving customer loyalty helps retain your customers by making them feel valued and building that meaningful relationship beyond transactional. We already know that loyal customers spend more, more often. If you multiply that by the length of time they stay with you, there is an opportunity to increase their lifetime value exponentially.
Grow your customer base: Word of mouth marketing
Turn your customers into your sales force. Building loyalty with your customers is the first step to creating brand advocates. The people who will leave positive reviews online, engage with your social media content, recommend you to family and friends and more. Over 90% of consumers trust family and friends recommendation more than advertising, and almost two-thirds of consumers say that online reviews are an essential part of their decision-making process. Word of mouth is one of the most powerful tools in your kit for gaining new customers.
Better business decisions: Empower decision making with data
One of the most valuable benefits of a loyalty program is often overlooked. The data you are enabled to collect that you otherwise may not have had access to or easy access to provides a deeper understanding of individual customer behaviour. From customer demographics to spending habits and product preferences, you can use your loyalty scheme data to create personalised rewards, send targeted and timely promotions and ultimately heighten further the other benefits we have already discussed.
If any of the above appeals to you, then you may want to consider how you can build customer loyalty in your business.