A customer rewards program allows customers to gain points for their purchases, which can then be redeemed for a cash value. It might also manifest as a set reward that is given to customers after they make so many purchases, or spend over a certain amount with the company. The most effective way to implement a customer rewards program is by using a professional loyalty agency.
So, now you know what a customer rewards program is, let’s take a look at 6 of its most significant benefits.
1. Retain existing customers
A customer rewards program will reward customers for continuing their relationship with your brand, encouraging them to return to your business again and again. As you continue to foster this relationship, you will be able to start turning these one-time purchasers into loyal customers. This is extremely cost-effective, as retaining customers is drastically cheaper than constantly canvassing for new ones.
2. Attract new customers without changing price
Most businesses will have a close competitor that they will have to outdo in order to gain custom. In order to do so, businesses might lower their prices to beat the competition. However, this can reduce revenue in the long run. Instead, compete with other businesses by introducing a customer rewards program, setting you apart from the competition without compromising your price.
3. Create advocates for your brand
The customers that spend money aren’t the only ones who are valuable to your company – so are the customers who generate sales, known as brand advocates. These loyal customers are the people who love your products and services, and so tell everyone about you on social media, or talk about you to their family and friends. Brand loyalty not only creates brand advocacy, but the relationship is reciprocal, meaning it works the other way around too.
4. Improved customer engagement
Customer engagement is essential for a business to be sustainable in the long run. Thus, it is crucial to encourage and increase customer engagement. By implementing a customer rewards program, people who have signed up will be more open to clicking on promotional links and receiving emails, ensuring that a reliable bond is built between brand and customer.
5. Better customer experience
Nowadays, customers don’t just want a good product for the best price, they also want an excellent customer experience. If they have a bad experience with your brand, they are less likely to shop again. Conversely, 89% of consumers are more likely to make another purchase if they have a good customer experience. By rewarding customers for their purchase, this can improve customer satisfaction, and therefore customer experience.
6. Increased sales and revenue
One study found that 43% of customers will spend more money when making a purchase with a brand they feel loyal towards. This is because they know that their experience and products will be good, and thus don’t mind paying a bit extra for the privilege. The same goes for customer rewards programs – if customers are a part of the loyalty scheme, they will be more likely to spend more as they will be able to reap the benefits of the extra points in the long run.
And there you have it – 6 revolutionary benefits of a customer rewards program.