Let’s be real here, as a business, there will never be enough customers. While of course, we are always limited by the maximum capacity of our businesses to be able to handle more customers unless we’re in a very specific luxury niche. So, actually, no. You do not want more customers. To be precise, you want to generate more revenue. Instead of endlessly reaching out to new customers, your ultimate goal is to keep most of your customers coming back to you.
As a matter of fact, you save more and earn more from customer retention than customer acquisition. Statistically speaking, you spend 5 times more to acquire a new customer than to retain an old one. Loyal customers are more likely to refer new customers, to repurchase old products and to try new products. Even with just 5% of your customers retained, your profit can skyrocket to as much as 45%!
It leads us to the idea of membership economy. For all businesses, customer retention is one of the most efficient and effective ways to boost your sales. Rewards marketing allows us to market to new and existing customers alike, and what’s best – to build up customer loyalty. New customers might be interested in your loyalty programs, when your current customers can continue to consume your services or products as their main supplier. Think about the cafe you drop by on your commute, your favourite hang out place or the chained store nearby. You are likely to be a part of one of these programs yourself. These programs foster customer retention and frequency of purchases. In fact, a Visa-sponsored study in 2017 found that 81% of customers said that loyalty programs encouraged them to continue spending money on that business.
Intrigued? Keep reading. We are going to tell you more about reward marketing, a simple way to retain customers!
What is Rewards Marketing?
Let’s get the basics out of the way first so we’re all on the same page. Rewards marketing is when you offer customers rewards for engaging with you. It could be a discount, a loyalty card or whatever works best for you. Here are some of the techniques you can use in your business.
Loyalty cards are always paired with loyalty programs to reward customers for visiting repeatedly. It can be either real or virtual or both! The card stirs up a sense of brand awareness. With a card in hand, everything is just more legitimate.
Developing a good relationship with your customers is the key in being able to use a range of rewards marketing techniques, one of which is limited members-only offers. This can be achieved through email marking. By emailing a special members-only sale or release, you make your customers feel special. It can also be a reminder to encourage them to get the best deals before products sell out.
A small niche company has this down – Hedgehog Leatherworks engaged their customers in every step of product development to ensure the products turned out to be exactly what the customers were looking for. They especially specified on their site that their products are generally “only available to our email subscribers and are never sold publicly.”
While this model might not work for most companies, a similar model on a smaller scale by offering limited-time offers just to loyal customers will be just as effective in rewarding your most loyal customers, while creating new ones!
Points-Based Loyalty Program
A points-based loyalty program is the most common method to keep customers returning to your store. It works for businesses of all sizes, from major supermarket chains to small online boutiques. For the popularity of these loyalty programs, there are plenty of options for store plugins with quick and easy implementation. A loyalty point scheme can give you perks such as vouchers for money-off in future purchases and free products when customers redeem the points.
It works with stamps too. When customers fill their card with stamps, they gain a reward. You can choose to offer something for free when customers spend over a certain amount as well. This card promises multiple purchases. It signifies accumulation of loyalty for rewards.
A great rewards marketing tactic is doing limited-time offers, such as a short window to get a significant discount across the store or a discount code delivered via texts and emails.
Clothing brands like Boohoo.com are prolific for doing these limited-time offers. When they are about to launch a sale, what they do is simply to notify their customer in any ways they possibly could. These discounts can last anywhere between just a few hours and a few days.
Despite the fact that brands like Boohoo do these offers so often, say a few times a month or even more, they continue to see good results. Why? Because they reward customers who are willing to act fast to get the products at a heavily discounted price.
Tips for an Effective Rewards Marketing Program
There are 3 key things you should bear in mind as you consider putting reward marketing into practice:
1. Keep It Simple
Do not overcomplicate your rewards program. Customers, both new and old, only want to know what they could do to get the reward. Also, remember not to make the lead-up too long. If customers feel like their loyalty is in vain, they might go somewhere else with rewards. Consider the value of a customers and aim to reward them as frequently as it makes financial sense to do so.
2. Collect Personal Information
Be sure to collect customers’ basic information. You know about composition of your customers with for example, their gender, age and occupations. You are likely to find their phone numbers and email addresses useful in the future when you introduce new campaigns. With these details, you can sort customers into one-timers, frequent visitors or VIPs to decide who you offer the best deals to as well.
3. Data Is Important
The most valuable thing in a CRM (Customer Relationship Management) system is the data. It records customer behaviours for you to analyse the market you are in and respond with accordance to it.
Woah. That is a lot. Fortunately, technology has made it easier than ever for even the smallest businesses to implement a rewards program. Customers no longer have to ask to know about their progresses. With a few taps to log on to your site or open an app on their smart device, customers have access to whatever information they need. On the other hand, merchants are able to have everything in sight on the admin panel.
There are a number of CRM systems in the market for businesses of all sizes. Juicyapp is here to help! We offer free membership solutions for SMEs to enhance customers loyalty by making sure your customers are motivated to return to you again and again. To find out more about our solutions, click here.