We have seen that a lot of businesses raise their products or services’ prices when they seek for the ways to increase their revenue.
This practice is no longer valid as today’s customers are more aware than ever before, more price-savvy and more efficient in their spending. So, instead of raising the prices and facing the threat to lose customers, execute a strategy that increases customer retention, purchase frequency, and average transaction volume.
Well, that sounds a hefty objective, Doesn’t it? The good news is that you can achieve all these three elements through a customer loyalty program.
Establishing customer loyalty in today’s competitive markets is difficult. The digitally empowered customers are not hesitant to take their interest elsewhere within a matter of minutes. Access Development, a research company, reported that 79% of the customers are likely to take their business to a competitor within a week they start experiencing unsatisfactory customer service from a business, and the estimated cost of the customers switching from a business to its competitor because of a poor service, is around $1.6 trillion.
Today’s customers are bombarded with never ending choices not just in terms of brands but also pricing, discounts and promotions and customer services – all developed to influence their choice. A strategically developed and well-executed loyalty program brings tangible incentives for the customers to purchase while also infusing a better sense of brand awareness in the customer base.
Almost all industries have been embracing the potential of an effective loyalty program to retain existing customers and acquire new ones, to encourage repeat business and increase sales.
The Virgin Experience Days has been practicing various loyalty programs for a long time. One way they reward their customers is by sharing with them the opportunities for discounts on their future purchases. The loyalty programs especially take into consideration the “favorites” of the customers.
Deloitte says that 85% of the diners in the U.S would like to avail the loyalty program at their favorite restaurant if they get it for free. Another case from this industry: If you have not read about Starbucks’s loyalty program, you are surely missing on a great piece of learning. The Starbucks app is an ideal example of a successful and effective digital loyalty program. The Starbucks app lets users earn stars for every order they place and redeem them in real-time, encouraging customers to come back on a repeated basis. The app brought 20 million global members to Starbucks that let the company to escalate its revenue and invest more in its customers.
Fallon Health, a Massachusetts-based health insurance and health care service provider, partnered with Forrester Research to determine customer expectations and make more personalized offerings. In addition, it is also using solutions like VOC programs as well as journey mapping tools to drive customer loyalty.
Tailoring company objectives to customers’ changing expectations is no longer a choice. Customer loyalty programs are not just the source of bringing repeated business but also the determinant of the future key players across all industries.