Customer loyalty means your customers’ continuous purchase of your products and services above all others.
When customers remain loyal to a specific company, their purchasing decision is unaffected by the cost or availability of the product/service. Hence customer loyalty is essentially profit creation at the service provider’s end. The Customer Loyalty Program seeks to enhance customer loyalty through various measures like the reward system, special sales, etc.
The Customer Loyalty Program is a cost-per-action (CPA) or a performance-based program that seeks to achieve customer loyalty through various factors such as reward points, discounts, customer retention rate, etc. The reward points are a measurement of accomplishment and are given according to various customer retention rate criteria such as frequency of purchasing, the number of buy transactions, etc. Thus, the more the customer retention rate, the higher will be the points for that customer. The Customer Loyalty Program rewards customers for their purchases in different forms such as coupons, discounts, gifts, etc. The objective behind the Customer Loyalty Program is to make the customers return to your website and make repeated purchases. Through this, you can realize your ROI or return of investment which is determined by the conversion rate of existing customers to new customers, the number of customers visiting your website, etc.
What are some of the advantages of the Customer Loyalty Program?
The advantages of a Customer Loyalty Program are: The most important benefit of a Customer Loyalty Program is that it helps in increasing the number of loyal customers. There are many other programs, such as loyalty cards, reward programs, etc., which help customers in identifying their specific needs and thus helping to improve them. It is a good way to know the requirements of your customers and to satisfy them.
Some of the common benefits include: reducing the operational cost and also increase your brand exposure. This program is very effective for attracting new customers. You get the maximum return on investment.
Another benefit is decreasing your customer churn rate and improving your customer satisfaction. With a Customer Loyalty Program, you can enjoy all these benefits and, at the same time improving your customer relations.
Customer Loyalty Programs have advantages for both the seller and the buyer; however, with the rise of technology and the Internet today. Automating a customer loyalty program can be much more advantageous.
KIPPIN, a company known for their bookkeeper software services and providing the best accounting software for small business, shared all the reasons why digitization is a smart move by entrepreneurs to make customer loyalty programs more digital in the infographic below:
