Business in an internet-centric environment has pushed companies to find creative ways to reach and retain customer clients. Implementing tactics that increase conversion rates for new customers is important, but retaining and growing a repeat customer base often has a higher return on investment. According to Marketing Metrics, “The probability of selling to an existing customer is 60-70%, while selling to a new customer is 5-20%.” The gap in conversions shows how essential it is to reach existing customers. One great way to reach and incentivize these customers is to implement a customer loyalty program. Here are some of the great benefits of choosing a customer loyalty program strategy.
Improves Brand Awareness
After an initial transaction with a new customer, it is important to generate a productive way to convert these customers into repeat customers. If your business offers a customer loyalty program to the person upon the first purchase, this provides the perfect funnel for your business to reach out to the customer yet again. Customer loyalty programs enable your business to attain targeting information from customers (such as email addresses). Not only can you send out more information about the loyalty program, but you can continuously send lead nurturing information to the customer. This keeps your business top of mind with new customers and encourages a visit for round two.
Increases “Sale” Conversions
Many businesses promote sales within their niche market and need to reach those who enjoy their products. These sales move and push stock out of the store, leaving room for the latest products and services to enter. Those who have entered your customer loyalty program have shown that they at least have a small interest in your products and value attaining sale information from your business. These loyalty customers are more likely to return to your business and complete another transaction during these sale periods thanks to your loyalty program.
Generates a High ROI
The bottom line is one of the biggest concerns for any business. Putting money and labor into an idea is expected to bring a ROI, or return on investment. Establishing marketing efforts to convert a mere 5-20% of new customers versus 60-70% of return/loyalty customers decreases the chances of any ROI. Conversion ROIs soar when working with return/loyalty customers compared to putting the effort in to search, target, and convert new customers using similar marketing tactics.
Customer loyalty programs can be created and generated to specifically fit your business’ specific needs. No matter your niche market, a customer loyalty program can increase and support your marketing strategy and lead to company success.
