Retaining customers is a lot easier and cheaper than winning over new ones. Studies have shown that gaining a new customer is up to twenty-five times more expensive than retaining an existing client.
Small businesses that want to operate more cost-effectively should focus their efforts on increasing customer loyalty.
Benefits of Customer Loyalty
Loyal customers are more likely to spread the word about your business. They will recommend you to their friends and family, and leave positive reviews on your website as well as your social media accounts.
This means you’ll gain new customers without lifting a finger. And those customers are there to stay: studies have shown that clients referred by a friend are 37% more likely to stay loyal to a business than others.
How to ensure the loyalty of a customer? Reward them for it.
How to Start Your Loyalty Program
First of all, try to see it through your customers’ eyes. They’re probably already members of a few loyalty programs; why should they join another one?
Give them a reason beyond the program’s monetary value. Depending on the nature of your business, you may offer early sneak peeks into your new products or services, invites to trade shows or other events of interest, or anything else you can think of that would make your customers go “Wow.”
Team up with other businesses and offer common, unexpected benefits. A debit card that earns customers points toward a cinema ticket? A cell phone subscription that comes with a Netflix account? These and similar rewards will get your customers excited about your loyalty program.
Be Clear About the Value
Loyalty programs earning customers obscure, good-for-nothing points inevitably fail. Be upfront about what your loyalty points are worth.
If a customer needs to buy a thousand pairs of shoes before they can exchange their points for a set of shoelaces, they’ll abandon your program, and maybe your business altogether.
Offer clear, useful, and achievable rewards. If you can, present different types of rewards for your customers to choose from. For example, you can offer donations to various charities, magazine subscriptions, or anything else besides free products.
You may even consider rewarding other actions besides purchasing. Offer loyalty points to customers who share your stories on social media, answer a survey, or bring a new customer to your business.
Once you have a loyalty program in place, make sure your customers can join it easily. Your store, your website, and your social media accounts should all direct your customers to signing up for your loyalty program.
An excellent way to raise awareness about your program is by introducing it as a game. Offer prizes to the first couple of subscribers, or to people who reach a certain amount of points within the first few months.
A fun and friendly competition is a great way to get people excited about your new program. Get creative and think of new ways for customers to engage with your business.
Make it as easy as possible for people to join your program and shop at your store. For example, offering the most convenient payment methods to your customers is a must.
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