Getting your customers to buy your product is quite a difficult task. You need to create killer ads that generate sales. But online stores and business sites also need to manage marketing in a given budget fund.
Most of the business owners believe that they need to find new customers continuously. And while that is true, it is more important to retain a current customer. Do you know? Recruiting new customers costs 5x more investment than retaining an existing one.
One of the great ways to retain your consumers is by using customer retention strategies. Think of it as a way to pat your existing customers for being loyal to you (and thereby keeping them).
Do you need to set up a customer loyalty program?
A quick answer to this will be Yes. Here are a few reasons why you should start customer loyalty marketing and focus on the existing base instead of using paid advertisements for gaining new customers.
1. It helps you retain customers
A loyalty program rewards your customers in the form of discounts, value-added offers, and coupons to maintain customer spending habits. If you don’t reward your customers for their loyalty, they will switch to your competitive stores to try new products. This will naturally decline your buying activity.
2. Connect with your customer base
Gone is the time when you send marketing emails and use Facebook ads for generating sales. If you want to outrank your competitors, you must connect with your audience on a personal level. Loyalty programs not only thank your customers but also helps you build a relationship with your audience.
3. The more profitable marketing scheme
Unlike any other marketing campaign, loyalty program always works. If you can successfully retain a customer with a reward, they will recommend your store to their friends/family. Loyalty programs impact lifetime value of your customers. This means an increased revenue and profit, assuming that you design a cost-effective loyalty program. It is due to this reason that over 57% of business marketers are planning to invest in customer loyalty programs.
4. Improves your brand reputation
Last and not the least thing that the loyalty program does is reputation building. If you are serious about your business website, you should focus on building a reputation. It is one of the most critical ranking factors for search engines. So if you want to boost your reputation on a long term basis, use loyalty programs. It will make your customers happy, make them recommend your store and tell good about your business. This will ultimately improve your overall brand reputation.
5. Makes your customer spend 3x the new customers
Loyal customers who are satisfied with their purchases are more likely to come back and buy new products. If they visit your store more than once, the chances are that they will make purchases regularly.
How to use customer loyalty strategies?
A loyalty program is simply a way to reward your customers, so you will have a great degree of customization when implementing it. You can use a referral program, point-based reward system or purchase incentives, personalized marketing campaigns, cashback program, punch card program, and many more. Here are a few examples to help you get an idea for how it works:
#Example 1: ModCloth – Discount
ModCloth is a women’s clothing store that already gained popularity. They have a referral program where both the referee and referral will be rewarded with a 25% direct discount. You need to enter your email in the signup form and refer a friend.
#Example 2: TOMS – Purchase Incentive
TOMS offers a purchase incentive instead of a direct discount. When you refer a friend, both you and he/she will receive $20 off on purchase above $75. This is another excellent way to reward (and retain) customers.
#Example 3: Netflix – Personalized marketing
Netflix is a unique example of how far you can go to offer a personalized experience to your customers. They have a smart algorithm for giving highly-relevant recommendations to its users.
You can even use something as simple as a personalized email template. Something as simple as using the customer name can improve the response rate.
Over to you
There are tens (if not hundreds) of sites out there. All of them are using nearly the same marketing strategies. You need to use personal level marketing to connect with your audience.
Rewarding your customers for buying from your site will promote your store genuinely. It can in the form of the gift card, discount coupon, cashback, discount, or point(s). Just be sure to promote your loyalty program using social media. You can even use paid Facebook ads for sharing your referral scheme among the audience.
With all that being said, if your customers are not buying products from your store, there could be something wrong with either the UX or the outcomes. Optimize your store to generate maximum revenue with loyalty marketing.
Pulkit Bhardwaj is a writer for ReferralCandy and CandyBar.