August 5, 2022

SME Business News

Small Business News UK

Why customers value loyalty programs

One of the best ways to grow a business is by attracting customers and encouraging them to repeatedly spend on your products or services. And a loyalty program is an excellent way of promoting this. This scheme will see you reward customers with a product or discount after they’ve met a set number of purchases. But why do customers love loyalty programs and what’s the best program for you? Read on to find out.

How loyalty programs can benefit you and your business

There are many benefits to a loyalty program. Most obviously, they encourage customers to spend more on your business, boosting your revenue. However, there are other benefits under the surface. For a start, you’ll be able to gain valuable consumer insights as they build up a purchasing history. By using this data, you can create a more personalised experience for your customers, enticing them to spend more. Finally, loyalty programs can furnish your business with a unique selling point to help you stand out from other competitors.

Why customers love loyalty programs

Loyalty programs can also benefit your customers too. Firstly, they help make your customers feel special – if a customer is working toward earning a reward or gift from your business, they’ll feel more valued. It shows that your business cares about their custom and wants to give thanks. On top of this, loyalty programs will save money for your customers in the long run, helping them stick to their budget or to earn a discount. Furthermore, customers love the thrill of earning rewards – the buzz of meeting your goal on a loyalty program can be extremely exciting.

Finding the best program for you

But what program would work best for your business? There’s a point-based program, where each purchase earns the customer points that can be redeemed to win a variety of different rewards. Alternatively, there are spend-based programs where customers receive their reward once they’ve spent a certain amount of money on your products or services. Or there’s a tiered system where your customer can reach new levels of loyalty over time – the more they spend, the higher the tier they reach. This was particularly effective for the clothing company, Lucy and Yak, who increased their orders by 78 percent and their customer spending by 80 percent with a tiered system. It’s also worth exploring other systems such as VIP or partnered though, to find the best scheme for your business.

Loyalty programs can work well for both businesses and consumers – as long as they’re executed correctly. If your business wants to increase its customer spending, it could be a worthwhile option to explore.