How A Loyalty Program Adds Value to your Customers' Lifestyle
It’s always exhilarating to close new deals and onboard new customers who purchase from you. Every time that happens, it’s as if the brand moves one inch closer to its desired business goals.
Not to forget all the moving parts involved in making this happen! Starting from marketing, technology, customer service, and sales teams, everybody brims with pride and happiness.
But do you know that only 20% of first-time buyers will ever go ahead and make a second purchase? All that hard work, time, energy, and money invested for months feels like too much work with a negligible ROI.
That’s where it feels marketing is tough to crack, isn’t it?
Well, guess what? That’s where the power of a long-term relationship kicks in! A loyalty program.
A strategically planned and top-notch execution of a loyalty program ensures that you not only attract new customers but also reduce the churn rate, boost sales and increase your brand's profit flow.
What Customer Loyalty Programme is Not?
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Discounts are “so-called” promotional activities that are fads among brands to retain customers. Unlike a loyalty program, there is no way a discount can replicate the impact or even carry the essence of nurturing customers for a long time.
On the contrary, discounts may not be incredibly attractive terms, when used consciously, they can turn one-time customers who keep coming back for more.
According to the Harvard Business Review, “a company is profitable if its customers tend to be loyal to the brand.”
A lot goes behind making a loyalty program worthy of it being called loyal. Be it luxury automobile brands like Audi or brands like Nippon Paint, they do a phenomenal job at making their loyalty programs competitive and useful for their existing Customers. Audi India's Head Balbir Dhillon spoke about how loyalty programs are more than just a marketing gimmick when he said, “In the space of loyalty programs, we have run pilots in different geographies over the last year and these have revealed that customers are always on the lookout for rewarding experiences.”
Three R’s of Customer Loyalty Programs that Guarantees Happy Customers
There are 3 main pillars that make any loyalty program hold strong from the ground up and make it 10X valuable to your customer’s lifestyle.
Let’s find out what those pillars are.
i) Retention
Any company's motto should be to stimulate a relationship with its customers that last. It should be so authentic that customers should feel as if they are an exclusive part of the family. Because if that code is cracked, a steady stream of revenue over time paves its way.
This is majorly done via offering tangible rewards as exceptional discounts, gift cards, entry to exclusive members only events, points, coupons, etc. This is an effective way for the brands to ensure value creation and spread great word of mouth among the previous and potential buyers.
ii) Recognition
It's because of your customers, that businesses succeed, and it's important that you let them know you care about the business they bring your way.
One great example in action of this is Nippon Paint’s "Rangon Ke Badshah" contest, which rewards the most skilled car painters. The program is a nationwide effort to connect with over 10,000 car painters through skill contests, customer loyalty benefits, and rewards & recognition with the top prize of a Tata Tiago car.
Phoenix Tech Consulting Pvt.LTDis proud to contribute towards Nippon Paint’s initiative of bringing paint contractors from PAN India together through intensive planning and execution of a successful loyalty program that is being run worldwide.
iii) Relevance
The first mistake brands avoid making is treating every customer as identical or equal. You should be mindful of crafting your rewards in a way that is super relevant to your target audience and consumers.
When your offer is hyper-personalized and relevant to your customers, their experience with your product is automatically enhanced. This happens when a company leverages customer data to use it for its greater good. This also reflects if the brand actually listens to what their customers aspire for in the longer run.
How Long Till You See Success From Investing In Loyalty Programs?
Amit Kaushik, the Co-founder of Phoenix Technologies who majorly handles the business development and marketing side operations, says that “when all brands are fighting for your customer's attention, it’s first crucial that your customer understands your brand in a better way. “
After working with Audi India and Nippon (which by the way are two highly distinctive but successful brands catering to an entirely different segment of customers) he has helped these companies conceptualize their loyalty program campaigns, found in his experience that the initial reach of the programs may only be 1% or 2%.
However, it takes a year and a half to convert these numbers into actual sales and profits. This shows that you need to have a bigger long-term vision if you want your brand to excel in this area.
In a nutshell, he sums up by saying, “Put customers first, make them feel special, make them feel at home, and they will never turn their backs on you. It should be your conscious efforts in making sure that your existing consumers stick to your brand for the longest time possible.”
Are You Looking To Get a Hand With Implementing A Customer Loyalty Program?
We know how to predict and mitigate risks for your business with strategic planning, implementing, and executing a campaign.
Marketing is undergoing a fundamental shift. How consumers research and buy products are evolving. However, marketers have been slow to adapt to that change.
Given the entire notion of marketing came to be defined by the idea of a one-way conversation between a marketer and a customer, it's a loyalty program that brings meaningful results.
Yet today, an increasingly empowered consumer base demands different approaches to business, which require high expectations for what is possible
If you are thinking of starting a loyalty program for your products or services, let us let you, it’s already a good idea!
But if you are clueless on the execution part of it, lay it on us! We shall take care of it for you. All you have got to do is reach out to us!
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