Why Loyalty Programs Should Make a 2018 Comeback

You know it’s easier to sell to existing customers than acquiring new ones. Like 2X to 5X easier. It’s no wonder, then, why loyalty programs provide such a high return.

And yet, for some reason, they’ve moved out of customer attention.

I say it’s time for a comeback.

In time’s past, loyalty programs only seemed to apply to restaurants and retail stores. But with their 2018 phoenix-style rise to attention, I say we bring it back for EVERYONE.

Any smart entrepreneur can create a loyalty program that keeps past customers coming back time and time again. Cultivate a reason for them to tell their friends. Offer as much value as possible to this group and you’ll win in the long run.

But aside from my personal love for these campaigns, there are plenty of other reasons. Today, let’s dive into some more practical reasons to implement a loyalty program for your business.

1. Gather Customer Data

If you want to grow your business, you need data. You need to understand your customer, how they interact with your brand, and what appeals most to them. These programs are fertile ground for a plentiful data harvest.

Customers want better service.

You want to give them better service because it leads to profits.

The gatekeeper to this mutual goal is data. And luckily, 56% of customers are happy to share their data if it means receiving better service.

That’s what we call a win-win.

And it’s also why loyalty programs are often free. If you’re doing it right, the customer is more than paying for the service with all the data you can gather, analyze and ethically monetize the data to truly make the customer loyal to your brand.

2. Enhance Your Customer Experience

Customer support matters. In fact, Forbes notes that 79% of customers would move to a competitor if they received poor service. But it’s not just about providing a pleasant experience, you also need to show customers that you appreciate them.

“Every contact we have with a customer influences whether or not they’ll come back. We have to be great every time or we’ll lose them.” – Kevin Stirtz

A profitable loyalty program romances the customer with small and large gestures of gratitude.

Increase the perceived value of your brand by investing time, money and resources into taking care of your loyalty members. A few perks to consider for your 2018 loyalty program:

• A closed Facebook group with access to exclusive content, collaborations, and events
  
• A text message service with notifications about exclusive daily deals or meetups
  
• Weekly webinars to teach your members different subjects around your expertise
  

All this kindness also evokes the law of reciprocity. By pouring so much value into the customers, they’ll return the favor by showing true loyalty to your brand -- not just the type of loyalty who sticks around and leeches. The kind that spreads the word, gets all their friends to buy from you, and never uses a competitor.

3. Maximize Brand Advocacy

Make your loyalty program attractive to your most profitable customers. I’m talking about the top 20% of consumers who account for 80% of your revenue. How? Because they’ve been spending (and will continue to spend), making their LTV skyrocket.

So, the ideal loyalty program is already speaking to loyal customers… After all, there are only two groups of people willing to take the time to sign up,

1 - Loyal customers.

2 - People wanting a deal.

The good news? Both of these groups share a similar trait: they like to share about what they love. In the case of your brand, loyal customers love you. People wanting a deal love the amount of value you’re offering.

With the right strategy, your program can deepen the relationship with the first group, and establish a real connection with the second.

And then both become your brand advocate.

Word of mouth marketing happens when a customer has a positive experience that far exceeded their initial expectations. Do that enough time and you’ll find yourself dealing with the challenges of rapid growth. Implement a loyalty program and you can be there in no time.

4. Build Your Online Reputation

A sturdy reputation is another way to cultivate brand advocacy. And an engaging, value-driven loyalty program is a great way to build your reputation.

In today’s digital world, this is a critical element for a trustworthy brand. One of the primary ways to establish an online reputation is through reviewing platforms and other social proof. Who better to leave reviews, share testimonials, or serve as your next case study?

These are happy customers. People who love your brand. Of course, they’re the ones you should use to help build your reputation!

But you need to be careful here…

In 2009, the Federal Trade Commission published a set of guidelines regarding Truth in Advertising, which states that any company must disclose if they have compensated people giving online testimonials or endorsements in any way.

-- Prospecta Marketing

So, you’re not going to hear me telling you to trade reviews for rewards like plenty of other blog articles will. Instead, I’m going to advise that you pump as much value and resources into this program as possible. Provide them with opportunity, and they will naturally give you what you’re needing -- and so much more!

Conclusion

There are so many benefits to a loyalty program. We’ve only chipped the tip of the iceberg these last few minutes. And don’t limit yourself to the ideas of blog writers. Spend some time brainstorming how you can adapt this concept to your business.

It’s all about bringing more value than you get in return!

And given the copious amount of data you’ll receive if you implement this right, you owe the customers quite a bit of value in return.

Don’t be afraid to think outside the box and find something that works for you and your audience. It doesn’t take a lot to exceed expectations. Just that you’re trying to will resonate with members of the program.