Why is Customer Loyalty Important?

These are your loyal customers.

They account for about 20% of your customers.
But, generating around 70% of your sales.

Why are Loyal Customers Your Best Customers?

NEW CUSTOMER

  • 50-60% of new customers don’t come back after their first visit
  • New customers are more price sensitive
  • The probability of selling to a new prospect is 5-20%
  • The average conversion rate (actual sales) from promotions sent to new customers is less than 1%

LOYAL CUSTOMER

  • Loyal customers spend more over time and generate more revenue
  • The probability of selling to an existing customer is 60–70%
  • They want to hear from you and are more likely to respond to offers
  • They are 70% more likely to share your business
  •  Facebook, Twitter, Instagram

So, what would happen if you increased your loyal customer base?

Businesses can boost profits by almost 100% by retaining just 5% more of their customers.

Easier said than done, you’re thinking? … 

All You Need is a Smart Loyalty Marketing Strategy

You’re not fighting a losing battle…

whopping 84% of global consumers said they were more likely to visit a retailer who has a loyalty program.

… but, can you fit it into your marketing budget?
Loyalty marketing costs less and it yields bigger results.

It costs 7 times more to acquire a new customer than retain an existing one.
Repeat customers drive 7 times more revenue per visit as a one time buyer.

So, your marketing attention should be directed at turning new customers into loyal customers.

How do You Turn New Customers Into Loyal Customers?

Encourage them to come back.

A first-time customer has a 30% chance of becoming a long-term profitable customer.

If they visit 3 times, relatively quickly, the chance of becoming a long-term loyal customer, more than doubles to 67%.

So, how do you get them to come back again?
And then keep coming back, again, and again, and again?

2 Steps to Keep Customers Coming Back

Step 1: Great Service

Customer experience is key. If a customer leaves your store with a smile, they are more likely to come back.

  • A ‘totally satisfied customer’ contributes 2.6 times the revenue as a ‘somewhat satisfied customer’
  • 94% of customers who have a low-effort service experience will buy from that same business again
  • A dissatisfied customer will tell between 9-20people about their experience

Create a shopping experience that makes the customer feel good.
Your staff is your secret weapon!

  • Friendly and helpful staff. Your staffs top priority should be to make the customer feel happy about being in your store
  • Everything should be easy, from finding what they are looking for, to making their purchase, and everything in between
  • Keep things fast. Don’t make them wait. People are time-poor and frustration will ruin their shopping experience. But, make sure you give them enough time! They also don’t want to be hurried

Step 2: A Smart Loyalty Solution

So, your customers love your product and enjoy the service they get in-store. But, they expect to be rewarded for their loyalty. After all, the store down the road has great products and great service too.

84% of global consumers say they want to visit stores where they are part of a loyalty program.

Your loyalty program should differentiate your store and give your customers a reason to come back to you, rather than your competitors.

7 Things to Look for in a Loyalty Solution for Your Outlet

  1. Easy

A loyalty solution that is quick and easy for staff to operate at point-of-sale (POS) is essential for great customer service. You don’t want to hold up customers inputting extensive details, finding customers in the system, awarding points, etc. 

  1. Smart

A loyalty solution that gathers and analyses customer data to provide actionable insight. A loyalty program is a perfect medium to find out customer preferences and buying behaviour, that can guide marketing campaigns, VIP offers, and the general running of your store.

When it comes to sharing data, 73% of consumers are happy to have their buying behaviour monitored in return for personalized offers. And, this number is on the rise. 

  1. Personal

Customers want to feel that you care about them. Use a loyalty solution that allows you to easily use the data you collect on their preferences and buying behaviour to create rewards that are relevant to them and what they love to buy. If the rewards are relevant to the customer, they are more likely to come in again, to earn more loyalty points and redeem them. 

  1. Connecting

Your loyalty program members want to hear from you and are more likely to respond to offers, making them your most attentive audience. The rapid adoption of smartphones in the consumer market opens up a new and exciting opportunity to connect with customers on the device that’s always with them! Choose a loyalty solution that helps you connect with customers via email and mobile. 

  1. Visibility

81% of loyalty members don’t know the benefits of the loyalty program or how/when they will get rewards.

Your customers want to see the rewards they can earn! Choose a loyalty solution that goes beyond POS, to allow your members to access their account online and on their smartphones. If they can see the rewards that your loyalty program offers, they will be encouraged to come back and earn more points. But, make sure the rewards are enticing. 

  1. Social

A loyalty solution that includes social features and rewards customers for sharing your business on social media will help you grow your business.

78% of loyal customers want to spread the word about your business.

Make it easy for them. And, reward them! 

  1. Online and In-store

If you have both a brick-and-mortar and online store, make sure you choose a loyalty solution that works seamlessly between them. A loyalty program that allows customers to earn points and redeem rewards, both in-store and online, will result in a seamless customer experience and happy customers.

 

Looking for a loyalty solution that has all of the above, and more?

Check out POSmate Point of Sale Systems and Solutions.

 

5 Loyalty Marketing Pro Tips

It’s not enough to just ‘start a loyalty program’ and be done with it. The key to a successful loyalty program that will grow your business is customer engagement.

But, how do you get customers engaged with your loyalty program?

Tip 1:

Use rewards that entice and achieve your loyalty program goals

Firstly, make sure you have an enticing reward for your customers, just for signing-up. Give them a reason to give you their details. Perhaps it’s something they can use the next time they visit, encouraging them to come back.

Your loyalty rewards should be rewards that are enticing, encouraging customers to keep visiting and earning points, in order to redeem them.

To encourage your customers to keep coming back?

Create rewards at a few different points intervals to give customers something to get excited about and encourage them to come back and earn more points.

To show your loyal customers you appreciate them?

Think of something special for those really loyal customers who want to save their points up and unlock something great, like a ‘VIP night for you and three friends’, a ‘product designed especially for you’, or ‘meet the Chef and design a dinner for 2’. These top tier rewards, not only show your most loyal customers you appreciate them, the one-on-one time gives you a chance to further your relationship, and cement their loyalty to you.

To encourage customers to try new products or buy additional products?

Have a specific product in mind? Create a reward around that, e.g. ‘a free tote bag (use a low margin product) when you buy X brand’, ‘free product upgrade’, or ‘buy 2 get 1 free’.

To encourage your customers to bring their friends in?

How about a ‘2 for 1’ reward? or ‘bring a friend and get a percentage off’?

Tip 2:

Your staff are your secret weapon

Everyone working in your store is responsible for creating customer loyalty. From giving every customer a great shopping experience to promoting your loyalty program. Make sure you let everyone who works at your store know about your new loyalty program and how to operate it. If your staff are behind it, they will help you grow your database and your loyal customer base.

The key to a successful loyalty program, is getting staff to ask every customer when they make a purchase; “are you part of our loyalty program?” It’s a good idea if the staff have some reward examples they can use to entice the customer to join.

Tip 3:

Listen to what your customers want

Experiment with different rewards to find out what works for different segments of your loyalty program. Look at your data. What rewards and offers do your customers respond well to? Over time, you will find out what works for different segments. Use this insight to create rewards and offers that your customers will love, and therefore, will encourage them to keep coming back.

Tip 4:

Encourage social sharing

Your loyal customers are your biggest marketing asset! They want to share your business with their friends and family, and their friends and family want to listen. 71% of consumers say they are more likely to make a purchase based on a social media referral. Encourage members to share on social media with rewards or extra loyalty points.

Tip 5:

Make the most of your attentive audience

Your loyalty program members want to hear from you. Send them exclusive offers that encourage them to visit and redeem the offer. Use your loyalty program data to segment your customers and send them offers that are relevant and personalized. They are more likely to respond if the offer appeals to them. Every time they respond to an offer, visit and earn points, and redeem a reward, their loyalty to your store is strengthened.

 

Let POSmate Point of Sale POS Systems coupled with our loyalty rewards programs and partners show you the way how your outlet can build and create your very own fan base!

If you are interested in getting your POS System working for you and your customers with a loyalty rewards program please contact POSmate Point of Sale Systems by email at admin@posmate.com.au or call 0406 103 016 at any time.