Updated: Nov 30, 2021
Did you know that a 5% increase in customer retention can increase a company’s profitability by 75%? Or that it costs five times more to attract new customers than it does to retain an existing one? Yet, almost half of all businesses put more emphasis on acquiring new customers rather than keeping the customers they already have.
So, the question remains: What are some ways to retain my customers?
The good news is that the answer could be as straightforward as implementing a loyalty rewards program.
What is a Rewards Program?
Consumer behavior is constantly changing and evolving. Consumers tend to engage with companies where they feel appreciated, where their values align and when they receive appropriate value.
Loyalty reward programs are a great way for retailers to achieve these goals and interact directly with their consumers. These programs provide retailers insights on their customers, give them a way to directly engage with them and ultimately motivate or influence their behavior through a reward system.
Loyalty programs tend to be very specific to the retailer and their specific industry. They often have unique objectives and use varying ways to motivate customers. Retailers need to first understand what their customers will find valuable. This will help them create a program that will motivate their customers to achieve a specific business result. For example, if a retailer is trying to increase the frequency of their customer visits, they may create a loyalty program that focuses on this area similar to the way airlines reward the number of flights or miles.
The most important thing to remember, however, is that loyalty programs establish a clear value exchange between the consumer and the retailer. Consumers will readily exchange their information and sign up for loyalty programs when they see value and benefit in these programs.
What are the Benefits of Rewards Programs?
There are many benefits to implementing a loyalty rewards program starting with customer retention.
At this point, you may be wondering, “Do loyalty programs actually work?”
As we have stated, retaining customers is not only more cost-efficient than attracting new ones, but it also drives more revenue. A customer that feels appreciated and has a series of positive interactions with a retailer is more likely to not only return but return more frequently, have a higher cart value, and recommend that company to their friends and family.
It is clear that a well-executed loyalty rewards program can have a very positive impact for most retailers.
How to Implement a Loyalty Solution?
Before implementing a loyalty solution, a retailer should develop clear business objectives for the program. This will help the organization create a clear path or goal that they want to reach by implementing this solution.
Next, they must identify their target audience. This will also aid in identifying the path or goal they would like to reach. An appropriate value exchange between your program and customer must also be decided. In other words, what will incent the consumer to participate in the loyalty program and share their personal information with the retailer? After the program is established, it is important to measure the effectiveness of the program and adapt the program as needed to reach the business objectives.
Accuvia Software Group specializes in helping retailers develop, implement and operate loyalty programs using their VIA|loyalty solution.
VIA|loyalty is an advanced solution to deploy and maintain customer loyalty programs, and it is a comprehensive tool for organizations to build a strong relationship with their customers. Using this software solution, organizations can provide a convenient, personalized, relevant, and beneficial experience for their shoppers and increase their engagement. This loyalty solution software is innovative and flexible to any organization’s business model. The focus is to create a relevant customer rewards/awards program to respond to the needs of an ever-changing customer base as well as helping marketers to forecast future customer behaviors better.
To access TruRating’s full report, Mapping Loyalty in Uncertain Times
Visit us in New York at NRF 2022
Accuvia Software Group will be exhibiting at the NRF show in New York in January in Booth 6562 at the Javits Convention Center. We will be demonstrating a comprehensive solution for retailers that including our POS, Central Office and Loyalty solutions along with a number of solutions from our partners. Together we make a powerful team ready to bring the store of the future to our retail clients today.