What must be the ultimate goal of a customer rewards program? To those mulling experimenting with customer loyalty, this might seem like a serious predicament: should the program aim to become the largest customer loyalty in the industry or enhance repeat buying in a small group of loyal customers? Like most successful businesses, the objective of the program will evolve with time, and eventually accommodate both these concerns deftly. Before we go into further detail, let’s take a look at the concept of customer acquisition and retention in Customer Loyalty Programs:
Customer Retention
The other half of the puzzle is retaining the customers that you have and designing reward offers, schemes, and discounts that appeal to them. Formulating customer retention strategies requires an extensive study of prevailing market conditions and understanding what sort of offers customers find the most valuable and relevant. Similarly, a comprehensive analysis of existing customers needs to be undertaken in order to understand their expectations, choices, and shopping habits. With this information, you can design policies, offers, and discounts that not only appeal to loyal customers but also drive up business growth and revenues. Ideally, this focus needs to strengthen with time, as a large number of customers in the loyalty program will provide richer insights on their tastes and preferences, which will help in designing relevant rewards for them.
Identify bestsellers to upgrade them
Attracting new customers and expanding the market share is one of the basic objectives of a loyalty program. This is particularly true for new businesses, or smaller businesses that are operating in a highly competitive industry with big players. Customer Loyalty Programs are great to attract new customers and convert one-time customers into recurring ones. Naturally then, the immediate launch of a loyalty program should follow an intensive focus on acquiring as many new customers as possible. This initial period is usually marked by attractively high discounts, huge joining bonuses, and a wide range of freebies. These offers are also more likely to be promoted to in-store customers aggressively, in order to answer customer queries and allow for instant registration.
Expanding the Scope
As explained, in the initial period, the focus will, invariably, be on acquiring new customers and ensuring a healthy sign-up rate. However, once certain milestones have been met – for instance registering 5,000 customers – businesses will need to expand the scope of the program to cater to existing customers as well. This includes, but is not limited to, offering personalised rewards, educating customers on active offers and discounts, aggressively promoting seasonal sales, and collecting customer feedback regarding their experience. Furthermore, businesses will also have to train their staff accordingly in order to provide an impeccable service to existing loyalty members.
Striking a Balance
As the business and the loyalty program grow, it is important to strike a balance between acquiring and retaining customers. Depending on the nature or pace of growth, you could focus equally on both these aspects, or settle for a 40-60 or 30-70 ratio. On the other hand, you could distribute your efforts according to the events calendar and focus on getting existing customers during the holidays, whereas drive sign-ups from new customers for the rest of the year. At the end of the day, business owners and managers need to take a call on what is the objective of their customer rewards program, and what they intend to achieve.
To quickly recap, different Customer Loyalty Programs need to focus on getting new customers and/or retaining them, depending on the maturity they have achieved and the networks they have created. Naturally, it makes business sense to induct a healthy number of customers into the program and then work towards building their loyalty to the brand using special offers and schemes. However, there are no hard and fast rules; businesses that already have a dedicated customer base might want to focus exclusively on retention, whereas a new business would want to reach as many new customers as possible. In all these scenarios, what can make all the difference is a state-of-the-art customer loyalty software solution, like Loyera, that can help businesses in customer acquisition, retention, and business growth. To learn more about the benefits of a rewards program for your business and whether you should focus on customer acquisition or retention, get in touch with us today.