Loyalty program as a way to maintain customer loyalty

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Any business strives to retain the consumer , not to lose his interest in itself, to inspire trust. That is why there is such a thing as a loyalty program. It is adopted everywhere - from local shops to large transnational companies.

Loyalty program: what are the features
A system of incentives in the form of discounts, bonuses or gifts, which is designed for regular customers - this is a loyalty program . The goal is to prevent the consumer from leaving, to build long-term relationships with him, which would ultimately bring benefits to both parties.

In the eyes of the consumer, a store that uses such measures is more attractive than one that has not bothered to interest him in any way.

Loyalty program: what are the features

What types of programs exist?
Discount. This loyalty program consists of a fixed armenia email lis discount on goods and services. It is designed for a client who has a card. Both local stores and retail chains use this approach.
Cumulative (bonus). They record the history of purchases, and for each of them they accrue a bonus or point. Having collected a certain amount, they can be spent on a purchase or exchanged for a gift. Or they can receive, without spending points, for example, the fifth cup of coffee for free. The program motivates the consumer not to delay the purchase.
Cashback. This is a return of part of the funds spent on a purchase: transferring money to a card or transferring bonuses to a virtual card. Banks most often use this mechanism to increase loyalty.
Club membership. Having collected a certain number of points and having increased in status, the client receives privileges. These are pre-sales, tastings, exclusive goods. Hotels, sellers of branded items, car dealerships use this approach most often.
Charity. Business and consumers unite around a common cause – helping those in need. And if the client learns that a percentage of the purchase goes to charity, he is happy to participate.
How will such a set of measures help business?
Attracting a new customer is 5-10 times more expensive than retaining an existing one. And regular customers spend 67% more on purchases than casual or new ones. So all these measures make sense.

A well-thought-out loyalty system brings its fruits. And first of all, it is the retention of customers who provide the store with the main profit, as well as motivating them to spend more. In addition, followers can be involved in testing products and offers. The benefits will not only be in the form of an increase in the loyalty index (NPS) and the lifetime value of the customer (LTV). Customers also become brand advocates - they recommend it, thereby attracting consumers. And judging by the figures above, the benefit is also in saving costs on attracting new customers.

How will such a set of measures help business?

How to know if the program worked
To evaluate the results of the activities that loyalty marketing involved, one of three methods of effectiveness analysis is used.

In the first case, they analyze how much the consumer spent before and after participating in the program. In the second, they compare profits before and after the program’s implementation. The third helps analyze the outflow of participants and regular customers.

What does the consumer want to receive?
Increased customer loyalty is created not only by tangible benefits for them in the form of savings, gifts, exclusive offers. Customers are looking for satisfaction of needs by purchasing a particular product. It is important to understand why the product is relevant for them now. Based on this, loyalty programs are formed.

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