As a research firm that focuses on market research, polls, and surveys, among others, we hope to bring insights to you through today’s article which highlights one of the strategies to create loyalty among customers.
Loyalty programs are a strategy by businesses to offer rewards, discounts, and other special incentives as a way to attract and retain customers. They are designed to encourage repeat business, offering people a reward for store/brand loyalty (hence the name). Typically, the more often a customer patronizes the merchant — and the more they spend—the greater their rewards.
Loyalty programs are most common with retailers and in Botswana shops such as Sefalana, Spar, Dischem, Clicks, Ackermans, Woolworths to mention a few, and they issue their customers with loyalty cards. Sefalana, for example, on their website boasts of more than one hundred thousand registered loyalty customers whom they confirm account for approximately 1 in every 5 sales (20%).
According to research conducted by Frederick Reichheld of Bain & Company (US), 84% of the customers interviewed stated that they were more likely to stick with a brand that offers a loyalty program and 66% of the customers said the ability to earn rewards motivated them to continue buying from the same shop. The research confirmed the statement that, “increasing customer retention rates by 5% increases profits by 25% to 95%”.
eCommerce marketers see loyalty programs as a trade-off between brands and customers – i.e. they provide something of value to the customer and in return customers release their personal information with permission to track their behaviour along the customer journey. Such insightful customer information can then be utilized to increase sales, personalize customer journeys, enhance customer satisfaction, and consequently increase sales.
There are different forms of loyalty programs that can be tailor-made for different businesses. If your business does not have one in place, this is the time to talk to your market research specialist so that you can develop one that suits your market niche.
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Loyalty Programs Increase Sales By 20% – Research
