Without a doubt, the future of business is digital. In today’s digital economy, having an internet platform to expand a business is not only reasonable, but it is also becoming a requirement. Loyalty programs are one of the marketing platforms which help businesses to attract and retain customers. It also provides a better customer experience on a large scale.
User retention and customer loyalty are essential for businesses that want to increase ROI, increase customer value over a lifetime, and keep growing. Without a loyal customer base, brands often waste huge chunks of time and money on customers who are not interested in interacting with them after they’ve bought something. But it can be challenging for businesses to keep customers because more than 30% of them would seriously think about switching to a competitor’s brand after just one bad experience with a brand.
Customers today want more from the companies they buy from, like personalization, targeted messages, and rewards. One of the best ways to give customers everything they want is through loyalty programs. They also help brands get helpful information that they can use to make better business decisions and marketing plans.
The concept of loyalty programs is simple
Retailers and other businesses especially B2C, run loyalty programs to attract and keep customers. These loyalty programs are meant to get customers to buy from the same store or brand again by rewarding them (as the name suggests). Loyalty programs are designed to encourage repeat business by offering customers some rewards in terms of discounts, prizes, and members-only access. For any loyalty program to succeed, customer satisfaction must be a core component.
The loyalty programs are a customer marketing strategy, and it is a great way to gather all quality customer information to know about their shopping habits and personal interests, which can be further used to personalize the experience. Customer data enables brands to make customized recommendations, inform shoppers about relevant offers and promotions, and maximize cross-sell and up-sell opportunities to improve revenue. Brands recognize that loyalty program data provides a unique insight into customers’ interests, past purchases, and engagement preferences.
A good loyalty program keeps customers engaged and maintains a high retention rate, which is vital to any business’s growth. While businesses always want a steady stream of new customers, it’s much cheaper to retain customers than to get new ones. Data is the key to building a loyalty program that will make customers love and engage with a brand.
Data-driven Loyalty program
Data is the key while building a perfect loyalty program. Data-driven solutions for customer loyalty programs include intelligent marketing tools that can be used to set up a rewards program and do much more. Today, the way to win customers’ hearts is by providing them with customization. Businesses can learn about their customers and target group by looking at them through different data types. This includes information like who you are, what you buy, and how you act. A customer’s purchasing history is a better way to see their busing patterns. For example, if a customer only orders only vegan food or food for kids or only junk food or healthy menus, this information lets restaurants or online stores determine their customers’ choices and put them into different groups based on their preferences.
In the same way, behavioural data helps businesses figure out if customers like to talk about what they want to buy on social media or post reviews and comments. It also lets them know if the customer is happy, upset, or primarily satisfied with the company or its services, such as home delivery, or if the app or website is easy to use. Once businesses have all this information, they can give their customers rewards, discounts, and more valuable offers through loyalty programs.
For example, A well-known coffee brand uses this loyalty program to market its products and features. This brand uses a loyalty program tool to individually market specific products and services based on data collected from the app about their users. Their customers can order and pay through the app before going to a physical location. They can also earn stars, which can be redeemed for free drinks, food, and other items. This makes them a clear winner because they have changed how they work with their customers and gained a lot of value from their investments in digital technologies. Besides growing the business, the actual value of the loyalty app lies in the creative ways of using large amounts of user data. This coffee brand is trying out digital menu boards in their stores to offer a menu that changes based on customer demand (which can vary by region and time of day) and, ideally, continue to boost sales at the same stores. This user data has also helped the company decide where to open new stores and how to grow.