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Customer retention sometimes seems like a big deal about nothing, especially if you have a steady flow of new shoppers trying your brand. In reality, gaining a new customer is five times more expensive than keeping an existing one. That’s why businesses constantly hunt for effective customer retention incentives. One of the best marketing tactics is a loyalty program.
A loyalty program gives your customers multiple ways to save or earn future business with you. For example, airlines allow passengers to earn miles and potentially fly for free (or redeem other rewards), thus motivating repeat bookings with the airline. Other incentives like secret coupons and special deals are great too. They don’t cost much for your business, but they’ll make your customers feel valued and exclusive.
Loyalty programs are developing new platforms as the retail scene integrates with technology. Membership cards and paper coupons still work, of course, but technology can make the process easier and more convenient for everyone. Applications can drive in-store sales by offering special deals to returning customers. Going digital eliminates the cost of printing and mailing your offers. It can seem like a big deal (time and money) to develop an application, but your shoppers will appreciate the ease of use and modern feel.
A good loyalty program can go a long way in generating sales. A mere 5% increase in customer retention yields a whopping 75% boost in profitability. A loyalty program isn’t just for your current customers either. Providing rewards leads to free word-of-mouth advertising. People are more likely to trust a personal recommendation than an advertisement or online customer review.
People love loyalty programs. Rewarding faithful customers is relatively easy and can give you incredible ROI to keep you ahead of the competition.
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