Too many businesses are busy finding solutions to lowering costs and they often overlook that building close relationships with customers through a loyalty program is one of the most economical ways to keep costs down. So, how does keeping customers convert into financial gains?
Think about how much it costs to keep an existing customer happy compared to how much it costs to bring in a new one. Advertising and marketing are costly investments that may add up quickly when trying to bring in new customers. The average cost of acquiring a new customer is five times more than keeping an existing customer. And that speaks volumes.
If ever you’re eyeing to create a loyalty program for your business, here are some benefits you would get that you can think about as you weigh all your choices:
1. Increased Customer Retention
Loyalty programs are an efficient method of increasing customer retention, which is a key aspect of any company’s overall success. Businesses can encourage customers to continue purchasing from them by providing such incentives, hence raising customer retention rates. In fact, according to an Accenture survey, loyalty program members in the Philippines spend 12% more on each transaction and 27% more annually than non-members. This increased spending translates into better revenue for firms.
2. Enhanced Customer Engagement
Loyalty programs also help businesses to engage with their customers in a more personalized and meaningful way. By collecting customer data such as purchase history, preferences, and demographics, businesses can create tailored marketing campaigns and promotions that resonate with their customers. For instance, a study by Colloquy found that 54% of Filipinos want personalized offers and recommendations from loyalty programs. By providing such personalized experiences, businesses can build stronger relationships with their customers and increase customer loyalty.
3. Improved Brand Loyalty
Loyalty programs not only improve customer loyalty but also foster brand loyalty. Customers who have high regard for a brand are more inclined to share and promote the brand to others, resulting in more customers and increased revenue. Additionally, it was also stated from a study by The Loyalty Report that 79% of Filipinos would promote and recommend a brand to others if their experience with regards to the company’s loyalty programs are good. By providing a positive and rewarding loyalty program experience, businesses can enhance brand loyalty and gain new customers through word-of-mouth marketing.
4. Increased Customer Lifetime Value
Lastly, loyalty programs can increase the lifetime value of customers for businesses. By encouraging customers to make repeat purchases and spend more, businesses can increase the revenue generated from each customer over their lifetime. According to a study by Bond Brand Loyalty, loyalty program members in the Philippines have a higher customer lifetime value, spending an average of 39% more than non-members. This increased spending over the customer’s lifetime translates to higher revenue for businesses.
We can see that Loyalty programs have proven to be successful for businesses in the Philippines – it’s even backed up by multiple studies that indicate how creating one could result in an increase in customer retention, engagement, brand loyalty, and customer lifetime value. So what’s there to think about? Start and take advantage of this marketing strategy before it’s too late! Start your loyalty program with ZAP– the No. 1 Loyalty Program Provider in the Philippines.
