Business

How to Grow Your Business with Loyalty Schemes

Brand loyalty is the surest way of growing your business. Research by the Chartered Institute of Marketing has shown that loyal customers spend 67% more than new ones, so it pays to put effort into drawing new customers in and keeping them close once you have them.

So how do you do that? For a lot of brands, this means offering a loyalty scheme. A YouGov report revealed that 77% of the British population are members of a loyalty programme, with 59% thinking that all brands should offer them.

There are lots of benefits of offering a loyalty scheme to your customers. New customers will be driven towards you by the perks they offer, while existing customers may be encouraged to increase their spend.

Studies have shown that shopping is an emotional experience, especially when it’s a product that consumers want rather than need. A loyalty scheme can enhance this experience by surprising and delighting customers with rewards, thus increasing your connection. Which makes it less important for you to compete on price with your competitors.

Loyalty schemes also enable you to build a personal relationship with your customers, which benefits both of you. It turns you from a faceless, nameless entity into something that makes your customers feel happy and with which they have a connection. Loyalty schemes also give you valuable information about your customer – their likes and dislikes among other things, which means you can better tailor your service and products to their needs and thus increase their loyalty to you.

So, which loyalty scheme is right for your business? Here are some different options to consider.

Premium programmes

Do you already offer your customers a loyalty scheme of sorts? Are you wanting to take it to the next level? Research suggests that premium loyalty programmes are growing in popularity, with 66% of US consumers currently enrolled in one. Premium loyalty programmes are popular because customers like the idea of being able to instantly access benefits, such as free next-day delivery, instead of having to spend a required amount or make a certain number of transactions. If you look at Amazon Prime, an upfront payment gives the member instant access to a whole host of benefits. Other brands like Beauty Pie ask for a small monthly subscription which allows their members to buy premium beauty products at a discounted price. What you decide to offer with will depend on your customer and your business. But giving your customer what they what they want when they want it will endear them to your brand and create stronger brand advocates in the process. Which leads us on to the next point.

Create brand advocates

These are your customers who are talking about your products or services to their friends and family and on their social media. The impact of this kind of endorsement can’t be overstated, with 92% of consumers saying they trust recommendations more than any other form of advertising.

Introducing a refer-a-friend option in your loyalty scheme allows you to tap into this benefit, while at the same time giving your customers something back. Your existing customer will get a discount for referring a friend, so will the person they refer – it’s a win-win-win.

Offer something different

The bottom line is that your loyalty scheme has to offer a benefit to the customer, but you can be innovative in how you do this. US beauty company Sephora’s Beauty Insider rewards scheme allows members to earn points according to how much they spend. But how they choose to spend those points is up to them, which can be anything from limited edition products, money off or in-store beauty tutorials. If you think about the needs and wants of your customer, you should be able to come up with something that really speaks to them. If you’re an ethical brand, for example, your rewards could give something back, like a donation to a relevant charity or cause.

Whatever scheme you decide to go with, it’s important to remember that building customer loyalty can take time, so make sure you’re committed and focus on the long-wins rather than the quick ones. But with the right strategy, you’ll eventually begin to reap the rewards.

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