Not sure what the best customer retention strategies are for your business?
Have you tried increasing engagement on social media, or focusing on great customer service with no results in customer retention rates?
What about customer loyalty programmes? They’re not only for the big coffee franchises! Your small or medium sized business can also utilise this kind of retention technique.
What are loyalty programs & how do I use them in my customer retention strategies?
Customer loyalty programmes are a great way to incentivize your clients to keep coming back to you. Loyalty marketing programs can win back lost customer as well as influencing the decisions of current and prospective customers. There are hundreds of loyalty program ideas and they vary as much as one business does to the next.
It doesn’t matter if you’re an e-commerce or a brick and mortar store all business can benefit from customer loyalty and see benefits from using a loyalty programs as one of their customer retention strategies.
So what exactly do we mean by ‘loyalty program’?
A customer loyalty program should definitely be part of your overarching customer retention strategy. A loyalty program is simply when businesses offer rewards to their customers who make frequent or significant purchases.
There are an unlimited numbers of perks you can offer you customers and will differ with every type of business. What can you offer your customers to incentivize them to buy from you again?
Free merchandise, exclusive discounts, special sales, advance sales and free add-ons are all options to explore in planning your customer loyalty program.
What are the benefits of loyalty programs?
An effective program can work wonders for your business and there are plenty of benefits. After implementing this into your arsenal of customer retention strategies you can expect to see: higher customer retention, regular sales even during your low seasons, increased sales and great word of mouth referrals.
Types of customer loyalty programs from Pathwwway Gamble
There are many different types of programs to experiment with and each program speaks to a different audience. It’s your job to work out which suits your business’s values and decide what will stir loyalty in your customers.
A high-end fashion boutique, for example, would rarely use a couponing loyalty strategy. The same way a discount store wouldn’t usually use membership fees.
The mark of a good loyalty program is down to knowing what inspires your customers to come back for more. Here are a few examples to get you started.
Points are perhaps the first strategy that comes to mind when you think of loyalty programs. One of the most well-known customer retention strategies, a simple points system allows customers to earn points on every purchase, customers collect points and then can redeem them in exchange for rewards.
These rewards can range from high-end to low-end and are used by many businesses around the world from supermarket chains to aviation companies.
With the range of business using points based systems also comes a range of rewards. You can equate points to everything from free products or discounts to specialized treatment & membership status.
This all encourages a customer to buy into your brand and stay loyal to reap the rewards of the cash they’ve already invested into the system.
- Membership fees for benefits
Charging a membership fee may seem counterintuitive but having a one-time or annual fee for membership is a useful retention strategy in some cases.
If you have an e-commerce your customers will usually have to pay additional fees added on top of the product, shipping and taxes add up when you shop online frequently. In this example you could use a membership fee to eliminate these costs.
A lot of customers will abandon their carts when they get to check out and notice the increase in price. Having a membership package reduces these costs for your customers and makes the process easier
- Non monetary rewards
Once you really understand your customer base you will no doubt have a real sense of which values matter to them and what is of high worth to them as a demographic.
Every business has nuances, as do your customers. Clients in one industry will find more value in reward than customers in another industry. For some non-monetary value holds more value than a gift or a discount reward.
Non- monetary rewards work well in eco, organic & ethical businesses as it aligns with those business values. Customers shopping at these sorts of companies may well prefer a sustainability promise or recycling scheme over discount based incentives.
Known as coalition program a lot of businesses create strategic partnerships with other brands to build and expand each others customer base as well as playing a role in both businesses customer retention strategies.
Who you chose to align your brand with will be defined by your industry and competitors. Partnering with another company in your industry is a great way to provide your customers services or products that you don’t provide. When you offer these partnerships, you are showing that you understand and value your customer’s needs beyond the scope of what your business can deliver.
- Make it into a game
Game-ifying your customer retention strategies can be a great way to engage your customer base and let’s face it who doesn’t love games?!
You could try running a sweepstakes contest to win a range of different value prizes, this can also help to strengthen your brand’s image through aligning your brand with another brand.
When running contests remember to try to keep the odds at 25% or higher and make the entry requirements as easy as possible, both of these points will make your games-based reward system seem fair and easily attainable.
- Tier-marketing system
Using a tier system is sometimes confused with the simpler points based system. The difference between the two is that the tier-based system is a retention method that focuses on the initial relationship.
This focus on the immediate loyalty can be shown through offering a small base gift to give your customer instant satisfaction. This encourages them to use your service or buy from you again in the future.
Pathwwway Gamble customer retention strategies that use tier-based systems are very effective because they are memorable! Giving a new or returning customer a gift on purchase really incentivizes customers to buy into your loyalty program.