As our previous articles mentioned, an effective customer loyalty program is a powerful business strategy. It has the potential to increase a business’s revenue and profitability drastically. This is because getting repeat customers is much cheaper than acquiring new ones. Plus, loyal customers tend to bring in more customers, which reduces your need for advertising.
Since customer loyalty programs are a crucial component of a business’s success strategy, having the right tools to implement loyalty campaigns is necessary for companies that want to grow.
So for today’s article, we’re looking at the 5 benefits of having customer loyalty software for small & medium businesses.
Reason #1 Better productivity
Getting reliable loyalty management software for your business removes a lot of cumbersome processes. This is because most of the tools you need – from data management to automated campaign implementation will be available on one hub. This eliminates the need for multiple programs, documents, and systems!
With the newfound free time your team gets from this upgrade, they can focus on more essential tasks to grow the business. Initiatives like new marketing ideas, product innovation, and brand building.
Aside from improving their productivity, they’ll also be less stressed since there are menial functions that can be automated. This boosts the morale of your people. Making your company an excellent place to work.
Increasing Purchase Value
Another common strategy brands use to get more from their existing customers is increasing purchase value (getting them to buy a higher-valued item). Increasing a customer’s purchase value can be an excellent long-term play, mainly if they stick with the higher-priced item, even without your prompts.
This strategy can be implemented primarily on quick-service restaurants when the cashier asks, “would you like to upsize that.” Moreover, another subtle strategy companies use is the anchoring technique. This is when they present you with three options – Small, Medium, and Large – with the Large always being more bang-for-your-buck than the Medium one. So, you end up getting the Large option.
This is also where upselling comes in. Upselling is when brands ask you if you want an upgrade on your purchase. For instance, you’re buying the latest iPhone 14 ProMax 256GB, and the product specialist asks if you’ll get the 512GB instead to store more photos.
Increasing Basket Size
Increasing a basket size is when you encourage customers to get more products than they intended. You can see this often on e-commerce sites when they offer products that go well with what you’re buying. Or they’re suggesting products that are “frequently bought together” with what you’re buying. Traditionally, this is when cashiers at fast food restaurants ask if “you’d want some fries with that.” Or if you want to take home another order.
These strategies are usually called cross-selling. If upselling is upgrading a current product, cross-selling, on the other hand, is when you offer related products to make the purchase “better” for the consumer.
Going back to the smartphone example. Aside from upselling you with a higher memory, the product specialist might also offer you accessories like Bluetooth headphones, wireless chargers, and protective accessories for your gadget.
Increasing Customer Advocacy
The last strategy businesses use to earn more from their existing customers is to turn them into brand advocates who share the brand with friends and family.
Brands do this through gift cards, gift packages, or bundle promos for their customers.
Usually, you’ll see brands come up with special promos/bundles during hallmark events like Valentine’s Day, Father’s Day, Mother’s Day, and other celebrations. This is to encourage their existing customers to buy their products, not for them, but for those around them who might become customers too.
Another typical example is when restaurants do group meal deals, so you’ll bring your friends and family over for a meal.
Finding the Right Strategy for Your Brand
None of the strategies above are a one-size fits all approach. These are just guides and springboards for new ideas. Ultimately, what you need to do to find the right strategy is to listen to your customers and understand what they want.
Consumer behavior, preferences, and desires are reliable indicators of what strategies your brand needs to implement.
Ultimately, these strategies can be effective if you pair them with an enticing customer loyalty program because it increases customers’ likelihood of buying.
