The benefits of loyalty programs go beyond encouraging repeat purchases. They’re powerful tools to strengthen customer relationships, boost your bottom line, and set you apart from competitors. This is exactly what we’ll dive into today.
In a comprehensive guide, we’ll tackle the top advantages of running a loyalty program. What’s more, we’ll show you how you can amplify these benefits with coupon marketing!
Let’s get right into it.
What Are Customer Loyalty Programs?
Loyalty programs are strategic marketing incentives designed to keep customers from shopping with your business. The programs reward customers for repeated purchases or engagement with your store, giving them a reason to keep coming back.
There are many different types of loyalty programs. One of the most common models is the points-based loyalty system, where customers gain “points” for each purchase or action (such as leaving reviews or referring friends). These points can then be redeemed for rewards like discounts, freebies, or store credits.
Another popular model is the tier-based system, where exclusive perks are unlocked the higher they progress in their ranking based on their spending levels.
Regardless of the model you choose–the ultimate goal is the same: to strengthen customer relationships and motivate them to keep choosing your store. In turn, your business enjoys repeat purchases, a stronger customer base, and sustainable growth.
10 Benefits Of Loyalty Programs
There are many potential upsides of customer loyalty programs – both financial and non-financial.
It is critical for small businesses to have a high customer retention rate because it allows your venture to expand with a lower risk margin.
Think of it this way: because a reliable customer retention program gives you a stable foundation in terms of income, you may now focus on customer acquisition at your own pace.
Here are a few more advantages to loyalty programs for your business:
1. Customer loyalty is rewarded
About 56% of customers stay loyal to brands that “get them.”
The Wise Marketer
Rewards are a terrific way to make your customers feel valued and encourage repeat purchases.
Customers will also feel understood if you give discounts, promotions, and other special deals for supporting you since they get to save bucks.
2. Slow seasons are steadily reduced
Whether we like it or not, there may be sluggish seasons that can hurt your profitability big time.
A loyalty program may help you boost traffic and sales during these slower seasons by providing customers an incentive to spend.
3. You get to build your mailing lists (and even segment them!)
Email communication is an important marketing strategy to nurture customers and efficiently keep brands salient to them.
Today, nearly 80% of firms still rely on email marketing to keep their customer retention rates high. Likewise, marketers use loyalty programs to gather contact information into mailing lists. Take Sephora’s Beauty Insider for example:
4. Customer loyalty programs help drive more sales
Of course, one of the main reasons for establishing a loyalty program is to ensure a continual flow of income into your enterprise.
Customers may feel more tempted to buy from your business if you frequently provide them with rewards, promotions, and special deals.
As a result, the probability of selling to an existing customer is 60–70%!
5. You learn more about your customers
If you want to sell more, you need to know your customers inside and out. Knowing your customers’ purchasing and spending patterns is a great start.
Loyalty programs make it easy to track your customers’ purchase habits and develop effective marketing strategies and incentives. Asking clients to enter information like their addresses and birthdays, for example, can help determine which areas and ages to target.
6. More shopping is incentivized
Customers are typically encouraged to spend more money by brands using multiple tiers for their reward members.
The idea is that if you shop more, you’ll be able to save more money. For example, customers can access additional rewards and bonuses when they reach a particular monetary threshold.
7. Increase traffic and attract new customers
While owners often design loyalty programs for existing customers, they can also use them to identify and attract new ones. People may also wish to take advantage of your bargains if they learn about your excellent rewards.
They’re also amazing marketing tools to create a buzz and increase your store’s visibility on social media. Featuring your loyalty program benefits in your marketing promotions, social ads, and website banners can pique interest, encouraging new customers to check out your offers.
Well-established loyalty programs can also enhance your SEO (search engine optimization) efforts by generating more branded searches. In turn, this leads to higher traffic and better online visibility, which increases your chances of attracting new customers.
8. Build a competitive advantage
Let’s face it–it’s really challenging to stand out in today’s saturated market. According to industry statistics, there are currently over 26 million e-commerce stores around the globe! Depending on your niche, customers have countless options at their fingertips, making it crucial to differentiate your brand.
Having a well-designed loyalty program is one of the most powerful ways to appeal to customers. By providing customers with enticing rewards and incentives, you create a compelling reason for them to choose your store over competitors. A study by McKinsey, for instance, found that loyalty program members are 59% more likely to choose the brand they’re part of over competitors.
Simply put–customers are more likely to stick with your brand if they feel rewarded and valued, and loyalty programs help you do just that.
9. Provides opportunities to cross-sell and upsell
One of the key benefits of loyalty programs is that they create “natural” opportunities for cross-selling and upselling. Loyalty programs encourage repeat purchases in your store. In the process, you understand more about your customers’ shopping preferences. As a result, you can better recommend products or upgrades that align with their unique needs.
When customers unlock a new tier or accumulate points, you can offer them exclusive deals on complementary products based on their past purchase history. This adds more value to their purchases while boosting your business’ overall sales. It’s a win-win for you and your shoppers.
10. Create brand advocates and encourage word-of-mouth marketing
Aside from encouraging customers to keep coming back, loyalty programs also transform satisfied shoppers into brand advocates. In fact, according to industry insights, over 70% of customers are more likely to recommend a business with a robust loyalty program.
This word-of-mouth marketing is one of the most effective and powerful ways to expand your business’ reach. 92% of customers trust the recommendations of friends and family above all when making a purchase.
You can further leverage this benefit by incorporating referral incentives into your loyalty program. For instance, you can offer customers bonus loyalty points, exclusive discounts, or even gift cards for referring new shoppers to your store.
How To Launch A Loyalty Program In WooCommerce
Now that we’ve understood the key benefits of loyalty programs, you’re probably eager to make your strategy come to life. Fortunately, e-commerce store owners can leverage a plethora of tools to make this process easier.
WooCommerce store owners, for instance, can leverage Advanced Coupons’ Loyalty Program Plugin. This powerful plugin allows you to launch and set up a loyalty program in less than 5 minutes!
With this plugin, you can reward customers for repeat purchases and actions like leaving reviews, setting up an account, and more. It also gives you access to a full admin dashboard to help you manage your loyalty program with ease.
Interested to learn more? Check out our exclusive resources below:
- How To Start A WooCommerce Loyalty Program (Tutorial)
- What Type Of Loyalty Program Is Right For Your Online Store?
5 Ways To Use Coupons To Boost Your Loyalty Program
Retention often proves a more effective way to grow a business—and customer loyalty is a big part of it. Today, one of the most common methods to get this done is coupon marketing.
Coupons, when used effectively, can increase sales in a short amount of time, improve the shopping experience for customers, and provide for direct tracking of a marketing campaign’s ROI.
It can also be used to boost customer loyalty, contrary to what traditional marketers believe.
Many marketers, though, face challenges because coupons and freebies aren’t the same as they were when our parents tore them from the Sunday newspaper. It can get more complicated than that.
Here are a few ways to help you set up a successful coupon campaign:
1. Make use of a range of coupon platforms
About 40% of buyers search for digital coupons before going shopping, while 51% seek paper coupons.
Forbes
Lucky for you, you can now use both traditional and digital platforms to expand your reach when it comes to coupon marketing.
There are several platforms where you may launch, promote, and publish your promotions to appeal to your customers; explore your opportunities, figure out what converts best, and be creative.
2. Use limited-time incentives to capture curiosity and create a sense of urgency.
Customers don’t want to lose out on an excellent opportunity to buy anything they desire at a reasonable price. This is why introducing limited-time deals and creating a sense of urgency in your customers’ minds will help you gain more sales sooner.
In addition, limited-time offers can also spark conversation on social media, enhancing brand awareness and allowing you to reach a wider audience.
3. Create eye-catching coupons that match your brand
Presentation matters. Creating a unique and visually appealing design for your coupons (that matches your branding) is one way to make your business stand out and gain a competitive edge while keeping your business familiar with the market.
While it’s true that the content should be the most essential and well-considered part of your coupon, having an attractive presentation can turn things in your favor.
4. Use technology’s versatility to your advantage
Making coupons accessible, visible, and redeemable is one thing. But taking your coupon game to the next level with the help of modern technology is another.
There are several tools and resources online that leverage your marketing. For example, you can try Advanced Coupons’ WooCommerce Loyalty Program plugin:
Making coupons accessible, visible, and redeemable is one thing. But taking your coupon game to the next level with the help of modern technology is another.
There are several tools and resources online that leverage your marketing. WooCommerce store owners, for example, can use plugins like Advanced Coupons to extend the platform’s default coupon functionality.
With this plugin, you can offer advanced BOGO deals, shipping discounts, scheduled coupons, and so much more.It also allows you to set advanced cart conditions, ensuring that coupons only activate when customers meet your set requirements.
5. Offer personalized rewards and experiences in customer loyalty programs
Consumers love to feel loved.
They deserve special treatment and recognition for their brand loyalty.
There are a lot of ways to offer personalized rewards. For example, you can celebrate personal milestones like birthdays, anniversaries, or even the date of their first purchase.
Frequently Asked Questions
What are the benefits of customer loyalty programs?
Loyalty programs offer several key advantages for businesses–they increase customer retention, encourage repeat purchases, and help build a better brand image. All of these advantages contributes to better sales and a more steady revenue stream. They also offer key insights into customer buying behavior, helping store owners to tailor their marketing and product recommendations to their unique needs.
What are the benefits of loyalty programs to customers?
Loyalty programs give shoppers access to discounts, exclusive perks, and rewards that make the shopping experience more satisfying and enjoyable. These programs enhance the purchase experience, helping them save money and get better value for their purchases. It also creates a sense of appreciation and belonging within the brand’s community, fostering stronger emotional connections between the customer and the business.
How are loyalty programs effective?
Simply put–they provide customers with clear incentives and perks that encourage them to keep coming back. By offering discounts, points, and other exclusive offers, these programs enhance the overall shopping experience and improve the perceived value of engaging with your brand. As a result, customers are more inclined to keep choosing you over competitors.
Why is customer loyalty important?
Customer loyalty is crucial for the sustainability and long-term success of every business. Loyal customers are more likely to spend more, become brand advocates, and choose you over competitors. Having a loyal customer base also reduces the need for costly customer acquisition. According to industry insights, acquiring new customers can cost up to seven times more than retaining existing ones.
Conclusion
If you’re still unsure, think of loyalty programs as holding your ground and building upon it. If you have an excellent repeat incentive, you don’t need to fill the hole left by prior customers; instead, you can recruit new customers from there.
To help you get started with your own loyalty program, we outlined some of the benefits of loyalty programs in this article:
- Customer loyalty is rewarded
- Slow seasons are steadily reduced
- You get to build your mailing lists (and even segment them!)
- Customer loyalty programs help drive more sales
- You learn more about your customers
- More shopping is incentivized
- Increase traffic and attract new customers
- Build a competitive advantage
- Provides opportunities to cross-sell and upsell
- Create brand advocates and encourage word-of-mouth marketing
When it’s time to launch your loyalty program, you can use plugins like WooCommerce Loyalty Program to make the process a breeze! With this plugin, you can easily set up a WooCommerce loyalty program and reward customers for shopping and engaging with your business.
As a bonus, we walked you through the 5 ways you can use coupon marketing using Advanced Coupons.
- Make use of a range of coupon platforms
- Use limited-time incentives to capture curiosity and create a sense of urgency
- Create eye-catching coupons that match your brand
- Use technology’s versatility to your advantage
- Offer personalized rewards and experiences in customer loyalty programs
We hope this guide helped you out! Do you have any questions about loyalty programs? Let us know in the comments!
