Customer loyalty as a powerful asset in business development can help shape bigger marketing programs and deliver new revenue streams.
Feb 1, 2021 · 6 min read
Put simply, customer acquisition is the methods that are used to find new customers who are open and willing to buy your products or services. There are many ways for businesses to find more customers, but some are more financially viable than others, while some work better for different types of business (and for different types of customer, too). Customer acquisition goes beyond just finding customers and looks to build ongoing relationships with those customers too.
Some of the more common customer acquisition strategies include:
Most businesses use multiple marketing techniques for ongoing client acquisition. This is because there is no one single ‘silver bullet’ solution. While some people may enjoy reading your newsletter over a coffee, others may prefer to check out your Instagram. Some may enjoy the benefits of their customer loyalty program, while others like to tell their friends and be rewarded for it.
Of course, a large part of any marketing program comes down to budget. Not all business can afford a full page spread in the New York Times (and it would be pointless, if their business was elsewhere). This is why measuring any marketing program is so important, so that businesses can understand the cost of acquiring new customers and evaluate the methods that work best for them, within their budget.
Once businesses have acquired new customers, it is important that they consider ways to retain those customers too.
The benefits of loyalty programs as a customer acquisition tool
What is a loyalty program? Loyalty programs are a great way of both acquiring and retaining customers. They work for all kinds of businesses, from online B2B type companies, to local mom and pop stores (and everything in between).
Financially, they make a lot of sense, as they can be put together and managed very cost effectively. And of course, the added bonus is that they do not waste money on people that are not purchasing from your business.
The best loyalty programs are proven to increase revenues up to 2.5 times faster than business that do not use them, and can be used for other marketing activities too, including gaining insight into customer likes and dislikes, product or service popularity, to cross-sell new or complementary products and services or to re-engage with lapsed customers.
In fact, one third of US customers are happy to willing to exchange more information with a business that has a loyalty program than one without. And the better you know your customer, their likes and dislikes and who and where they are, the easier it is to find more customers with similar characteristics. This helps develop better leads, faster and more efficient cost of customer acquisition and new business and revenue opportunities.
Loyal customers are also more willing to spread the word about your business to their friends and family, which automatically creates free word of mouth marketing to lots of like-minded people.
Customer rewards programs can be anything from putting stamps on a physical card, to fully integrated online CRM solutions that can engage with customers both online and in-person, with added metrics, reporting and more. They do not have to be based on money off purchases, but can be used to incentivize loyal customers in a number of different ways; from free gifts to VIP event access, to deals and offers – and everything in between.
New loyalty vs. old loyalty
It isn’t the way that customers ally themselves to certain brands that has changed. It’s the way that loyalty programs are delivered, and the types of rewards that they offer that has.
Back in post-world war two times, many supermarkets and stores started offering loyalty. Even some cigarette brands did too. You could collect stamps, tokens or cards and redeem them for money off savings your next shop, or perhaps choose a free gift. It placed the onus on the customer to keep track of those stamps or tokens, or to remember to take in their card to be stamped when they shop.
Compared to today, it was a very one-dimensional experience. These days, modern customer rewards programs can be managed online, as part of a business’s wider CRM software and delivered in a modular, SaaS format. Customers can be segmented into tiers, based on how loyal they are. Bonus points events can be scheduled, on or offline. Nobody has to remember to bring an actual, physical card in to be stamped. Rewards can be customized and can be anything, including online access to a masterclass, or an in-person preview of a new product launch.
Today, both customers and businesses have much greater choice in who they are loyal to and which sort of behaviours to reward. Thanks to instant access to real-time data through loyalty rewards software, companies are able to tailor offers and incentives to align with wider business goals, the current economic climate and to gain competitive advantage. They can use the data from their most loyal customers to understand buyer behaviour and profile customer types, to easily identify prospects who share the same characteristics.
Loyalty marketing data can also be used to help shape advertising campaigns, new product launches and more, while the best customers can be incentivized to spread the word, by recommending a friend; and all it takes to join that loyalty club is a simple click of a button. This makes loyalty as an acquisition tool one of the most flexible and insightful marketing activities any business can do.
It’s a new world of customer loyalty, but it’s a good one
If you feel it’s time to learn more about what customer loyalty can do for your business, or if you’re ready to upgrade your current loyalty scheme, first, think about what you want to be able to do with your system.
· How easy will it be to migrate my data to a new loyalty program?
· What metrics do I want to capture?
· What sort of things do I want to reward?
· What rewards can/will I offer?
Once you know the answer to these questions, you can start to evaluate the best loyalty program for your business. Ideally, look for a solution that offers a free trial, with easy data migration, so you can rapidly begin to see what a great loyalty program can do.
Does the system integrate with your existing tools and software? Does it give you the reporting that you need? Is it easy to use and exciting enough to entice your customers? Does it have the potential to grow with your business and offer other, new marketing tools that can help you grow your business? What support is available from the company offering the solution? How much is it going to cost?
Some customer loyalty tools, like Retention Force’s Rewards Program offer a free trial and support during setup, that makes it quick and easy to test and experiment with. Their 24/7 support and modular pricing makes it a cost-effective loyalty rewards program, even for small businesses. The choices are out there, just waiting to be explored. And in today’s economy, if you aren’t ready to reward customer loyalty, you can be pretty sure your competitors will be.
Co-Founder/Customer Happiness Manager at RetentionForce