Building Trust, Boosting Sales
Why Customer Loyalty Programs are the Key to Long-Term Growth
Key Takeaways
→ Customer Loyalty programs are essential for building strong customer relationships.
They encourage repeat business, increase spending and referrals. Customers associate high-quality loyalty programs with better value and enhanced customer experiences, fostering brand loyalty.
→ The type of loyalty program you choose depends on your business’s unique needs.
Some programs work better for certain businesses than others.
→ Loyalty programs can provide valuable customer insights and drive business growth.
By analyzing customer data, you can tailor your offerings and marketing strategies to meet their specific needs.
85% of customers say loyalty programs make them more likely to continue to shop with brands.
What is Customer Loyalty?
Customer loyalty is more than just repeat business. It is a deep-rooted emotional connection between a customer and a brand. Think about the hairdresser who has been cutting your hair for years, or plumber who requires little direction and knows all the quirks of your house. These genuine, long-term relationships are one of the biggest drives for a successful business. When customers feel valued and appreciated on an emotional level, they are more likely to become loyal advocates for your brand.
As business relationships evolve, they become less transactional, and an unspoken commitment often emerges between the two parties. Whether forged through overwhelming positive experiences with customer service or product excellence, customer trust and loyalty are the result. These customers become invaluable assets, continuing to spend, referring friends, and being more receptive to upselling because of their earned trust. Returning customers are one of the most important and powerful segments to consider. So, how can you further cement these relationships and how can your payment provider help?
The answer: loyalty programs. There is a good chance you are already participating in several loyalty programs, and for good reason. As a customer, you benefit from exclusive deals and rewards while businesses incentivize repeat purchases. From restaurants and car washes to retail stores and gas stations, loyalty programs are everywhere. And no business is too small to implement a loyalty program. By investing in loyalty programs, you foster those few personal relationships, building a stronger brand foundation and fueling future growth.
Importance
The purchasing power of loyal customers is undeniable. Beyond their direct revenue contribution, they are responsible for attracting new traffic towards your business through word-of-mouth marketing. People naturally trust their peers, and a staggering 79% of customers are more likely to recommend brands with effective loyalty programs. Satisfied customers become brand advocates, sharing their enthusiasm with their friends, family, and colleagues.
Businesses achieve customer loyalty through a variety of ways. Some cultivate loyalty organically, while other implement strategic initiatives like having rewards programs and subscriptions. Customer retention and loyalty has proven to be more important than ever, especially in competitive markets and challenging economic climates. Prioritizing the development of a loyal customer base and increasing customer lifetime value yields significant benefits. Research shows people are willing to pay more for goods and services when using a high-quality loyalty program because they believe the business is providing them with better value and an enhanced customer experience. In fact, 85% of customers say loyalty programs make them more likely to continue to shop with brands. Given the widespread use of loyalty programs, it’s clear that having one is essential for sustaining competitive advantage. Businesses of all sizes can leverage loyalty programs to stay on the map in any market.
79% of customers are more likely to recommend brands with effective loyalty programs.
Types of Loyalty Programs
Loyalty programs are designed to secure repeat business by rewarding customers for their purchases. The more customers buy, the more rewards they earn. In the eyes of the buyer, they are getting deals on their products or services. From a business perspective, loyalty programs ensure steady revenue streams. There are several types of loyalty programs, and selecting the right one is vital for your business to see the growth and success they can bring.
Declining Balance
In declining balance payment systems, customers load money onto a card or account, and as they make purchases, their balance decreases until all the money is gone. While declining balance cards have traditionally been used for meal plans in educational settings, their applications have expanded significantly. Today, campuses and businesses of all types are leveraging the advantages of declining balance accounts. Requiring upfront payment provides businesses with immediate cash flow and prompts customer commitment to future spending. Customers get the convenience of loading funds online and businesses can add custom offers and bonus credit, making them highly versatile tools for a wide range of businesses. Psst…Apriva supports Declining Balance rewards!
Point-Based Programs
Point-based loyalty programs are one of the most common types. Customers earn points through various activities, such as making purchases, submitting reviews, referring friends, engaging with your business on social media, or subscribing to emails and SMS text marketing channels. Users can redeem their points for free or discounted items and services.
Tier-Based Programs
In tier-based programs, customers are assigned different ranks and given their own set of benefits. Generally, the higher the rank, the more exclusive perks and rewards. Customers are motivated to spend more so they can move up the hierarchy and join the more elite and exclusive ranks.
Subscription, Paid, or Fee-Based Programs
Referral Programs
Customers are 50% more likely to purchase from a company with a previous positive experience.
Key Benefits
Increased Customer Retention
A loyalty program incentivizes repeat purchases, encouraging customers to stick with your business rather than switching to competitors.
Higher Customer Lifetime Value (CLV)
Loyal customers tend to spend more over time. By offering rewards or points for purchases, SMBs can boost CLV by encouraging more frequent or larger transactions.
Improved Customer Engagement
Loyalty programs provide ongoing touchpoints with customers, enabling SMBs to communicate more frequently and build stronger relationships through personalized rewards or promotions.
Data Collection and Insights
Competitive Edge
Cost-Effective Marketing
Brand Advocacy
How Apriva Can Help
Apriva can help deliver loyalty rewards customized to your business and tailored for high-valued customers. These loyalty programs deliver marketing, reward and redemption management solutions, and the ability to target specific customers with offers.
Businesses can customize a loyalty program specific to their customers’ needs—utilizing Merchant Studio and in-app card-on-file payments to increase average customer expenditures. Within Merchant Studio, you can manage customer or business lists, recurring billing (subscriptions), and transaction data.
Harnessing customer insights is invaluable for making data-driven decisions and targeting specific segments of your customer base. Whether you are just starting your loyalty program journey or looking to expand your existing efforts as an Apriva customer, our team is equipped to help you in finding the ideal solutions. Contract us today to learn more!
