1. Promote Repeated Purchase
More than 90% of worldwide businesses have a loyalty program. Even big brands such as Amazon, Disney, Walmart, Target, McDonald’s, Nike, Costco, and Adidas initiate brand loyalty programs. Why? Because enterprises know that more than 65% of their revenue comes from repeat purchases.
Not only do repeat buyers generate more revenue, but they also cost less to acquire.
In fact, It’s 5 to 25 times more expensive to get a new client than to retain an existing one. Customer acquisition is important. However, on a Macro scale, it is more important to invest and create retention programs to maintain your best customers versus acquiring new ones.
2. More Spending From Loyal Customers
Customers spend more on brands that they trust and have a connection with. It’s evident from consumer behavior statistics that around 57% – 60% of consumers spend more on brands for which they develop loyalty than trying an entirely new item. This is because of their level of trust or the benefits associated with reward or loyalty programs.
3. More Business Through Referrals and Word-of-Mouth Marketing
The best form of marketing is word-of-mouth marketing. This is because of its highly persuasive nature and can bring in more customers. We know that people trust their friends and family members when they recommend retailers, services, or companies. Because loyal customers believe in your company, they’re not shy about sharing their positive feedback with others. This helps you get more clients and followers through referrals.
4. Positive Reviews and Feedback
Nowadays people make buying decisions by relying on customer reviews. If you have a sound base of loyal customers, you can get more positive reviews and testimonials for your products and services which is an excellent way of marketing your business. Start by creating an automated email after a purchase that asks a customer to rate their buying, service, and product experience.
5. Support in New Initiatives and Campaigns
A loyal customer already has a relationship of trust with you. Therefore, when you introduce a new product or campaign, even for a social purpose, they are the ones most likely to support you. Start by announcing the campaign to your most valuable customers. Once again, word-of-mouth marketing begins to play an important role in reaching your goals.
6. Increased Revenue for the Business
Through repeat business, referrals, and trying new products, customer loyalty enhances brand revenue. With a steady flow of revenues, companies can extend the scope of their business and grow more.