Importance of Rewards and Loyalty Programs for Ecommerce Marketers
Rewarding loyal customers is nothing new. Such programs have been informally in use forever, particularly beginning to proliferate in the 1960’s with airline rewards and the mass adoption of credit cards. Why? Because, as business management started to become more scientific and data driven, executives began to understand the true cost/benefit of loyal customers.
Today, we know that it costs 5% to 10% more to acquire a new customer than it does to sell to an existing one. Furthermore, current customers spend 67% more than new customers. As a result, currently businesses have enrolled U.S. consumers into 3.3 billion memberships in customer loyalty programs, and that number increases every year. Clearly, these programs are beneficial. According to a recent study from Experian, 75% of U.S. companies’ loyalty programs generate a return on investment.
Offering rewards and loyalty programs is, therefore, something every marketer needs to think about. This is particularly true for eCommerce merchants, whose customers can shop different stores simultaneously. So, what other benefits do loyalty programs offer?
5 Essential Benefits Rewards and Loyalty Programs Offer
1. Better Customer Data
Given that eCommerce marketing results can be dramatically improved with deeper shopper data, it’s worth pointing out that loyalty programs are a great way to get consumers to provide personal data to a company. Programs also offer a reason to survey your shoppers, asking what they like and dislike about your product/brand, which enables you to keep abreast of their interests.
2. Steady Flow of Revenue
Programs can help build a steady flow of revenue because customers enrolled in loyalty programs frequently come back to your store, bringing in a constant stream of sales. According to Capgemini, “Fully engaged” customers deliver 23% greater than average share of wallet, profitability and revenue.
3. Create Brand Ambassadors
Rewards and Loyalty programs can also help you create Brand Ambassadors. Brand loyalty creates free marketing because customers who love a product are usually very eager to tell others about it. Include these loyal customers in new campaigns you’re rolling out.
4. Increase Customer Retention
Loyalty programs increase customer retention, which can deliver big benefits to the bottom line. 38% of marketers say their biggest challenge is improving customer acquisition and retention. According to HubSpot, a 5% increase in customer retention can lead to a 25% to 100% increase in profitability.
5. Increased Brand Awareness
You can also use your loyalty programs jointly with other businesses to increase brand awareness. Find a business with a common goal to yours, and support each other by sharing your most loyal customers. For instance, if you sell basketball gear, try having some local courts let you advertise or let you sponsor their buildings. Create buzz around your brand and offer deals to other businesses that are aligned with what you sell.
The Cue Effect
Cue’s tools make it possible for you to gain more information and insight about your customers, enabling to better engage them. With deeper demographic and psychographic data you can custom tailor your loyalty programs to achieve best results. With Cue, you have a full scope of who your customers are and what they are interested in.
Cue’s social icons provide an easy-to-use sharing function for social media and email, enabling you to know what your shoppers are saying about your brand and products. Cue’s engagement incentives multiply this benefit by giving those shoppers a reason to share by offering discounts for sharing.
If you don’t have a loyalty and rewards program, maybe now is the time to create one. They are effective marketing tools, increase growth, customer retention, and brand recognition. Don’t miss out on one of the best tools available to increase your bottom line, because there are no better or more predictable customers than repeat customers.
If you do have a loyalty and rewards program, please share what worked and didn’t work in our comment section.