It is a
well-known tenet of the business world that it costs more money to acquire new
customers than it does to maintain existing customers. Any company that hopes
to grow their business steadily into the future would do well to ponder this
fact for a moment, and analyze how it applies to their current operations and
marketing strategies. If your marketing department is not actively focused on
building and growing relationships with your prospects and customers, you might
benefit from implementing a loyalty reward program in your business.
According
to recent surveys, three out of four American consumers hold at least one
loyalty card to a business that they frequent. This data indicates that
customers are eager to get a deal on goods and services, even if it means
making bigger and more frequent purchases. Even though the customer spends more
money, the fact that they are being rewarded for their purchase makes them feel
better about it, and helps reduce buyer’s remorse.
In turn,
this makes customers much more likely to make future purchases or recommend
your products or services to their friends, family and colleagues. According to
Fred Reichheld in his book, “The Ultimate Question”, this is exactly what
businesses should be most concerned about when it comes to their long-term
growth strategies. Every business should know or have a vested interest in
finding out how likely it is that a customer will recommend the company, their
products or services, to a friend.
Enter the
promotional program. The value of a loyalty reward program is that they increase
your customer retention rate by generating positive feelings in the customer’s
mind about their purchase with your company. Promotional program data indicates
that even a 5% increase in customer retention can yield a 25-100% profit
increase.
No comments:
Post a Comment