Loyalty marketing increases sales, reduces marketing costs, and ensures a source of dependable profits – and any business can do it.
Chances are, there are businesses you automatically turn to when you need them.
It could be the supermarket you shop at every week, the service you phone when you need an appliance fixed, or even the bank you set an account up with when you got your first job, and who you went with for your home loan.
To these businesses, you are a loyal customer – and it didn’t happen by accident.
Businesses employ loyalty marketing strategies to develop relationships with customers and strengthen their brands by rewarding them for their custom with offers and discounts.
Loyalty marketing increases sales, reduces the costs of marketing, and ensures a solid source of dependable profits – and any business can do it.
What is loyalty marketing?
Loyalty marketing is a marketing strategy focused on acquiring and retaining loyal customers by developing relationships and offering incentives like rewards and discounts.
Loyalty marketing involves implementing strategies, such as social media campaigns and referral programs, to build trust and keep frequent shoppers engaged.
Well-crafted loyalty marketing strategies can boost profits through increased sales and referrals and help grow your brand.
Why is loyalty marketing important?
Here are some reasons why loyalty marketing is important:
1. Loyalty marketing sets you apart from your competitors
Loyalty marketing produces a customer base that, when needed, will always choose you. Customers have a relationship with your brand; they know, through the rewards and incentives you provide, that you understand and value them.
2. Loyalty marketing increases the perceived value of your brand
The more rewards a customer receives, the more likely they are to view your business as one worth staying connected to. When they think of your brand, they think value; when it comes to purchasing a product, they think of your business.
3. Loyalty marketing boosts marketing opportunities
Loyalty programs allow businesses to advertise products and services on an ongoing basis, by offering customers rewards and incentives.
With every purchase or customer interaction, your company is able to collect valuable buying information and customer demographics, which better informs future marketing activity.
What are the goals of loyalty marketing?
Loyalty marketing can make a real difference to the number of repeat sales and referrals – here’s why companies are developing loyalty marketing strategies:
To increase the number of repeat customers
Returning customers tend to spend more than new ones. They often stay updated on brand news, which can inspire them to try new products along with their usual purchases. As they build a lasting relationship with a company, they’re likely to spend more over time compared to one-time buyers.
To gather important marketing data
Loyalty marketing allows your business to collect valuable data about customers. By gathering insights into customer demographics, buying habits, and purchasing history, you can fine-tune your future marketing, as well as products and services to meet their needs.
To improve conversion rates
The consideration stage of the buying cycle is where customers decide to make a purchase – and customers exposed to loyalty marketing are often more likely to convert. They already know your brand, and they already value it.
Additionally, with the data they already have on customers, marketers can employ more targeted tactics, leading to a greater number of conversions.
To boost profits
Increased conversion rates mean lower marketing spend and increased profits. It’s more cost-effective to nurture and develop a current customer than to convert a new one because you don’t have the added marketing costs of lead generation.
What are the benefits of loyalty marketing?
Loyalty marketing is a powerful tool for customer retention. Loyal customers are more likely to stick with a brand, which reduces churn and helps maintain a stable customer base, without the need for and marketing costs associated with constant lead generation.
Loyalty marketing makes customers feel connected to a brand, and more likely to remain consistent buyers.
Brand loyalty also offers a significant edge in competitive markets. In an environment where customers face numerous choices, a loyal customer base can set a brand apart.
Loyalty marketing also delivers security. A stable customer base of regularly-purchasing customers helps protect businesses from fluctuating markets.
Speak to the marketing experts
Loyalty marketing is all about relationship building and nurturing.
Assemblo is a full-service marketing agency based in Melbourne, and we know how to best engage with your existing customers for brand growth and increased profits.
To find out how we can help your business, give us a call on (03) 9079 2555 or send us a note via the contact form below.