Inspiring loyalty doesn't have to be an expensive process. In fact, if companies focus too heavily on providing customers with high-cost rewards, the ROI of their marketing efforts is likely to suffer. Instead, it may be a wiser plan to offer more frequent, personalized benefits that come at a lower cost to the business.
Why reward loyalty?
For some companies, the thought of creating a loyalty program might seem to be a process that requires too much work or is too taxing on their budgets. However, this attitude can severely limit a business' potential to achieve success. According to a recent survey of Australian loyalty programs by Directivity and Citrus, 80 percent of consumers asserted that they buy more from companies with loyalty programs that they belong to. Additionally, 55 percent of the more than 1,000 individuals polled said that when they are faced with choosing from two similar businesses or products, they gravitate toward the ones that offer loyalty programs. Thus, if a business neglects the opportunity to offer loyalty rewards, it may end up missing out on chances to increase revenue.
Forbes recently noted that today, it's easier than ever before for companies to use loyalty rewards to their advantage. For example, there are many ways that even smaller businesses can use mobile tools to create low-cost programs that result in high levels of engagement. Some apps, such as LevelUp, have shown how how much of an impact loyalty programs can have on consumer behavior, especially when companies come up with new and creative ways to reinforce desired actions. The source pointed out that with these mobile apps, businesses can do more to reward a variety of activities, such as visiting the brand's social media website or writing a review. And because the company can customize the incentives for doing these things to suit the interests of its target audience, the rewards can be highly targeted and cost-effective.
How do you contain costs?
One way that businesses might be able to improve the ROI of their loyalty programs is by utilizing high-value, low-cost rewards such as discount savings programs. These programs can feature discounts on things their customers do every day such as dining, shopping, travel, attractions and more. The Intuit Small Business Blog advised that one option that is often low-cost is to partner with complementary companies, giving the customer the chance to save in a multitude of ways without the brand having to discount its own products or make expensive offers, such as high-cost gift cards. Consumers are looking more for value than for price: When loyalty rewards reflect an understanding of their needs, customers are more likely to redeem those offers and keep coming back.