Make your customers smile with tips on rewards programs, customer retention, and commerce in general.
Customer lifetime value is a key success element for any business. The higher the value the more profitable the business will be. Lifetime value is mainly driven by customer retention. The concept is fairly simple—customers who are happy with the products and services of a company will keep on giving their business to them. Many businesses put their efforts towards focusing on attracting new customers, but the importance of customer retention is far greater and more important. For example, if a business focuses a large chunk of their marketing budget on bringing in new clients and manage to bring in many new customers in one month, it might seem like a success, right? And while only 20% of those new customers actually end up sticking around, loyal customers tend to spend five times more than a regular customer. So, how do you go about finding a customer retention solution that’s right for your business? Implementing customer retention programs like referral and loyalty rewards programs are great ways to improve customer retention—but before we get into that, let’s explore further!
The main thing to keep in mind when working to retain customers is how to keep them happy. Happy, satisfied customers won’t bother looking for a better deal elsewhere, and will begin to feel a sense of loyalty to your brand. For example, if you have a line of hair products and your customers are loyal, they’ll be more likely to choose your products if you decide to branch out into skincare, even if they haven’t tried or heard good things about them yet. When you’re able to keep customers happy and retain their business, you can count on them becoming loyal as your business grows.
Your focus may be on bringing in more customers because you think that’ll increase revenues, but that may not always be the case. Think of it this way— while you’re busy out attracting new clientele, some of the clients you’ve already worked hard to bring in may be slipping away. It’s important that you focus on increasing the lifetime value of your current customers, if you want to keep revenues consistent and work to increase them systematically.
When you have customers that are loyal to your brand, they’re more likely to refer their friends and that, of course, means acquiring news customers. All you need to do is to provide your best customers with the right incentives and they will do it, with pleasure if I might add! A customer acquisition program can help reduce the cost of marketing and it will increase revenues.
When you have a loyal band of customers, you’ll be able to reap the benefits of customer retention marketing, which includes word-of-mouth advertising. Almost all marketing initiatives, whether they’re televised, online, through mail, or any other medium, cost a considerable amount of money to begin. Even then, with all marketing campaigns comes some skepticism from consumers—they know that marketing and advertising is a part of a business plan, no matter what form they consume it in. However, when they hear genuine recommendations coming from people they know and trust, who have nothing to gain from their promotion of your product and/or service, they’ll be more likely to see your company in a positive light and choose you rather than a competitor. Word-of-mouth advertising is invaluable, not just because it costs you next to nothing—but because of the reputable source the endorsement would have come from.
A customer loyalty program is a great way to keep customers coming back to your establishment—a tactic that’s especially helpful when a customer is trying out your business for the first time. A simple loyalty program like “buy three items, and get your fourth free” will make your business a better choice for customers since they know they’ll be rewarded for it in the long run. There’s a variety of rewards programs you can put into place, including tiered programs where customers can climb the ranks by spending more, and point systems that give them rewards on a rolling basis according to how much they spend.
In addition to a customer loyalty program, you can implement a customer referral program to encourage customers to refer their friends and family. When they refer someone and that person signs up, the customer will receive an incentive—a $50 credit, for example. To make the deal even sweeter and ensure that the people they refer actually go through with signing up, you can provide an incentive for them as well. Nothing works better than creating a win/win situation.
While loyalty programs and incentives can help guarantee that customers keep on coming back, offering special deals and discounts throughout the year will show them that you value their business—and valued customers are happy customers. When you show your most loyal patrons that you appreciate their business, you’ll decrease the chances of them looking elsewhere for a better deal, and ensure that they stay loyal to your brand, especially when the offers they receive from you are relevant to them and answer to their needs.
Looking for the perfect customer retention solution to suit your business? The answer is simple—give Kangaroo Rewards a call and request a live demo. Our platform can help you design the ideal loyalty program for your customers, increase your word-of-mouth advertising and give your referrals a boost. When you learn how to leverage your own customer base, you’ll be amazed at the results; let Kangaroo help you reward customers and foster a band of loyal clientele. Contact us today to learn about our customer retention solutions, and why we’re the ideal loyalty program partners for your business