Loyalty Program helps merchants and businesses of all types build a lasting relationship between brands and their customers. Build customer loyalty that encourages customers to feel connected and cultivate long-term relationships with the brand. The highlight of the Loyalty Program is to encourage good feelings toward the brand and make customers feel most emotionally connected or memorable with the brand. Brand attachment cannot be achieved overnight, but it pays special attention to its customers until the brand can develop deep emotional bonds with customers and encourage customers to repurchase the products and services repeatedly, which is the key to the brand's long-term growth.
Importance of the Loyalty Program
- Increase sales and profits
Loyalty Program is a marketing tool that is known for increasing sales. It encourages customers to buy products and services repeatedly, makes the brand stand out above its competitors, and eliminates the problem of price competition with its competitors. Suppose the brand has a good Loyalty Program. In that case, the various marketing strategies that are put into action will raise the value of the brand's products and services to a higher value, which makes a business succeed in the long run. A brand's value will increase until customers' emotions toward your brand are more than just a store. They will feel emotionally attached to the brand until they are willing to support it closely. - Attract new customers and retain the existing customer
If the brand's loyalty program is effective, it can turn regular customers into loyal and supportive customers. Whether the brand will release a new product or do whatever, the loyal customer is happy to support and refer to the brand. Moreover, with various privileges in the Loyalty Program, it is easy to attract new customers to try the brand's products and services. - Collect customer data for further improvement
Membership is required for customers to receive rewards and benefits from the brand. It allows brands to collect personal data about their customers that can be used for further benefits such as customers' shopping behavior and find a strategy to attract these target customers to be more effective or present product personalization to suit different groups of customers.
Types of Loyalty Programs
- Point Programs
Typical loyalty program is in the form of a plastic card or/and digital card according to applications and programs. Customers will receive points for purchasing a brand's product and services. After milestones that customers have crossed, customers can redeem the accumulated points for special privileges or redeemed rewards from the brands. - Cashback Programs
Cashback programs are prevalent in the credit card or bank sector. Customers will spend a certain amount to receive a certain amount of cash back after shopping for products and services of the brand. Moreover, cashback programs can also collect cashback to use as a discount on their next purchase. Therefore, it is a tool to encourage customers to repurchase the brand and drive additional sales. - Tiered Loyalty Programs
Ranking a brand's membership based on the spending on a brand's products or services not only encourages frequent use of the brand's products and services but is also another tool to help build brand image and increase brand value to be more effective. Brands that take advantage of this Loyalty Program make full use of it. Let us see successful case study examples of a fashion brand like Hermès with a membership level worldwide. Anyone who purchases a brand's product and reaches a certain threshold will be promoted to another tier and able to buy Limited Edition products with limited quantities of the brand. This strategy encourages customers to purchase new products in every collection to raise their tiered continually. - Premium Loyalty Programs (Paid Loyalty Programs)
A premium loyalty program is a pay-to-upgrade service. For example, streaming service providers and retail businesses commonly use a subscription. This program allows customers to pay for additional tiers. The higher the level, the more fun and responsive new services will be provided, such as the streaming package of the VIU application that, when customers upgrade to Premium, customers will be able to watch more dramas and movies or be connected to a smart TV screen, etc.
Loyalty Program is Suitable for Who?
- Business Owners
A Loyalty Program is a marketing tool that every brand should apply to suit the product and service. Every business wants to maintain its existing customer base and create a system that encourages customers to buy products and services repeatedly. Because the more customers purchase the products and services frequently, the more the business earns. Loyalty Program also helps build a large base of loyal customers. This is very helpful when a brand launches new products and services. The existing customer base will also help with trials and reviews and spread awareness to their community. - Marketer
Loyalty Program is a marketing tool and necessary for marketing strategy. Therefore, skilled marketers must know how to utilize the resources of the Loyalty Program to maximize the benefit of the business because the Loyalty Program impacts brands by increasing sales and saving money on doing business, making it easier for marketers to work. In addition, it helps collect customer data that can formulate strategies, analyze, set target groups, and use this data for remarketing or being effective in the future.
Did you know that the Loyalty Program is a critical factor that enables your business to grow steadily in the long run? Especially in an era where brands are highly competitive and have always been a tussle for customers. What if your brand does not have enough attractive loyalty programs? There probably will be a risk of losing regular customers to a competitor. So do not underestimate the importance of the Loyalty Program. Review your products and services, understand more about your customers, and check out for Loyalty Program that suits your business perfectly without missing any opportunities for future growth. The Loyalty Program is not just about preventing customers from leaving. It is also about maximizing the opportunity for growth.
