Returning customers are bread and butter of any business, accounting for 25% – 40% of the revenue. It’s easier to keep a customer coming back for more than to acquire a new one, too. Returning customers also spend more, 67% on average than first-timers, according to a research by Bain & Company.
Among many marketing methods to get more customers to come back to your stores, there is an easy but (often overlooked) strategy: a loyalty or rewards program. Loyalty program is one of the deciding factors that influence where customers choose to shop, especially Millennials. According to a study by Bond and Visa, more than 80% agree that they are more likely to continue shopping at a brand that has loyalty programs. Here are some other benefits that a loyalty program can bring to your business.
Increase the frequency of customers’ visits
If more of the same people come to shop at your stores more, it means you sell more. A loyalty program can make your customers come in twice as often in the same period of time. This is especially true for loyalty programs with time limit, like the points you’ve earned within this year will be expired on March next year, or loyalty programs with rewards for customers spending over a specific amount, like 1 free cup of coffee for every 10 cups you’ve purchased.
Increase the transaction size
Setting a minimum threshold for earning points motivates customers to spend more to meet that bar. For example, if customers can earn 1 point for every $10 spent, and they have spent $25, they’ll be likely to spend another $5 to get 3 points. A research from Bond Brand Loyalty studying Millennials even showed that one-third of respondents reported buying something they didn’t need or want just to improve membership status.
However, be careful when setting up your rules here. Don’t make the rules so challenging that they become barriers discouraging customers from taking part in your loyalty program and leave a bad impression. The rules should be easy enough and there must be a clear instruction on how to earn the rewards because customers love convenience. If you ask how easy it should be, set the rules that allow at least 80% of your transactions to be eligible for your loyalty program.
Grow your email marketing list
Loyalty program is an easy way to get a customer signed up. Once customers enroll, you can reach out to them via emails to send them useful information like new arrivals, promotions and the current status of their point balance.
It’s easy and quick to create a new customer and sign him/ her up for your loyalty program in ConnectPOS, so you don’t have to sacrifice the line speed. ConnectPOS is integrated with Reward Points from Aheadworks, which can also be integrated into your Magento store. It takes just a few minutes to set up and your customers can use their online points to pay for their in-store orders and earn points for such orders at the same time.