With more time to spend on the Internet there’s no denying that there has never been a better time to sell online. But with more customers comes more sellers – which means that securing your customer’s loyalty has never been more important. But loyalty can’t simply be bought. Today’s consumer is looking for more than great prices. A seamless, convenient buying process and a system that rewards their loyalty is important to them too.
A well thought out membership program (also known as a loyalty program or rewards program) offered via your Neto store is an excellent way to convert your one-time customer into a repeat customer. Discounts, special offers, free shipping, gifts with purchase and excellent customer service are all things that can be built into a membership program and help to keep customers coming back to your store. But the rewards aren’t just reserved for your customers.
Their loyalty to your brand will reward your business and your bottom line in these 5 key ways:
- Helps to build and nurture customer relationships
- Increased Revenue
- Higher Profits
- Turns your customers into a referral network
- Gives you feedback and data to analyse
Let’s take a closer look at each of these benefits in more detail.
1. Build and Nurture Customer Relationships
By 2020, customer experience is expected to become a bigger brand differentiator than price and even the products themselves.
Even in the world of online shopping, your customers don’t want to feel like a number. Your customers want to feel as though their business matters to you – that their business is important and valued. A membership program that rewards loyalty is a great way to prioritise serving your existing customer base to show them they are important.
Just having a membership program won’t guarantee your customers are always 100% happy with your service – you still have to deliver a great customer experience to your customers. But having one is a good place to start when it comes to engaging your customers beyond that first sale and continuing their customer journey with your brand.
2. Increased Revenue
Every business needs a steady stream of new business. This is known as customer acquisition. But customer retention can have a far bigger impact on revenue.
- Increasing customer retention by just 5% can boost revenue by 25%-95%.
- The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%
- Loyal customers spend 67% more than new ones
Simply put, loyal customers, nurtured through your membership site, develop trust in your brand. The flow on effect of this deepening relationship is that your members spend more and more often, which underlines the value of a program that fosters trust by rewarding customers for loyalty.
3. Higher Profits
A membership program that rewards members with special offers, discounts and free shipping is a cost to your business. But before you start adding up the cost of a membership program, consider this; it costs up to 5 times more to attract a new customer than retain an existing one. Put that way, it’s easy to see how a membership program can lower your marketing costs.
The metric used to measure this saving is known as customer lifetime value (CLV).
CLV is the total net profit a company makes from any given customer over time – the longer you retain the customer, the more profitable they become, even when taking into account the cost of the rewards you offer them.
4. Turns your customers into referral network
One of the big advantages of a loyalty program is that it can help you to build a referral network for your products/services.
Many studies have found that at least 80% of people trust word-of-mouth recommendations from friends or family – more than any other form of marketing. And according to McKinsey research, word-of-mouth is the main factor for up to half of all purchasing decisions
Keeping your customers engaged and rewarding them with a convenient and competitively priced experience, served up with excellent customer service via their membership, can turn customers into advocates for your brand – which helpst to bring in new customers.
5. Gives you feedback and data to analyse
Businesses with a membership base are able to track member behaviour to determine what products/services their customers are most interested in, buying patterns, email open rates, which incentives appeal the most etc. etc. Members are also more likely to share feedback with you. All of this information gives you data that you can analyse to edit and refine your offerings and the membership experience. Your findings feed into customer retention by helping you to tweak your offers and service as needed, so you can continue to provide high value to your members.