Driving Up Sales with a Premium Customer Loyalty Program
Recently, there has been a notable increase in the number of retailers launching premium customer loyalty programs. After Amazon launched its program, brick-and-mortar as well as online businesses began to follow suit. In fact, many businesses have started to completely eliminate more traditional promotions to introduce quality customer rewards programs. In addition to making things simpler, this is a great way to drive up sales.
Increasing Sales by Faithful Customers
Premium customer loyalty programs are designed to get faithful customers into stores on a more frequent basis, whether in person or online. When properly implemented, these programs are quite successful. After all, customers who are loyal to specific stores will be more inclined to pay for a high-quality loyalty program, but only if they feel there is real value added.
The key to success with these programs is just that, providing loyal customers with something of genuine value and unique to the store that targets both the wants and needs of the customer.
Customer loyalty programs have been around since the 18th century, when merchants handed out tokens that customers could redeem for purchases made inside the store. More recently, these programs have gained momentum, supported by an increasing number of efforts for mobility loyalty coupled with digital innovations.
The success of these programs is evident from research published in 2015 by Colloquy, a marketing research firm. Researchers discovered that 3.3 billion memberships in customer loyalty programs are maintained by people in the United States. Compared to an earlier study conducted just three years prior, this is an impressive 26 percent increase.
Clearly, premium customer loyalty programs are becoming more popular. Since they drive up sales, you want to consider them as part of your sales and marketing strategy. Of households with an average annual income of more than $112,000, 70 percent rely on these very programs.
Although there are free and low-risk programs, they do nothing to drive up sales. However, with a fee connected to customer loyalty programs, revenue is generated automatically upfront, and these programs boost sales in the long term. Remember, people who pay for benefits are more inclined to shop with a specific retailer; therefore, the return on investment is even greater.
Competition among brands on a national and international level is fierce, making it difficult to turn a profit. To enhance the profit margin, you should consider implementing a premium customer loyalty program.