What are loyalty programs and how are they helping bigger companies?
What is a Loyalty Program?
Let's understand this generically, so we can relate to the concept quickly.
When we visit the small general stores present in our local, daily or once a week, the store owner would recognize that we are his regular customer and would try to build a rapport and give discounts on some products that you buy often. So, you would become his loyal customer.
Also, the store owner would remember if you have bought something that is very costly or if you are a frequent buyer and he would remember if you have had a friendly conversation with him.
In the above scenario’s the store owner would like you to visit his store frequently and buy something. So, the store owner would remember you, your name, or even ask you for your mobile number.
Consider this in an enormous company!!
It would be very tough for your company to keep track of the customers who are loyal to you or who have bought something of high value where you made enough profits. You also might want to keep track of customer purchase behavior and in turn, reward the loyal customers for their purchases.
And this is where the Loyalty programs come in, filling the crack. You can create a loyalty program for your company and in these loyalty programs, we can track down the member in terms of transaction and behavior.
With these programs in place, the company can perform the below activities
- Launch lucrative offers to enroll new customers into the program.
- Track customers' transaction details, define spend threshold, and reward them based on the spend threshold.
- Track customers' behavior and reward the members based on the behavior of the member.
- Reward customers based on referrals.
- Notify enrolled members of the offers and increase the DAU’s (Daily Active Users) or MAU’s (Monthly Active Users).
Loyalty Programs reward members either by awarding certain currency (Points) or privilege (Product/Service) in return.
Currency: These loyalty currencies are usually some points that have a certain conversion rate with the actual currency(dollar). We assign these points based on certain activities by the member.
e.g: Flipkart Super Coins
Privilege (Product/Service): These are usually the products/services in return to the customers.
e.g: Assigning Complimentary breakfast for customers who book to stay in the luxury hotel room for at least a single day.
Some programs even ask customers to subscribe to get benefitted from their loyalty program.
e.g: Amazon Prime asks customers to subscribe to their program by paying a certain amount to get the program benefits.
Using the data, and by transforming data, making some insights out of the it, we can take analytics driven decisions along with tracking some important metrics like
- Investment in Total Sales
- Offer Performance
- New customers enrolled in a timeline.
- Customer's favorite brands and hotels/locations.
- And a lot more.
You can launch these loyalty programs for different categories like B2B (Business to Business), B2C, B2B2C, B2E (Business to Employee).
Conclusion
The Loyalty Program helps your company grow, get new customers, and serve the existing customers better by helping them identify loyal members. Research proves that possessing loyal members would help a company survive for a long time.
So, don't lose your loyal customers!!.
Thank you for reading!
