Returning customers are something that all businesses want. Although coaxing new customers is great, it takes more time and resources to bring in new customers than it does to keep returning ones. One way of ensuring you bring them back is to offer a loyalty program. Here are five ways paid loyalty programs can bring customers back.
Why Are Loyalty Programs so Important?
There are many surveys out there that show having a returning customer is better than bringing in a new customer.
The probability that you will sell to an existing customer is around 60-70%. When you compare this to a new customer it drops to 5-20%.
Although you want to grow your business, you also want to increase your loyal customer base as well.
1. Customer Have an Investment
With a paid loyalty program, you have created a customer that has an investment in the company.
They are far more likely to return to your brand to utilise the bonuses and offers than they would if you had a free loyalty program.
2. Customers Feel More Exclusivity
Having a paid loyalty program makes customers feel more exclusive than a free scheme that anyone can join.
Not everyone will be willing to join a loyalty program that they need to pay for upfront, which means the members will have a core group of loyal followers.
3. You Can Offer Better Rewards
Because you are receiving a premium for offering rewards and offers, you can afford to give better incentives than a free scheme.
This will be something previous customers may find interesting and coax them to return. It means the offers you give must be of such quality that they see it as an incentive to return.
4. You Can Offer it as an Upgrade
If you have customers who haven’t returned but are on a free rewards scheme then you can always tempt them back with an upgrade.
You might want to include it in a newsletter and offer a few months on the paid loyalty program for free.
This could be enough to bring those customers back and then get them paying for the upgraded loyalty program later down the line.
5. Creating Something Your Competition Doesn’t Have
If you have done your homework, then you should already know what offers or loyalty schemes your competitors have.
If they don’t have a premium paid loyalty program, then this could be the perfect way to entice new customers to come over to your brand.
It may also bring back those customers who have left your brand for others in your market. However, it must be of such quality that it is better than the free program offered by the other brands.
So, should you invest in a paid loyalty program for customer retention?
Paid loyalty programs can be a good way to bring back your old customers as well as bring in new ones. You must make sure that the offers are high quality and give your customers something they can’t find with your rival brands in the market.