![]() This isn’t the end of the acquisition-related impact of loyalty programs. That’s why an Aimia study suggests that loyalty programs improve customer acquisition by up to 10%. The factor that people trust referrals from their own people more than any other form of advertisement coupled with an allurement of loyalty rewards is like a sure funnel of acquisition. When you link loyalty programs with referral campaigns, the acquisition machine will begin to feed itself, which is evident across other channels. It’s a serious amount of money! I am not saying that PPC and social media don’t work, but when joined with a loyalty program, you will be spending less on the above. I have seen this cost vary from around $400 to $5,000 per customer acquired, depending on the level of touch needed. How does your customer acquisition cost (CAC) compare?Īs the conversion rate is 10%, we can assume that each customer costs $100 in just lead generation expense. Take a look at the following acquisition expense sheet of one company. Just think about how much money marketers spend on customer acquisition through channels like PPC, PR campaigns, content marketing, social media, and others. This stat has been mentioned a thousand times, but no marketer can afford to overlook it: It costs the average business 5 times more to acquire a new customer than it does to retain a current one. The Impact of Loyalty Programs on Acquisition Besides, it simply makes your efforts much more targeted and relevant. It becomes much simpler and cost effective to create a mode of communication with them. The reason behind this is you have a deep knowledge of your loyal customers. ![]() Another important point in the premise of revenue is that running loyalty programs to gain sales is much cheaper than the expense which is associated with the TV or billboard commercials for the same purpose of sales. They adjusted their loyalty program to compete with large online retailers like Amazon and eBay, a strategy that helped their stock more than doublesince early last year. Not just that… another large retailer, Best Buy, also turned to customer loyalty after experiencing stagnant revenue growth year after year in its brick-and-mortar stores. It produced a 26% rise in profit and an 11% jump in total revenue. ![]() Starbucks began their loyalty program in 2013 with the same aforementioned goals. Apart from ensuring repeat purchase from loyal customers, loyalty programs are also achieving upsells. It’s like a math theorem that’s proving two principles. In a survey recently conducted by Clickfox, 54% of respondents said they would consider increasing the amount of business they do with a company for a loyalty reward, and 46% said they already have. This recently concluded study says that only 12-15% of customers are loyal to a single retailer, but they represent between 55 -70% of total sales (Center for Retail Management, Northwestern University). Chart from the Center for Retail Management at Northwestern University. There is no doubt whatsoever in the fact that strong loyalty programs encourage your existing customers to spend more and to ultimately purchase more frequently. All businesses come into existence to earn a profit. The Impact of Loyalty on Finding the Right Customers.The Impact of Loyalty Programs on Acquisition.In short, the impact of customer loyalty programs is widespread. Thus, loyalty becomes a part and parcel of your daily life and soon it becomes a behavioral pattern. You might pop into your favorite clothing store, and before leaving the place, purchase one extra shirt because of the loyalty points that had accumulated in your account.You can participate and win awards in online games and polls run through gamification software and redeem them. You might end up eating a burger for free because you frequented a certain restaurant for a considerable amount of time. What is the actual impact of ecommerce loyalty software, though? Knowingly or unknowingly, peoples’ behaviors are touched by loyalty programs. It also explains why businesses of all sizes are bending over backward to get it right. It’s glaring proof of the fact that customers do like to be a part of a well-designed and finely executed loyalty programs. This is a 26% increase over the number of memberships reported in their last study in 2013. consumers hold 3.3 billion memberships in customer loyalty marketing programs. As per the 2015 ColloquyLoyalty Census, U.S.
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