Loyalty program is a common marketing tactic having the potential to significantly impact your bottom line. Covid-19 considerably changed customer behavior from embracing online shopping to re-assessing priorities. Loyalty programs, when combined with the correct strategy, make a positive and significant impact on their capability to maintain & gain a loyal client base.
Positive Aspects of Loyalty Programs
1. Easy Client Retention – Loyalty programs with consumer points system aid you to build loyalty and inspire them to retain clients by rewarding them for their reprise purchase behavior. Hence, it acts as a tool to remember your clients by giving them huge motivation to purchase repeatedly from your brand.
2. Analyze Clients Behavior – Customer data & behavior play a significant role in building your client base. Loyalty program software offers your customers behavior as well as shopping preferences. Use this data for delivering an omnichannel experience to its customers. Thus, businesses can easily divide their loyalty program to provide better customer experience offline and through eCommerce segmentation.
3. Increases Your Cart Value – As loyalty program software gives a comprehensive view of client behavior, buying habits & preferences. Brands can use this info to revitalize their inventory organization, pricing, & promotional planning. This data is used by the brands to offer special promotions so as to clients can make additional purchases & increase their sales.
4. Better Engagement of Client – The best loyalty programs provide a direct line with customers. It makes your interaction much easier with clients as your sales publicities directly influence the behavior of your clients.
Negative Aspects of Loyalty Programs
1. Providing the Same Experience – Loyalty programs are everywhere & are providing the same experience to customers. They have same membership provisions, benefits and rewards.
2. Financial Loss to Brands – Loyalty can cause harm and can lead to monetary loss to the association. Many brands offer their clients the best deals and offers to boost sales. Ensure that your loyalty management program is equally priced and efficient to move beyond monetary loss.
3. Difficult to Recognize Loyalty Behavior – The loyalty program software framework just provides the data & analytics of the clients. It does not guarantee the transactional spirit of the customers.
4. Invariable Sales – Customer demand alters with time, lifestyles, income and needs. Therefore, loyalty program software cannot define more repurchases according to the historical behavior of consumers. However, integrating the client points system can rise sales to some point. However, when you remove loyalty points & offers, your sales fall considerably. This displays the invariability of sales.