{"id":1675133,"date":"2020-08-26T14:07:02","date_gmt":"2020-08-26T21:07:02","guid":{"rendered":"https:\/\/www.retailpro.com\/News\/blog\/?p=1675133"},"modified":"2020-08-26T14:20:23","modified_gmt":"2020-08-26T21:20:23","slug":"measuring-roi-of-relationship-building-with-loyalty-programs","status":"publish","type":"post","link":"https:\/\/www.retailpro.com\/News\/blog\/index.php\/2020\/08\/26\/measuring-roi-of-relationship-building-with-loyalty-programs\/","title":{"rendered":"Measuring ROI of relationship building with loyalty programs"},"content":{"rendered":"\n
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Customer retention is a huge challenge for retailers, and all recognize the advantages of cultivating a base of customers: A 5% increase in customer loyalty can increase the average profit per customer by 25% to 100%, according to fitsmallbusiness.com.<\/p>\n\n\n\n

Creating a customer experience that is satisfying is a much more cost-effective strategy than constant prospecting.<\/p>\n\n\n\n

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\nShort-term value of increasing sales vs building relationships<\/h3>\n\n\n\n
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Some businesses assume that by simply rewarding customers with discounts, shoppers will become more loyal; JC Penney discovered the unintended side effects of sale psychology too late.<\/p>\n\n\n\n

However, cultivating a strong emotional bond between a brand and its customers is what makes it more likely that a customer will continue to visit the store or website in the future.<\/p>\n\n\n\n

And the intangible aspects of relationship building come actually with a very clear ROI, if you\u2019re tracking the right metrics.<\/p>\n\n\n\n

For example, offering a sales discount as part of a birthday recognition personalizes the rewards experience to every member, making each feel special and recognized for being a loyalty club member.<\/p>\n\n\n\n

Yes, you\u2019re making them feel special and a little more bonded emotionally to your brand.<\/p>\n\n\n\n

And yes, you see immediate ROI on those relational tactics when they redeem their birthday offer.<\/p>\n\n\n\n

Watching for and leading customers to the next phase in the journey toward a higher overall CLV should be the goal of every loyalty program, and can be accomplished more effectively with loyalty and personalized marketing tools like AppCard for Retail Pro<\/a>.<\/p>\n\n\n\n

While well-run loyalty programs that deliver customer satisfaction clearly improve retention rates, they can also be a means to attract new customers.<\/p>\n\n\n\n

First-time shoppers can easily recognize a program that makes customers a priority and that anticipates and exceeds their needs as soon as they join.<\/p>\n\n\n\n

Having a well-designed loyalty program not only keeps returning customers happy, but it also grows the retailer’s customer base.<\/p>\n\n\n\n

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\nMillennial mindshare: Experiential loyalty<\/h3>\n\n\n\n
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Millennials are the largest group of shoppers in the current market, and as a demographic, they are very brand loyal.<\/p>\n\n\n\n

However, they are particular about what they are looking for in a loyalty program.<\/p>\n\n\n\n

No punch cards for this generation \u2014 or trading stamps.<\/p>\n\n\n\n

The key to success with millennials is building a relationship, and that’s done through offering special experiences rather than coupons.<\/p>\n\n\n\n

For example, a credit card that offers advance ticket purchasing for popular events; a coffee roastery that gives members a heads up to new roasts and coffee tastings or a makeup line that provides VIP access to a celebrity Q&A on a social network are ways to make a customer feel special and want to be part of a loyalty program.<\/p>\n\n\n\n

Loyalty programs are important to retain customers and attract new shoppers, as well as to help retailers forge deeper, richer, customer connections.<\/p>\n\n\n\n

Happy customers spread the word, and prospective customers generally trust friends\u2019 feedback more than advertisements or other types of marketing.<\/p>\n\n\n\n

Loyalty programs help polish a retailer’s image.<\/p>\n\n\n\n

Humans want to feel special, and loyalty programs help retailer provide that experience.<\/p>\n\n\n\n

By doing so, retailers reap the benefits of repeat customers while attracting new ones \u2014 and enhancing their brand’s reputation.<\/p>\n\n\n\n

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Knowing your customers and winning their loyalty: correlation or causation?<\/a><\/p>\n<\/div><\/div>\n\n\n\n

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Innovating millennial loyalty<\/a><\/p>\n<\/div><\/div>\n\n\n\n

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VIP experiences that build loyalty in luxury retail<\/a><\/h2>\n<\/div><\/div>\n\n\n\n
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A little data-driven loyalty goes a long way<\/a><\/p>\n<\/div><\/div>\n\n\n\n

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Customer retention is a huge challenge for retailers, and all recognize the advantages of cultivating a base of customers: A 5% increase in customer loyalty can increase the average profit per customer by 25% to 100%, according to fitsmallbusiness.com. Creating … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":12,"featured_media":1675137,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,188],"tags":[17,77],"class_list":["post-1675133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail-customer-business-intelligence","category-customer-experience","tag-loyalty","tag-millennials"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t