Customer acquisition has long been a primary focus for many companies. No doubt attracting new customers helps your company to grow, but it’s also possible that you could be allowing current ones to slowly drift away. Customer retention is critical for making sure that your business in the service industry doesn’t become a revolving door. Loyalty programs play a pivotal role in improving customer retention in the service industry, which is demonstrated by the success of the strategies that digital marketing agencies use to draw people towards their clients’ businesses.
Understanding Customer Loyalty
Customer loyalty is simply the likelihood that someone will continue to do business with your company. Focusing on building customer loyalty helps your business to save money on marketing strategies in the long run, since recruiting a new customer can cost five to seven more times than it does to keep a current one.
Customer retention also allows your business to have greater success with upselling goods and services, and happy customers will often bring in new business as they share their testimony and make referrals to their family and friends. Keep in mind, however, that shoppers are always looking for the next best thing. If they find deals at another company that offers similar services, then they’ll be tempted to stray. Setting up a loyalty program helps your business stay competitive in an ever-changing market.
Looking At the Current Service Industry Landscape
The current service industry landscape is increasingly competitive, given that customers can now find all of the information they need about a company at their fingertips. Not only are customers looking for excellent deals, but they are also looking for companies that reward their loyalty with discounts, bonus services, and other perks.
While your company may already be offering multiple coupons and discount codes, it’s critical to figure out exactly what customers want to keep them loyal. This is where digital marketing agencies shine. By conducting market research and using analytics to encourage customer engagement, a digital marketing agency can help your company develop a loyalty program that works.
Using Loyalty Programs In the Digital Age
For years, traditional loyalty programs to retain customers such as punch cards worked well. But, the digital age has made it easier to reach out to customers that no longer want to carry around a punch card in their wallet or bring in a paper coupon. The current trend is to set up digital rewards that allow customers to tap into their program using a simple app or website login.
Many of the top brands in the fast-food restaurant industry are utilizing a digital loyalty program to leverage their brands. Domino’s Pizza is currently leading the way with over 27 million members who all sign up for the loyalty program that often offers perks such as free pizzas or desserts to those who make orders frequently.
Exploring Strategies for Implementing Effective Loyalty Programs
As exciting as it is to retain millions of customers, it’s important to realize that Domino’s and other top companies don’t make this achievement without a complete understanding of their target audience. For a loyalty program to be effective, it must be customer-centric.
Using data-driven insights is critical for creating a program that offers personalized benefits to your company’s customers that keep them coming back for more. Digital marketing agencies also use strategic engagement techniques that make loyalty programs more alluring to customers. For instance, they may allow the rewards to build as customers accumulate more orders, and it’s critical to get the word out about the program by using various social media platforms and email marketing.
Taking a Look At Current Case Studies: Digital Marketing Agencies’ Success Stories
The potential that loyalty programs to retain customers hold for growing your business is evident by looking at some of the most well-known strategies that are currently being used by well-known brands. Mcdonald’s is recognized as having one of the largest loyalty programs in the world, and their recent plan helped to increase sales by more than 12% in the first quarter after its launch while bringing in 60% more digital sales than the previous year.
Sephora is another case study that offers an example on how to leverage emotional rewards in a loyalty-based program. Current research shows that 75% of what stimulates customer engagement is emotional perks, and the company has slowly altered its strategy over the years to adjust to changing consumer interests. While the initial rewards focused on transactional rewards, the company now offers benefits that range from gaining access to special online meetings with experts to getting first dibs on new products before they launch to the general public.
Measuring the Impact of Loyalty Programs
Using loyalty programs to retain customers usually show measurable results by the end of the first year. Membership sign-ups, customer retention rates and customer churn rates are a few of the KPIs that digital marketing agencies use to measure the impact of both newly implemented and ongoing programs. Sephora’s growth demonstrates one of the top examples of recognizing the need to change and using data to drive the success of customer retention programs.
Avoiding Common Challenges and Pitfalls
As effective as loyalty programs to retain customers are, you’ll want to keep in mind that there are some challenges and common mistakes to avoid. Failing to fully market the program is one of the biggest mistakes a company can make, since customers can’t sign up for a rewards offering that they don’t know about. You’ll also want to make sure that the rewards accounts and associated perks are easily accessible and tailored to fit the needs of the target audience.
Anticipating Future Trends In Loyalty Programs
Customer expectations are constantly changing, and partnering with a digital marketing agency that knows how to utilize emerging technologies such as AI and blockchain allows your company to stay on trend. Ensuring that rewards programs are also based upon using sustainable and ethical practices also helps your company to retain customers by demonstrating responsibility as a leader in the industry.
Discover How Loyalty Programs Can Impact Your Business
If you’ve found that your company’s growth is stagnating despite acquiring new customers, then it’s time to explore how initiating a customer loyalty program can improve customer retention. At Semgeeks, we specialize in marketing for companies within the service industry, and we’ll help to develop a customized loyalty program that gets your current customers excited about continuing to visit your business. Reach out to a member of our agency to gain further insight into how the right loyalty program can help your company find greater success in the upcoming year.