In a highly competitive industry, a customer loyalty programme can really help a business stand out. Such programmes have become massively popular in the last few years- in America, more than 80% of adults belong to at least one loyalty programme.
Loyalty programmes could be a good idea for your business, but before implementing one it’s worth considering whether you want to acquire new customers or retain existing ones and whether loyalty programmes would help you achieve your target.
The Difference Between Customer Acquisition And Retention:
To put it simply, customer acquisition is the process of gaining new customers, whereas customer retention keeps those customers coming back to your business time and time again instead of going to your competitors.
Methods for acquiring customers include special offers and promotions. Once those customers have used your business, you can then use retention techniques like providing a memorable service or keeping in touch with them.
It’s important for any business to acquire customers initially but retaining these customers can be hugely beneficial in the long run.
Loyal customers are more likely to spend more, and studies have shown that increasing your customer retention rate by as little as 5% can boost your profits by up to 95%.
What’s more, loyal customers can act as brand ambassadors- they’re more likely to recommend your business to close friends and family, which will help you acquire new customers.
Building a loyal customer base is essential if you’re in a highly competitive industry, as a group of loyal customers will keep coming back to you instead of competitors, giving you more reliable business and will help your business stand out.
What Is Customer Loyalty Programmes Good For?
Implementing customer loyalty programmes can be beneficial for your business, but if you’re just looking to acquire customers it may not be worth it just yet.
Good loyalty programmes can certainly help you acquire new customers- more than 6 in 10 people believe a company should offer a loyalty programme, so by implementing one you’ll be able to attract new customers.
However, these programmes can be costly and challenging to implement, although loyalty agencies like TCC Global can help you build one. If you’re just starting out, however, it may be worth looking at other options to acquire customers first.
When it comes to retaining customers, however, loyalty programmes are essential. Customers are more likely to keep using your business if they feel they are being rewarded for it.
Overall, as you can see, customer loyalty programmes can definitely help with customer acquisition. A robust loyalty programme can attract new customers, but it can be expensive to implement if you’re a new business.
Therefore, if you’re just looking to acquire customers it may be worth looking at other options first as getting a loyalty programme wrong could harm your business’ finances and reputation.
However, a well-implemented and effective loyalty programme could be the thing that gets a potential customer’s attention, so it’s worth looking at it whether you’re trying to acquire new customers or retain existing ones.