At Neat Ideas, our motto is, “Reward, Recognise and Engage”. It underpins everything we as a team and it is the goal we set when we work with our clients. So, why do we believe rewarding member loyalty is so important?
What is loyalty?
First, let’s define what we mean by member loyalty. Loyalty is when your customer consciously chooses your business over competitors each time. They consistently choose your business, even when they could get the service or product elsewhere at a cheaper price.
How can you earn loyalty?
Loyalty isn’t a commodity that can be purchased. Businesses must first earn and then retain that loyalty. What makes a member loyal in the first instance? The actual reason a customer becomes loyal can vary from person to person. This can seem like a nightmare, if you can’t define the cause, how can you encourage it and profit from it?
The answer is by not focusing on earning loyalty but, instead, to put resources into retaining it. It sounds self-serving, because of course, a rewards company will say that, but the statistics show that this approach is what works. A company that rewards loyal customers is more likely to encourage loyalty than a company that wants to encourage loyalty but not reward it.
One of the most effective ways of retaining loyalty is by offering a rewards program that rewards loyal members. Members earn points by purchasing with your company and redeem those points for goods and services in your loyalty program. Loyal customers are rewarded because they were already going to do business with you, now they get a bonus for doing so. A good rewards program will convert the customers who weren’t already loyal because they will see there is a benefit to continuing to choose you.
Reward, Recognise and Engage
This all brings it back to our motto. By rewarding members with a loyalty program, you recognise their loyalty and encourage them to engage with your company on an ongoing basis.
We mentioned the statistics about rewards earlier in this post. If you’re still not convinced about implementing a rewards program perhaps you should consider these figures:
• A 2008 survey found that it costs 500% more to acquire new customers that to retain existing ones
• The cost of bringing a new customer up to the same level of profitability as an existing one is 16x more
• Lowering your customer churn rate, that is the rate that you lose customers because they move to a competitor, by 5% can increase your profitability by 25 – 125%
Neat Ideas can work with you to implement a rewards program that will help you reward, recognise and engage with your loyal customers. Contact us today on 08 6389 0055 to find out how we can help you.