Over and over throughout the years it’s been said acquiring a new customer will cost five to seven times as much as retaining current customers. Having a solid rewards program is a good way to keep customer retention high, because you’re always engaging with the customers you know are comfortable buying from you. That’s not to say bringing in new customers isn’t important, but using the program as a way to keep your current customers coming back is a wise business move.
When the prize offered as part of a rewards program is substantial, the company offering the prize can often expect a surge in revenues as more and more people try to cash in. If the business offering the program has products that lend themselves to bulk purchasing, revenues may even increase dramatically for as long as the program runs.
Learning Your Customers’ Buying Behavior
Aside from handing out prizes and jacking up revenues, rewards programs are also a smooth way to set up future marketing campaigns. A good marketer always has to be playing one or two steps ahead, so knowing how customers are going to act is a huge bonus. By using a club card or similar system, a business can gather purchasing information that can help shape business strategy down the road. Studying the data, marketers can determine trends and patterns that will prove valuable when new products or services are launched.
Associate Your Brand With Fun and Winning
For the customers, the benefits of a rewards program are rather obvious. The chance of winning prizes along with your purchases is going to appeal to just about anyone. This is especially true if the program is attached to products that you would have bought anyway. Collecting points, getting a percentage of your purchase rebated, getting some free gas or a break on future purchases are always going to be popular with shoppers in virtually any industry.
Lots of Options – You Can Find the Right One
A business that is starting up a rewards program has many different types to choose from. Essentially, any type of program where customers are rewarded for purchases will do, but some common ones include cash back, travel rewards, gas rebates and points programs. Certain types of programs work better for certain businesses, but often it is through trial and error that you find the best kind of program for your business. You can also take the time to survey your customers to find out if they’re interested in one at all, and if they are, what type will work best for them.
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