Why you should have a Loyalty Program

Why you should have a Loyalty Program

Let’s start with something worth remembering. Selling to your existing customers is a lot easier than attracting new ones. In fact, the probability of selling to an existing customer is 60-70% while the probability of selling to a new prospect is 5-20%.


It might seem like loyalty programs only suit restaurants and retail stores, but in reality, any business can craft a loyalty program to reward their best customers and make it worth their while to come back and spend more money.

Get creative and understand what motivates your customers. You can create a loyalty program for any type of business.


Besides focusing on selling to your existing customers, there are various other reasons why you should launch a loyalty program.


1) Collect valuable data

Data is crucial to grow your business, you need to know who your customers are and how they behave in order to appeal to them. A customer loyalty program will allow you to collect such data.

Luckily, 56% of consumers are willing to share data to receive better service. In other words, you will be trading an amazing loyalty program for some data about your customer. This will allow you to put a face and a name to your customer, including when they buy and how much, especially if they are racking up points and redeeming rewards on a regular basis. The gathered data will allow you to create campaigns and products that are targeted at individual customers or groups of customers.


App City provide integrated customer data like never before. You can see who is coming into your business, how much they spend and when they redeem rewards.


2) Enhance your customer experience

According to Forbes, 79% of customers would take their business to a competitor within a week of experiencing poor customer service. It’s not just customer support, it’s also about the way you show  your customers that you value them. Make customers feel like the money they spent is worth it. A loyalty program provides the perfect vehicle to do this.

But how can you increase the likelihood of a good experience with your business? The answer: make customers feel like the money they spent was worth it. A loyalty program provides the perfect vehicle to do this.

It’s all about perceived value. If a customer can get something extra for their money, besides the product they purchased, they will experience the “wow factor”. According to persuasion expert Robert Cialdini, this positive experience also invokes a desire to return the favour, grounded in the power of reciprocity. In other words, “if a customer receives positive treatment – like a loyalty program – they will be more likely to ‘return the favour’ in the form of more visits, purchases or referrals”, Smart Insights says.

  1. Maximise brand advocacy

Loyalty programs are meant for your best customers. These are the top 20% of all your customers, who drive 80% of your total revenue by spending more over a longer period of time. A well-designed loyalty program can deepen their engagement with your brand, as well as make them feel appreciated by a business. Now here is the important part, the more they engage with your business, the more likely they are to promote your brand to others. Compared to non-advocates, they are 2-3 times more effective in persuading others to purchase from you.

We all know that people love to talk about things they love. Think of traditional word-of-mouth, as a happy customer tells two people about their experience, and those two people each tell another two people. According to Entrepreneur, word-of-mouth is triggered when a customer experiences something far beyond what was expected. In addition, Nielsen states that 92% of consumers believe recommendations from friends and family over all forms of advertising – 10 times more effective to be exact.

Word of Mouth Marketing, then, is the most powerful form of advertising a business can have, as each happy customer can steer dozens of new ones their way. It is important to make it as easy as possible for them to share their thoughts with others, whether it be on social media, your website or your app.

  1. Build your online reputation

Speaking of brand advocacy, a loyalty program is also a great strategy to build your strong online reputation. 88% of customers trust online reviews, so it’s crucial to devote resources to gathering these reviews on relevant platforms.

There are two ways to do this with your loyalty program: reward your customers for leaving a review or ask your customers to leave a review after redeeming a reward. With the first, you can trade a reward (be it extra points or special goodies) for leaving a review. With the second, you are zoning in even more on the positive experience your loyalty programs brings to the customer. In this case, you wait for the perfect moment in which your customers’ feel the most positive towards your brand and then ask them for a review. When is that perfect moment? When customers have just redeemed a loyalty reward! Maybe they just received their free slice of pizza or were rewarded with $5 off their purchase. If you ask customers for a review at this positive point in time, there will be a higher chance that it will be a positive one.

App City does this with our Reviews Campaign feature, where customers get prompted automatically to leave a review through a push notification. Positive reviews will help you build a positive brand image and reputation. They will also bring in new customers who picked your business over a competitor because of positive reviews.

Loyalty Programs


A loyalty program can benefit your business in many different ways. It makes sure your loyal customers feel appreciated, as well as encourage them to come back to your business over and over again. With the data you gain, you will be able to refine your marketing strategies and tailor your loyalty program even more. Grow your business with the help of a simple, yet effective loyalty program.

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