Loyalty programs benefits.

Loyalty case study.

You are making a purchase at a Nike store, you choose first the product, you agree with the price and decide to go to the cashier to take it.

The cashier asks: 'Have you got Nike plus card?'. You answer surprisly 'No'. And after your answer will the cashier will overwhelm you with information, stating why you should get an Loyalty card for purchases at Nike. And for this an account must be created, within which you can get score points and receive special offers.

Once it's been created, the client will be able to obtain all it's benefits, and the seller, of course, will also get benefits.

Rules for success.

Any business that wants to be successful must follow 3 simple rules:

  1. Acquire customers that have a high probability of becoming loyal customers. Recognize what customers are unlikely to return to buy and limit marketing expenses in that segment.
  2. Recognize what customers are unlikely to return to buy and limit marketing expenses in that segment.

Focus your budget on marketing campaigns for clients that demonstrate similar characteristics to those showing their recurring customers, to attract and retain well.

And what are the benefits provide by a loyalty program from the point of view of a seller?

By having a large number of registered customers, you can with analytical tools follow each of its steps: what moves them closer? What pushes them away? And based on this information, create content that generates positive response towards generating brand loyalty.

Here are some examples of information that can be collected and some actions to take with her:

Existent client retention

The effect of the retention rate of actual customers can not be overestimated. In 5 years, a company with a 70% customer retention will have lost of between 2 and 3 times in comparison of with a company that loses 90% customer retention.

Not just a loyalty program can provide a practical and useful to purchase (points accumulation, service improvements), but it can provide information about clients who want their needs to be satisfied efficiently and effectively right. This, in turn, increases the chances of retaining them. Also, as demonstrated by various studies, enthusiasm and engagement increase once the client begins to use and receive those rewards.

In addition to the fact of retaining customers, information obtained through loyalty programs can be used to improve the focus on customer needs. Companies use this information in order to segment your customers in your next marketing campaign, sales and services. But customers are more complicated than this. Their desires and needs differ from one moment to another, depending on the occasion and on the reason why they made ​​the purchase. In other words, the user is 'divisible'.

That's why marketing can dig deeper than what can be seen with the simple eyes. You may identify changes in clients needs and after that provide perceived benefits depending on given situations.

Acquiring new customers

Moving customers to higher value segments

By classifying rewards (for example, offering bonus points to customers who exceed spending 'x' value over a period of time) , customers can move from one segment to another ('customers who spend x' to 'customers spend 2x')

Dismiss unprofitable customers

It could be more profitable to lose bad customers than winning new ones. John Sandler, who only buys high discounts products with, can cost money, like any client of that style. Typically they cost more money than what they generate. Creating a loyalty program that rewards good customers without rewarding that segment will give less reasons to stay. Obviously there are cases where it's better to retain those customers, even at the cost of losing some money, it's in you to do this analysis and decide.

The chance of recovering lost customers is usually 3 to 4 times higher than the acquisition of new customers.

There are several reasons why recovering clients give higher chances of adcquiring new ones. For example, for the first accounts with information of their past purchases, at what hour they were made, where, etc, and not for new clients.

Increase Customer Lifecycle

The life cycle of a client is being increasingly recognized as the most important parameter for measuring the value of a customer. This will be used to show whether a loyalty program is working or not.

Best Customer Marketing

BCM means taking more time, effort and money on your 'best customers' so that the return on marketing investment is maximized. It's usually the main force on which you focus your loyalty program today. The 'best customers' are those who contribute most to their business, they are the core that makes business sustainable and profitable, and they often reach the bulk of their income.

Word of mouth

Word of mouth is the biggest proof of loyalty that a customer can show. These customers are so satisfied and pleased with their service, that they'll talk to friends and associates to let them know of your product.

For most, a personal recommendation is far more convincing than any promotion they receive, even if you already rely on the company and the best for your mobile commerce with app too.

Price adjustment

A loyalty program can help formulate a pricing structure. If there are enough 'best customers' happy to buy your product at a certain price, it would make sense to lower the price to attract a few unimportant customers.

In addition to helping determine the best price, you can evaluate the results and see which segments buy more or less depending on the price change and if something gradual or instantaneous.

Response to competitors

A good loyalty program allows you to quickly identify if some active clients begin to be inactive customers and then to study if it is because of new competitors in the area. And when identified, you can respond to them, creating special offers for specific area.

Select stock lines effectively

Knowing what your 'best customers' usually buy can help you make decisions regarding the stock you have. If you know that your best customers usually buy a certain amount of X product over a month, it is good to be prepared and have a minimum stock that allows always have the product for these customers.

Reduce promotions and advertising costs

Knowing in what segment your most loyal customers are, you will easily know what target you should aim, saving misguided campaign expenses.

And best of all is that a loyalty program is NOT expensive. When you wonder about loyalty programs, imagine a significant portion of its resources being intended for a program that may or may not be successful. But the reality, as explained above, is that to keep an existing customer with these programs has a vastly lower cost than finding new customers, and it may generate many repeated customers, which are the best and most profitable.

Loyalty to the app.

Now see how you can use the app instead of loyalty cards:

It's as simple as installing your app, and creating an account. Ready, that simple.

All the information may be recorded through the app analytics, and you will be capable of doing whatever you want with it. You'll observe the purchase moments, the place, amount, which device was used, the entire customer data and more.

So next time someone enters your store, you will ask:

-Do you count with an app for our store?


-If you scan this QR code (for example) you'll bw able to download our app. You'll obtain a discount of 10% in your first buy and get free or one time discounts.


That way you'll easily get your customers to download your app, and from that day on you may have an analytical follow up of their actions within the app, see what you like, what products are being observed. After that you'll start launching campaigns, products content of interest to that person, increasing sales and generating unmatched value to its mobile commerce with app.