The Importance Of Loyalty Programs The Benefits Of Brands Offering Loyalty Programs And Why Loyalty Programs Should Be Enhanced As A Customer Retention Strategy

This essay sheds light on the importance of loyalty programs and elucidates the benefits of brands offering loyalty programs. Moreover, this essay delineate why loyalty programs should be eminently enhanced as an efficacious customer retention strategy. A new development related to relationship marketing that is likely to emerge as companies strive to be the premium solutions providers is the enhancement of loyalty programs. Today, loyalty programs are leveraged by a copious amount of companies to strengthen the customer's brand loyalty and to also retain customers as repeat buyers. The importance of loyalty programs goes beyond brands being able to earn more revenue and increase their sales volume. Loyalty programs also allow brands to foster more brand advocates, track customer analytics, make personalized product recommendations to customer based on their purchase history, attract new customers, and directly reach out to customers more frequently via email to market the latest promotions. The benefits of loyalty programs are multitudinous and should not be overlooked for companies adamant about maximizing their long term profitability. The usage of a loyalty program leads to increased revenue since increased customer retention rates culminates in boosting profitability. Additionally, implementing a loyalty program as a customer retention strategy is typically substantially less expensive than spending marketing dollars to attract new customers (Miller, n.d.). "Acquiring new customers can be 25% more expensive than focusing on retaining current customers" (Miller, n.d.). Companies can also utilize the purchasing history of loyalty program enrollees to have their product recommendation alogirisms recommend products they may be interest in purchasing in the future. Emails of product recommendations can be sent directly to the customer's email address. Brands can also leverage their "loyalty program to promote sales, special events, and showcase new products" (Miller, n.d.) via email. Loyalty programs also allow brands to have access to valuable customer data. Loyalty programs can allow companies to "track analytics and view reports, measuring the efficacy of customer loyalty on their sales. They can also measure important retention metrics like program engagement, repeat customer rate, and purchase frequency" (Miller, n.d.). Brands can utilize loyalty programs as a means to further understand the buying behaviors of their target market. A stellar loyalty program can attract more customers to shop at your retail stores (Miller, n.d.) and sway them to procure homogeneous products from your store over a competitor's store, especially when your brand offers more enticing loyalty program perks. Repeat customers that feel that the loyalty program has significant merit will be more inclined to become your company's brand advocates. "By creating a comprehensive loyalty program that allows for modern marketing techniques, you can turn your customers into advocates for your brand. Since modern consumers trust peers over advertising, fostering loyal customers who will then speak out on your brand's behalf is simply a smart business move" (Miller, n.d.). The crux of the issue with a preponderance of existing loyalty programs it that they typically offer minimal value to customers. Companies should not prioritize short term profitability over long term profitability. An enticing loyalty program can help companies secure the lifetime values of customers. The lifetime values customers is imperative for companies to secure if they want to become extremely profitable in the long haul. The successful implementation of a robust loyalty program or enhancement of a loyalty program would immensely augment the customer's shopping experience and would allow the company to foster far more brand advocates that advertently spread positive word of mouth in person and on social media platforms about the brand