Loyalty programme as a tool for building customer trust
A loyalty programme is one of the main tools for customer retention. According to surveys, 7 out of 10 consumers consider it the most important factor in their commitment to a brand. This demonstrates the need to include such a system in almost every company’s promotional strategy. In addition, this approach will increase the company’s competitiveness and positively impact its image.
Such programmes involve offering rewards to the company’s regular customers. These can include discounts, free offers, points and other incentives. The aim is to encourage customers to make repeat purchases. Rewards also help to strengthen the bond between customers and the brand, increasing trust and commitment.
Benefits of the tool
A loyalty programme gives consumers a sense of uniqueness. Companies often offer their loyal customers exclusive access to new products. This is a great way to increase sales. However, the number of purchases is not the only plus point of this strategy. Such programmes have some other advantages, including:
- Referrals. Repeat customers are likelier to recommend the brand and its products to their friends and family.
- Increased customer loyalty. Such programmes increase consumer confidence and reduce the likelihood of them defecting to competitors.
- Increased sales. Research shows that 80% of consumers are more likely to buy when they are part of a rewards programme.
- Protect brand reputation. Loyal customers protect the company from attacks by detractors or in conflict situations.
Given the benefits described above, such schemes are an effective way of promoting business. In this case, word of mouth works well, providing a regular flow of consumers.
Types of incentives
Companies use different types of loyalty schemes. Here are the most popular ones:
- Bonus schemes. These allow customers to accumulate points to exchange for gifts or discounts on purchases.
- Multi-level programmes. The rank a customer holds in the system determines their value. The higher the level, the more rewards the participant receives.
- Paid systems. In exchange for a fee, the customer receives various benefits. These can include exclusive access to products, the ability to use them for free, and others.
- Value-based. In this case, the customer and the company adhere to deeper, socially-oriented principles. Such a programme may involve donating a percentage of purchases to charity.
When choosing a particular version of the programme, it will be useful to study the techniques used by competitors. There are also a number of ways to communicate with customers. For example, you could conduct a survey or questionnaire to find out the preferences of your target audience. This will increase the chances that the programme will interest consumers and produce the desired results.
