Go for the gold! 3 ways to increase sales with loyalty programs
The Summer Olympics are over, but that doesn't mean your business can't “Go for the gold” with a customized loyalty program. No matter your industry, implementing an effective loyalty program can be a great way to attract new customers, increase sales and encourage repeat business. First, let’s take a look at loyalty program trends in various industries. Then, we will break down three ways to increase your sales using a well-designed, customized loyalty program.
Loyalty programs in the travel industry
From hotel rooms and car rentals to air flights, travel loyalty programs are some of the most popular types of rewards programs. There are already lots of travel rewards programs from which consumers can choose. But, that doesn’t mean it’s not worth launching a new loyalty program to help attract customers to your business. In fact, 65 percent of travel rewards members would switch programs for better perks; 65 percent would also switch programs for faster and/or easier ways to earn free flights, hotel rooms and rental cars
Consumers love receiving valuable goods or services for free as part of a loyalty program. Travelers appreciate being rewarded for their loyalty with services that make their lives easier, especially when they’re away from home. Check out the findings of a Mintel and AAA study on the most popular car rental loyalty rewards:
- 54% of travelers appreciated a complimentary GPS device
- 47% of travelers enjoyed flexible return locations
- 33% of travelers liked complimentary pick up and drop off services
Consumers’ biggest gripe about travel rewards programs is that they lose their loyalty points because they don’t redeem them quickly enough. In fact, 69 percent of travelers have that complaint about loyalty programs
(Source: Mintel; AAA).
Loyalty programs in the restaurant industry
Restaurant loyalty programs are another type of loyalty program that are popular among many groups of consumers. Eighty-five percent of U.S. diners would be willing to join a loyalty program at their most-frequented restaurant as long as the program is free (Source: Deloitte). Along with being free, the format of the loyalty program is also important to diners. Of U.S. consumers that participate in one or more loyalty programs:
- 63% belong to programs that offer a plastic card that is entered (or swiped) into the restaurant’s POS system
- 31% belong to programs that offer a paper punch card
- 29% belong to programs that offer a loyalty program that is linked to their smartphone
(Source: American Express; Technomic)
Beyond just benefiting consumers, restaurant loyalty programs also benefit the dining establishments that offer them. A National Restaurant Association study found that adding to or expanding a rewards program was a great way for restaurants to grow their business. Twenty-five percent of casual dining restaurateurs have realized increased loyalty from adding or expanding their loyalty program. Twenty-six percent of fine dining establishments have also seen these results.
3 ways to increase your sales with a loyalty program
1. Reward customer referrals. The oldest type of marketing is still the best: word-of-mouth referrals. When current customers refer a friend, family member or colleague to your place of business, they’re simultaneously helping you earn a new customer and vouching for the quality of your company and services. These days, referrals don’t just happen in person or over the phone. Indeed, a lot of today’s referral traffic happens digitally—be it via email, social media sharing or between smartphones.
You might be surprised to learn that 24.63 percent of online social media referral traffic comes from Facebook (Source: Shareaholic). Implementing simple rewards such as giving diners a free soft drink for “checking in” at your location on Facebook can help to spread the word about your establishment, while not cutting into your bottom line too much. This tactic can be especially effective if you’ve just opened a new location and need a cheap way to create a “buzz” in your local community. Consider loading loyalty program points onto the accounts of customers who refer someone new to your business.
2. Make your rewards valuable. If you expect your loyalty program to be attractive to your customers, you have to give them rewards they will use. If not, they may spend money at competitors who are doing a better job of offering meaningful rewards. When determining what type of rewards you should offer to make your loyalty program most appealing, consider what consumers find most valuable. When asked about what loyalty program features they find most valuable, here’s what consumers had to say:
- 79% appreciated discounts
- 71% enjoyed cash back
- 70% favored rebates
- 62% liked the ability to earn status
(Source: eMarketer; Bond Brand Loyalty)
3. Make your earning system straightforward. As mentioned above, loyalty program users quickly become frustrated when it’s difficult to earn points or when their earned points expire before they can redeem them. Consumers are more likely to join—and stay with—your loyalty program if they understand how it works. Consider a points system that, for instance, gives shoppers one point for each dollar spent at your business. Then, when they earn 100 points, they receive an emailed voucher for $5 off their next purchase. When they spend $100, they get $5 back—keep it simple so your customers can see their rewards adding up and feel they are really cashing in on your program.
Reap big rewards with a customer loyalty program
At the end of the day, the key to a successful loyalty program is making sure your customers feel valued for supporting your business. Customers who feel like a business doesn’t care if they come back or not will often spend their money somewhere else instead. Speak with your payments processor today to get started on the path to a specially tailored rewards program that works for your brand.