• Jerry Hall

35 Facts | Why it Pays to Have a Loyalty Program



Do you want to increase the revenue of your business? How would you feel about increasing the amount repeat customers spend instead of trying to continuously attract new customers? Have you thought about starting a loyalty program?

As you’ll see, loyalty programs have been proven to keep current customers coming back and improving business revenue. Plus, having a snazzy loyalty card for your customers to carry around is a great chance to do a little extra advertising.

If you’re on the fence about starting a loyalty program for your business, this article is for you.


Growing Pains


Spending your time acquiring new customers can be expensive and not necessarily worth your time. Think about the time and resources needed to go into gaining new customers, inbound and outbound marketing teams, the salaries to pay those team members, the advertising cost of social media, and the list goes on. All of that just to impress the “I’m just looking” crowd.

Here are some facts:

  • It costs 500% more to acquire new customers than it does to keep current ones

  • 82% of companies agree that retention is cheaper to execute than acquisition

So why not spend more time and energy into customers who have already proven they like your product. Those that have spent actual money with your business.


Show a Little Love


Give those that buy from you a ‘Hey, we noticed you bought something let us reward you’… This kinda love is how you turn customers into loyalty members of your brand and product.

Try these on for size:

  • 87% of shoppers say they want loyalty programs

  • 23% of shoppers said that their loyalty to a company has increased over the past year

because of a loyalty program

The top two benefits that motivate consumers to join a loyalty program are:

  • the ability to earn points/miles on purchases (56%)

  • and the offer of discounts on purchases (55%)

Offering your customers rewards for making purchases is a great start. I don’t know how many shoe stores people pay the rent for just to earn points towards free pairs. But there is more to building your brand and customer retention than free shoes… it’s building relationships.


Building Relationships


Do you think that a customer who receives a bad experience in your store will come back and buy from you (or that salesman) again? Even if she has a loyalty card? What is keeping her from signing up next door for their loyalty program and shopping there? I’ll go ahead and spoil the joke…The experience that you provide while she’s in your store.

Think about this:

  • 76% of US shoppers think that loyalty programs are part of their relationships with businesses

  • More than 50% of shoppers say they would pay a higher price for the customer experiences they value most

  • and 77% would be more loyal to stores that provide their personal top three customer experiences

  • Lowering your customer churn rate by 5% can increase your profitability by 25-125%.

A happy customer with a reward card in hand can prove to be a profitable tool for your business.


Return on Your Investment

Repeat customers means repeat purchases and that can mean a growth in your revenue. Businesses who implement a loyalty program and also spend the time training their staff to provide a memorable experience for their customers see results. Repeat customers means repeat purchases and that well…


Let’s see the numbers:

  • 75% of US companies with loyalty programs generate a positive return on investment

  • 64% of retailers say that their loyalty program is their best method of connecting with customers

  • Loyalty programs increase overall revenue by 5-10%

  • Loyalty program members buy 5-20% more frequently than non-members

  • 53% of Americans participate in a loyalty program because of ease of use

  • U.S. consumers hold 3.8 billion memberships in customer loyalty programs

  • Loyalty membership growth continues, but has slowed to 15% compared to the 26% growth rate achieved in 2015

  • Loyalty Program enrollment has grown by 31% over the last four years while active engagement rates have remained flat

  • Loyalty program member satisfaction remains steady year over year at about 46%

  • 39% of U.S. consumers participate in a loyalty program because they give great discounts

  • 37% of U.S. consumers participate in a loyalty program because they are easy to understand

  • 57% of U.S. consumers will abandon a loyalty program if it took too long to earn points or miles

  • 26% of North American consumers will stop using a loyalty program if it doesn’t have a smartphone app

  • 56% of brands automatically enroll customers into their loyalty program at account signup

  • 51% of Americans trust loyalty programs with their personal information

  • 70% of shoppers said they belonged to between one and five non-grocery loyalty programs

  • 16% of shoppers don’t belong to a loyalty program of any kind

  • 24% of shoppers use the rewards they earn

  • 43% of shoppers say rewards expire before they can be redeemed

  • 38% of shoppers say they never knew if they had rewards available

  • Redeemers are twice as satisfied with loyalty programs as non-redeemers

  • 71% of shoppers say they would be more likely to use their loyalty cards if they could access these cards and rewards from their mobile phone

  • 81% of consumers agree that loyalty programs make them more likely to continue doing business with a brand

  • 86% of consumers who like a loyalty program will shop more, and of those, 58% will shop 15% or more with their retailer/brand of choice

  • 73% of members are more likely to recommend and say good things about brands with good loyalty programs

Be sure to click on Loyalty tab and Pricing tab (top page).

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