Australians love a good loyalty rewards program. In fact, recent research has shown that nine in 10 Aussie shoppers have at least one loyalty card in their wallet or purse.
Of those programs, retail is king with 79 percent of shoppers having a loyalty card(s) for their favourite business, while frequent flyer programs (50 per cent), financial institutions (43 percent) and restaurants (28 percent) also rated highly.
These programs have proven to be a critical way for SMEs to retain customers, with 55 percent of shoppers saying they were more likely to recommend a business that had a loyalty program over ones that do not.
Why retention is as important as acquisition
While gaining new business is critical growing a business, it is also cost-effective and as beneficial (in most instances) to focus on retaining the customer base that you already have.
According to the research done by Frederick Reichheld of Bain & Company, it can cost up to five to twenty-five times more to acquire a customer versus retaining them. Loyal customers will make repeat purchases on a regular basis and often on a larger scale than new customers, and you can track their buying activities to make additional sales by offering products and services that match their habits. Customer retention of five percent can help with increasing profits by twenty five to ninety five percent.
Focusing on retention also slashes advertising and marketing costs, as loyal customers are already well aware of your brand's personality and products and services on offer.
Regular customers are less likely to be bargain hunters as well. Because they know and trust your business they are more likely to pay a premium price for a premium service.
And through the relationships forged with loyal customers, you can gain invaluable (and honest) feedback that can help you grow and improve your business.
The customer retention model that works
There are many methods Small to Medium Enterprises (SMEs) can employ to retain customers, including managing expectations (and adapting to needs accordingly), blogging and social media content, personalised products and services and sharing testimonials and case studies.
But one of the best ways to retain customers is to offer loyalty programs that reward them for their repeat patronage.
Deloitte research has shown that loyalty programs was one of the key reasons for remaining loyal to a brand at 26 per cent, sitting just behind the overall customer experience at 27 per cent. Which highlights how important these programs are in retaining your customer base.
How Liven can help you retain your customers
One of the main downsides to loyalty rewards programs is the volume of cards consumers are expected to carry. Weighed down by cards from their favourite retailers, restaurants and other small businesses, they may be reluctant to add to the pile.
Liven offers a solution. When a restaurant joins the Liven partner network they tap into an established cross-brand loyalty solution network. It’s simple: customers get a reward incentive based on their bill amount per transaction and can spend that reward cash at any Liven partner venue. This helps our partners with retention and customer acquisition, as Liven users will discover them through the app and can can use their reward within a network of 1,000 and growing venues. Find Eat Earn Repeat.
The benefit for customers is this is a holistic method Liven to accrue rewards across a range of different businesses without the hassle of multiple reward programs, but still providing distinct benefits for each business.
Click here to learn more about Liven for Merchants.