Loyalty programs are about building relationships with clients

Loyalty Programs involve diverting some of your advertising spend to apply it towards rewards for regular shoppers.

The theory is that it costs far less to maintain a shopper than to get a new one.

When first embarking on a loyalty programme the mind tends to focus on the expense of administering the system rather than the value you receive by implementing it. One of the fundamental truths about business is established by thinking about the lifetime value of a customer.
Loyalty programs are about building relationships with clients 1

The lifetime value of a client

We often measure our business results by our daily, weekly or monthly turnovers but what about the lifetime value of a client.

As an ex retailer this is something very close to my heart. Bankers know that clients don’t often change and the lifetime value of a banking client can be enormous.

What ever your industry, add up what a client is worth to you over a period of a lifetime.

If you are in real estate then you will know someone purchases a new house every seven years or so. What is that commission worth to you if you help the person sell their home and find another for them every seven years vs the opportunity cost lost if your client goes elsewhere.

Grocers, when adding up a customers spend over 20 years are astonished to realise how much that client is worth to them.

Similarly I am sure that you will be surprised when you do this exercise no matter what your industry is.

Keeping a client loyal is a highly profitable strategy.

The Online Marketer outsources it’s loyalty programme

Let’s pragmatic here. We are a small business and most of our clients are medium sized businesses. We have to compete against the big boys and they have massive resources, marketing departments staffed by highly paid individuals, expensive computer wizards and mega computers.

Think of any successful large retailer and I bet they have a loyalty programme.

Why do they do it?

Loyalty programmes work.

But loyalty programmes are expensive to run. So it makes sense to outsource. We looked at every option available to us and we chose the Lyoness Cash Back merchant programme. We are also accredited merchant marketers for this programme. We use it ourselves and advise our clients on best practices.

We would be happy to explain the benefits and costs of this programme to you.

Download our free Loyalty Proposition Report



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