To increase profits, different businesses and banks would focus on attracting new clients. But they also need to pay attention to current clients that are already interested by offering premium services that will help retain them and increase their loyalty levels.
The quality of the main services is one of the things that will help build good relations with customers, but they will look for more. Many places may offer the same quality, so what would distinguish each organization.
Launching loyalty programs that give clients additional benefits for making a bank or a business their favorite choice each time they look for services is a great idea to show clients that they are important and valued.
What Is a Loyalty Program?
For years, the question of how to encourage already existing clients and increase their loyalty has been the concern of many institutions.
Later, loyalty programs became an essential part of marketing strategies. The concept is simple; clients are rewarded for an action that the institution wants them to take. It may be making a purchase, spreading the word about certain services, opening a saving account in the case of banks, and many other things. This approach is great in retaining clients and eliciting specific actions from them.
The most popular type of loyalty programs is the “Earn and Burn” one. With this kind of loyalty programs, clients earn points in exchange for an action they took then they can redeem the points they earned for one of the rewards that the loyalty program provider would offer them.
For instance, many banks’ clients earn points in exchange for any purchase they pay for using one of their credit/debit cards. Clients would use these points to get free traveling miles, discounts, and offers.
What Are the Benefits of Loyalty Programs?
Better Customer Experience
Knowing that their actions are valued and the feeling of anticipation and excitement they get when knowing they will be receiving awards for using a service or purchasing an item work magic on the customer experience and improves the institution’s relationship with customers significantly.
It is a known fact that attracting new customers costs more than trying to retain existing customers. Current customers’ needs have already been understood and met. All they need is a little gesture to keep them engaged and keep the profit coming. Through loyalty programs, customers will stay motivated to buy goods and pay for services. This will increase profit with reduced costs.
Reach New Customers
As mentioned above, loyalty programs concentrate more on preexisting customers. But satisfied clients make a great advertising and marketing option.
In a world dominated by technology, word-of-mouth will spread faster. People trust personal recommendations more than any other marketing method. If the institution managed to keep its clients happy with good service and added to that a good loyalty program, clients wouldn’t hesitate to talk about them to friends and family members or even post about them on their social media accounts. This will help in attracting new clients and subsequently increase sales and profit.