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Are you doing all you can? The impact of loyalty programs on business.


When assessing your business and the position you are in, have you stopped to consider if you are doing all you can? This might not just be a matter of working the hardest, but working in the most conducive way that will allow you to achieve your goals. If you are a close reader of our articles, you probably have noticed the emphasis we place in building customer relationships. Particularly when we assess what impact they can have and why they are so important. Previously we have already written about the fact that the recipient can become an ambassador of your brand. We also went into detail on how important it is to strengthen ties in a competitive and changing business environment. As a new day dawns, in this article we want to focus on specific indicators that the introduction of a loyalty program in your company can change.  

First: An increase in sales

Though it may seem obvious, this is a great place to begin. After all, it is the increase in sales of products and services that is most crucial for you and the hallmark of a successful business. This is also the purpose when implementing a loyalty program. 

When addressing the foundations of a loyalty program, the bricks and mortar are the relationships that you create with your client base. This allows you to retain customers who have chosen your company so far but it also further expands the  reach to the group who may have tried your product before and wish to return for repurchase. The program in itself provides knowledge which allows for effective strategy, promotions and communication but also gathers data about your customer base. Furthermore, it allows you to connect specific audiences with an interest in a specific product. This further creates indicators of which products are in demand and as a result, allows you to effectively sell the products that are most sought after.

Customer Lifetime Value (CLV) and an increase in the average value of receipts – indicators that you can improve thanks to loyalty programs

Not too long ago, in one of our previous articles we discussed the implementation of CLV that was conducted with the BRIJU brand, our client. In that article we explored the success of the implementation of a CLV plan and it’s execution.

Customer Lifetime Value or the CLV acronym, determines what value a customer has for your business over their entire life cycle. The measurable outcome of CLV is to increase the expenditure of customers, increase the number of transactions and to increase customer repurchase. With these outcomes in mind a loyalty program will help you plan out a strategy and achieve these goals. With a customer loyalty program its application will make it easier to retain customers by creating a customer-to-brand relationship which will encourage members to make further purchases. This can be facilitated by granting a discount or an attractive prize. Secondly – it will enable you to manage the relationship with the customer in a more conscious and thoughtful way. With well-developed analytics, you will be able to plan the entire cycle of communication and offers addressed to your customer base, but also creating more avenues to be able to interact with them. 

Another of the indicators raised by the BRIJU brand representative is the increase in the average value of the receipt. Why is this important? Why should you care? In practice, this means that, on average, each buyer will spend a little more on a one-off purchase. For the same amount of trades, your profits will increase. Quite simple maths really. 

How can a loyalty program contribute to this? Thanks to the marketing mechanisms, loyalty programs will allow you to present and reach your recipient with offers and promotions – which will entice them to be more interested in the line of products you wish to sell. Thanks to numerous prizes and benefits, it will also encourage larger purchases. After all, each transaction or use of services means that a loyal customer is closer to reaping greater benefits from the loyalty program. 

Complementary sales support and highlighting the selected offer

Another important indicator that will help increase the use of the loyalty program is the support for the sale of complementary products and services. When you think about it, who doesn’t like free stuff? 

An attractive program will encourage greater purchases. It will also allow better contact with your customer, thanks to which there will be a real chance to show your customers selected offers that also provide them with complementary products and services. Moreover, this will further increase the emotional bond with your brand and company as your customer base feels as if they are being rewarded for their continued loyalty.

A well designed program can also help draw attention to the particular offers you wish to present. The customer may be rewarded with products of his choice from the brand’s assortment – this is one of the options available in THE BODY SHOP program that is available currently in the domestic Polish market. You can also encourage your customers to use a given offer by rewarding this type of behavior with more points in the loyalty program. Thanks to this, your customers will be more likely to reach for offers that at one stage or another, maybe thought that they were less interested in or perhaps too out of reach. This new behaviour and exploration of new products can further drive sales, as a customer can be drawn to a whole new range of products.

As you can observe, a well designed program translates into real growth of the relevant indicators we have presented today. Do you want to implement this type of solution in your company? Well we invite you to contact us and together, we will prepare a solution that will get your business to the next level. 

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