Retention marketing is your key to loyalty program success. It’s cheaper for your company to implement, it’s a nice reward for your customers, and it brings you ongoing, returning clients. According to Social Annex, customer acquisition costs 500 times more than customer retention does. Plus, there are a whole lot of other benefits to customer retention, which we’ll discuss below.
But, many of you may be wondering what retention marketing is exactly, and how you can apply it to your business. Below, we’ll tell you how using consumer incentives helps to boost customer acquisition and retention rates—helping you to master the art of retention marketing.
Customer Retention and Acquisition
Retaining your current customers is incredibly important. Many companies focus solely on bringing in new customers and they tend to forget about their returning customers. Unfortunately, this is where many marketers go wrong. According to Social Annex, loyal clients are worth as much as ten times their very first purchase; however, new customers tend to spend less on their purchases and they are less likely to refer a company to peers. Without referrals, reviews, and positive testimonials, it’s more difficult to acquire new customers.
On the other hand, returning customers spend more during each visit, are more likely to return in the future, and they are more likely to share their positive experience with others. So, not only does customer retention keep your current clients happy, but it also works to bring in new customers at the same time.
The Three Types of Consumers
To master customer retention and acquisition, you need to have a quality loyalty program that sets you apart from the competition, and appeals to three different types of consumers. These three types of consumers are the experience-driven consumers, the value-driven clients, and the price-sensitive shoppers.
You see, the first group of consumers that loyalty programs appeal to are the customers who may be looking to experience something new and exciting. They are looking to step outside and try something new. Secondly, loyalty programs attract the customers who are looking for a good long-term value.
However, value-driven shoppers are not to be confused with price-sensitive shoppers. Value shoppers look to maximize the value of each purchase, while price-sensitive shoppers look for the lowest price on each purchase. Value shoppers are more likely to look at how the product, company, or loyalty program will benefit them in the long run, while price-sensitive shoppers are looking for the lowest possible price—but not necessarily a long-term benefit.
But the best part about having a good quality loyalty program is that loyalty programs appeal to all three of these consumers — the customers who are looking for a new experience, a good value, and those who are price-sensitive.
Consumer Incentives Are Key
Now that you know the basics of customer retention and acquisition, we can focus on how to make this happen. The secret to creating a sizzling loyalty program that entices new clients and keeps ongoing customers around for the long-haul? Loyalty programs that offer incentives and rewards.
But, you may still be wondering who to reward and how to go about doing so. Since returning customers are more likely to refer your company name to friends, family, and colleagues, why not reward them for helping you out? When you reward your loyal customers, you’ll meet your customer’s desires to try something new, get a great deal, and experience the benefit of a low price. Plus, they’ll be more likely to refer you on an ongoing basis you if they think they’ll continue to be rewarded. See how that works? You reward your customers with a gift card, loyalty points, or a free product or service, and they reward you by referring you to friends and family.
Additionally, rewarding the consumers who talk about you on social media is another great way to keep your current customers happy, while also encouraging them to talk about you on social media for exciting rewards, points, or freebies. Thanks to social media, referrals are easier than ever.
How Mpell Solutions Can Help
Now that you know how loyalty programs can boost customer acquisition and retention, you need to get started on creating your own loyalty promotion. This is where Mpell Solutions comes in. Our irresistible Visa, MasterCard, and American Express gift card promotions are perfect for bringing new customers in and getting them to stick around. Additionally, we offer gift cards for travel, shopping, electronics, and much more. All of our programs are all inclusive; we handle customer service, fulfillment, reporting, and automation to make the process as easy as possible for our clients. Contact us today to get started!