Brand loyalty programs are one way to reduce your customer churn rate – the rate at which customers stop doing business with your company. For most brands, keeping the churn rate in check makes a huge difference as it is much cheaper to retain existing customers than it is to gain new ones. In fact, according to Harvard Business Review, the cost of bringing on new customers is 5 to 25 times more expensive than keeping current customers satisfied and an increase of just 5% in customer retention rates can increase profits by 25-95%!
Brand Loyalty is Maintained, Not Earned
A stellar product and exceptional purchase experience may lead to satisfied customers and positive reviews, but that may not be enough to bring them back for more. Forbes reports that “60-80% of customers who describe themselves as satisfied do not go back to do more business with the company that initially satisfied them […] often due to a lack of connection.” Meanwhile, the American Management Association has found that customer satisfaction is not enough, as rationally satisfied customers are virtually indistinguishable from dissatisfied customers. Clearly it is not enough to exceed purchasing expectations when what we really need is to build a connection that emotionally satisfies our customers.
Brand Loyalty Programs – Positive Reinforcement Meets Tribalism
When Entrepreneur considered the psychology of brand loyalty, they found 2 key takeaways – every positive experience makes customers more loyal to your brand and a sense of community identity (tribalism) with your brand forges an emotional connection that is nearly impossible to break. One way to incorporate a series of positive, branded experiences is a brand loyalty program. Here are a few statistics from the 2016 Nielsen survey on retail loyalty program participation:
- Customers Love Brand Loyalty Programs – 72% choose to buy from a retailer with a loyalty program over one without. 67% shop a retailer more frequently – and spend more when they do.
- Customers Engage with Brand Loyalty Programs – 76% are eager to earn rewards for specific activities, while 67% appreciate rewards for referrals.
- Customers Enjoy Earning Status with Tiered Brand Loyalty Programs – 60% appreciate tiered programs with exclusive rewards for customers in a particular level or status.
- Customers Want Gifts and Swag from Brand Loyalty Programs – 27% prefer exclusive access to sales/merchandise or recognition as a valued customer from a loyalty program. 79% value the ability to choose among several types of rewards.
When Yotpo polled 2,000 consumers in the United States, they also found that nearly half of shoppers (45.8%) are specifically looking for gifts and swag as a part of a brand loyalty program.
BrandHub Online Company Store as a Brand Loyalty Program
Clearly, we need to retain our customers by maintaining an ongoing connection that emotionally satisfies them. Thankfully, the Nielsen survey has shined a light on what people love most about brand loyalty programs, giving us the ability to leverage the features of our BrandHub Online Company Stores in creating effective brand loyalty programs.
- Hassle-Free Start Up – We do all the work of setting up a brand loyalty program with one of our BrandHub Company Stores and will manage the distribution of rewards. All you need to do is select which branded products you want to see your most loyal customers using or wearing.
- Stackable Coupon Codes for Redemption – Give customers a range of opportunities to engage with your brand and reward them with redemption codes for various activities or referrals.
- Create an Exclusive Experience with Choices – Select from several templates that will help make your brand loyalty program feel like a completely unique experience where customers can gain access to a variety of rewards not available elsewhere.
- Reward Tiers with Product Collections – Select branded promotional products from a wide range of price points to ensure everyone feels rewarded while those most passionate about your brand are driven to earn big-ticket prizes.
- Learn as you Grow – A wide variety of store analytics and reporting is available to help refine product selection and categories for greater impact.
Get Started on Your Brand Loyalty Program Today
Rewarding brand loyalty is a no-brainer. Why not engage your customers in a way that encourages them to strive for chances to further promote your brand? Contact Us or fill out the form below to explore our turnkey solution for retailers who want to start a brand loyalty program.