Successful companies invest time and money not only to attract new customers, but to keep the current ones as well. Studies have shown that attracting a new client is 25 times more expensive than keeping the existing clients, which means the marketing investment made for maintaining the existing clients is far more profitable.
Improving customer retention rate will always result in higher profits for the company. The 20/80 rule applies here, which means 20% of the existing clients will generate 80% of the company’s profits.
A loyalty program is the best way to maintain a long-term relationship with clients and partners. Basically, rewarding customers for repeat purchases and partners for reaching certain performances in selling the product are ways to build a relationship meant to last.
However, it is a big challenge. How can you create a long-term relationship using your rewards program?
A popular idea is that B2B clients choose a brand or a company for rational reasons like instant offers or volume discounts. We agree with that, however we think there’s more to it.
Consistent prizes. Cutting off prices, rebates or spot offers are money savers and quite attractive, but they have a time limit. This type of promotion is a channel incentive type in which the customers take action only on short term. The disadvantage is that you cannot build a long-term relationship using this type of mechanism. Furthermore, it can be easily copied by the competition.
A program through which clients accumulate points and have the option of choosing the products they are interested in from a personalized catalogue are important elements for the customer. The consistency and uniqueness of the catalogue products will influence the perceived value of the program in the eyes of the customer. A successful prize catalogue is the one we created for Rewards Direct. It is being used by over 150 clients because its perceived value is very high.
Creating an emotional bond. Customers often choose to stay in a program because they feel part of a community and have developed a strong emotional connection with the brand. If you are a salesman, you have probably been in the situation where customers have chosen some other brand over yours, even though your offer was better.
An emotional connection is created when the customer feels that he’s receiving a complete experience that is based on motivation, communication, genuine interest in their business and access to useful information. It seems hard to believe, but many customers make purchase decisions based on emotions. A brand communicates and is actively present in the day to day life of their clients and partners.
Access to the program. The easier is the program to access, the more trustworthy it becomes for clients and partners. Access from mobile devices is crucial and the program must be present online as well.
Clients and partners must always have access to their account, their messages and notifications sent via email, access to accumulated points, news or the prize catalogue. An integrated communication where a simple click on an URL received on email, WhatsApp or text message leading the user to the desired page is an important component of a successful program.
Just as important is the time it takes for the page to load. It must be very fast so that the users don’t lose interest and leave the page.
Loyalty programs are an excellent way of creating a long-lasting relationship with your clients and partners. All you have to do is follow our recommendations above, add a sprinkle of creativity and constant communication. Long term bonds are built in time and with consistency.