Loyalty or Discounts – Answer to the long awaited battle
Businesses are practicing a wide range of tricks and strategies that attract customers. With an increased customer base, companies have higher chances of improving their profits. Thus, businesses are turning towards promotional offers as a way to increase sales for a certain period, enticing customers to make purchases with various discounts that include coupons and vouchers. Though they are succeeding in attracting customers, they are failing in retaining the customers or gaining brand-loyal customers.
What can we do to tackle this scenario?
Taking the Sustainable Approach
Offering coupons is not as viable as loyalty programs because it doesn’t guarantee a repeat purchase from the customer. Whereas, implementing a value driven loyalty program can help in the sustainability of market competition and help you drive value.
True loyalty is emotional and irrational and leads to customers feeling like they’re part of an exclusive membership group which then leads them to become loyal subscribers or consumer network participants. People appreciate being part of a club and feel the fear of missing out when they’re not. Loyalty programs create a win-win situation for both the brand and the customer. Shoppers get rewards for the purchase – they will make frequent purchases to access more rewards. Eventually, they become loyal to a brand.
Remember that you are a branding your loyalty program by name (not a discounted number)
One of the advantages of loyalty programs is that the communication is personalised. This makes customers become regulars to your brand. Differentiate your brand by choosing a name for your loyalty program that tells people who you are and what you stand for.
Always give value (not more of the same)
Reward customers for on-site behavior such as social follows or signing up to your loyalty program, and not just purchases. This way they’ll see the immediate value of your loyalty program before they have to start spending with you.
Your aim is to build trust (rather than slash prices)
Often, trust is lost with “too good to be true” discounting. Customers are attracted to purchase from you only because of the low prices offered rather than building that trust and loyalty with you. When your prices hit back normal, these customers will go in search of alternatives or await until the next discount sale to purchase from you. Hence, focus on building the trust with offering back value to the customers in terms of loyalty rather than discounts. This shows you’re paying attention to their needs and that you care about them beyond the short-term sales period – and they’ll give you their long-term loyalty as a result.
Besides, these days, businesses are using loyalty program software on a serious note. They use softwares to track users’ activity and reward them accordingly. Loyalty program softwares is a widely accepted approach that helps to gain loyal customers. A company with more loyal customers can sustain market competition. Furthermore, loyal customers are an asset to the business – they not only make frequent purchases in your store but also play an essential role in mouth marketing. It is a top most alternative to retain brand-loyal customers.
It’s time to stop the short-termism of discounting and start building a brand that secures long-term identification and loyalty. Slashing prices is not a viable competitive answer for retailers: in many ways, it’s a problem. We need to move away from unsustainable business models and towards fostering loyalty to secure sustainable growth. And, the best place to start is by fostering emotional connections, building loyalty and adding value.
Our take on Loyalty or Discounts – Stop throwing offers and start building loyalty.