An effective loyalty program can do many things for your business, even on bad days. Many business owners who have tried this out can testify to this as they have experienced its impact in more ways than one. However, some business owners have judged not from experience but from hearsay and have concluded that it might be best to avoid allocating resources and time to these promotional efforts as they are supposedly not worth it.
Experts at promocodius.co.uk, specializing in all sorts of promotional efforts, have revealed that most of this information or misinformation dissuaded business owners from considering these promotional efforts are myths. The experts have revealed some of the most popular myths about loyalty programs and why they should be ignored.
- Loyalty programs are costly
It is better to start with nothing you need to spend to make money as a business owner. Whatever you want to do to attract costumes will cost you some money, regardless of how little it might be. On that note, Hubspot experts argue that loyalty programs at the cheapest promotions a brand can have and generate the most profit, as a simple 5% increase in customer retention can generate a 25-95% increase in gross margins.
- You need to have a big audience before you can start a loyalty program
This is one of the myths that have led small businesses to avoid curating programs. Truly, more customers in your business equal more potential to have more members. However, this does not mean you must wait until you have a massive audience before starting a loyalty program. Experts at Promocodius argue that the best time to start a loyalty program is when your business is set up. The sooner these programs are started, the better it is, as this enables you to access every important data needed from the start of your business, even as it continues to grow.
- Loyalty programs no longer motivate customers
Numerous surveys and experiments have been conducted in this regard, revealing that this is false and misleading. Over 80% of online shoppers all over the world are known to be highly interested in promotions and discounts as they are good solutions for affordable shopping. To be more precise, the Zendesk study shows that 72% of global customers are loyal to at least one company or brand. A study conducted by Hubspot found that UK shoppers alone hold over two billion memberships to loyalty programs, proving that these shoppers are still very interested. In addition, most of the shoppers noted that they would rather shop from brands offering these loyalty programs and promotions.
- A loyalty program sells itself
Several times, many brand owners have fallen for this scam, which explains why they try out one loyalty program and eventually conclude that it is profitless. Because you created a loyalty program does not mean it will find its way to attract patrons worldwide. It is as good as starting a business and refusing to advertise or market what your business offers and still expecting people to magically find out about it.
Putting an effective marketing strategy in place is just as important as creating the program. Truly, a 5% increase in customer retention results in a 25% increase in profit with a good loyalty program in place. However, you should fully understand why you are doing it, how it works, and how it benefits your business for your marketing strategy to be effective. If you fail to do this, that doesn’t lead to the conclusion that loyalty programs are unprofitable. It only means you did not understand what you were doing and how to make it work.
