Karina Foo
The unspoken/untold secret to unlock retail success
Let’s face it: 2020-2021 have been brutal and proving hard to survive for many business owners.
You could be one of them.
The once booming and flourishing retail strips in many suburbs we know and love are now barren, with many shops closing their doors for good.
Covid-19 may eventually cause the demise of an estimated 160,000 of Australia’s 2 million small businesses, says Judo Bank.
Even without the virus, 97% of Australian businesses eventually fail with more than 60% throwing in the towel within their first three years, according to the Australian Bureau of Statistics.
With such a dire outlook, one thing we can be thankful for is that we’re still in business, albeit the slow down. But we know that this pace cannot sustain us.
Competition is slowly building up, customers have become more savvy and discerning, and we have to deal with the ever-increasing prices of business operations.
It almost seems impossible to run a business without running ourselves to the ground. However, you can emerge successful with all odds against you – get ahead of the competition and win back your customers easily at a minimal cost.
The answer: a solid, simple and sustainable customer loyalty program. Here’s why in more detail:
1. Get repeat customers and boost your sales
Loyalty programs are more cost-effective for you to retain happy customers than it is to constantly try to acquire new ones. By simply increasing your customer retention rate by 5% your profits can be amplified by 95%.
In addition, research has shown that loyal customers spend 67% more than new ones.
“Simply by increasing your customer retention rate by 5% your profits can be amplified by 95%”
You may be wasting valuable time and money constantly chasing “new leads” because acquiring new customers are 5-25 times more expensive than retaining current ones.
New customers referred by your loyalty members have a 26% higher retention rate. Apply the 80/20 rule: when 80% of your business is generated from 20% of your customers, you can see why a customer loyalty program is a smart and cost-effective marketing strategy.
2. Stops you worrying about competing on price
Lockdowns have spurred an increase in online shopping which is great, but with more retailers also going digital that means more competition for you. Furthermore, the bigger players with an equally large presence who are selling at low prices may keep you up at night.
Your customer loyalty program can relieve you from the stress of competing on price if you can connect to your customers’ emotions. Once you do that, your business instantly stands out because you’re providing a more personable and memorable shopping experience.
It’s not so much what you sell at how much, but how you sell. That can be communicated through your loyalty program and how it tugs at your customers’ emotions.
You’ll create a bond when you surprise your customer after every purchase by rewarding them and thus giving them more incentive to buy from you. They’ll identify you as more than just a retail store, but a business that really cares and makes a difference. Money can’t buy that!
“Your customer loyalty program can relieve you from the stress of competing on price if you can connect to your customers’ emotions.”
3. Create your own raving fans/brand advocates
If your customers are enjoying the benefits of your loyalty program, they’ll become your loyal brand advocates who’ll rave about your business. 92% of people trust a word of mouth recommendation more than any other form of marketing, while 86% of your customers will engage with you just by spreading the good word.
They’ll refer you to their networks and their networks to their networks: you’ll be building a network of advocates that will spread like wildfire because your customers and their peers can’t stop raving about you.
Instead of desperately trying to sell people your product or service, let your customers do it for you.
Think about all the online reviews, personal messaging, and social media posts that your customers generate because they’re so delighted to share with the world how they love shopping with you.
Word of mouth is the primary factor that determines up to 50% of purchasing decisions, says international consultancy, McKinsey. So, if your loyalty program is working, your customers will definitely let others know about it.
If you don’t have a loyalty program for your business, it’s time to seriously look into it now because you don’t want to be left behind and lose everything that you’ve worked hard for.
In just two minutes, we’ll help you create a simple but effective rewards program that will keep your customers coming back for more while doing good for the world.
Click here for more information.
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