The Value Of Customer Loyalty
Improving customer retention is one of the easiest ways to grow your business. Harvard Business Review, the magazine from the prestigious university, has cited research which concludes “increasing customer retention rates by 5% increases profits by 25% to 95%.*”
(https://hbr.org/2014/10/the-value-of-keeping-the-right-customers)
*dependent on industry
As the tools to facilitate customer retention have evolved, the most common strategy has been for a business to develop a customer loyalty program. Through mobile apps, paper loyalty cards, and email subscriptions, businesses are competing to keep their customers coming back for more. A loyalty program should align the interests of businesses and their customers, by providing top notch functionality and frictionless user experience. That’s where Prize comes in – We’ve built a platform that empowers businesses of all sizes to better engage their customers.
The status quo, where customers must complete a unique set of actions to participate, is disruptive. The inconvenience of downloading new apps, keeping track of punch cards, and sorting through emails, leads to low enrollment and low participation, which undermines the fundamental value of a loyalty program. (See the stats below for further proof.)
- 73% of restaurant guests note a single loyalty program that can be used at a range of brands is appealing
- 62% of customers state inconvenience as a barrier to signup
Many customer loyalty programs don’t do enough to engage with customers. To improve user experience, Prize is a customer-centric mobile app that enables your customers to track rewards at all of their favorite businesses. That’s right, one app for users to engage with their favorite brands: From their local coffee shop, to their barber, to their favorite retailer – Prize makes customer loyalty more convenient and more rewarding.
The value of a loyalty program can be measured by the following:
Increased spending per customer
Loyal Customers spend up to 67% more per visit
Increased customer retention
Research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows that increasing customer retention rates by 5% increases profits by 25% to 95%
Increased visit frequency
Customers enrolled in a Loyalty program visit 35% more often
Actionable customer insights
A loyalty program provides natural growth by providing incentives for repeat customers, but it should also enable a business to capture valuable insights into customer behavior. With Prize, you can unlock an abundance of customer data on visit frequency, amount spent per visit, and more.