How to Design a Loyalty Program for Your Retail Business

Jun 24, 2020

How to Design a Loyalty Program for Your Retail Business

Pop quiz: would you rather retain a current customer or attract a new one? Any entrepreneur worth their salt will probably reply, “Both!” But if you were forced to choose only one option, you should stick with the current customer. It takes more time and effort to bring new customers into the fold, and the costs can be 5 times higher than retaining one you already have.

“It is well-understood that acquiring a new customer can be significantly more expensive than keeping an existing one,” says digital marketing guru Greg Kihlstrom. “For instance, recent research by Monetate found that an e-commerce customer who has had one previous shopping experience with a company is over 3 times more likely to convert again versus a brand new visitor, and customers who have bought multiple times are over 5 times as likely to convert again. It stands to reason then that customer loyalty programs can be incredibly valuable to any organization with repeat customers.”

When customer loyalty is so crucial to your bottom line, it certainly makes sense that you’d want to implement a business program that literally begins with the words “customer loyalty.” Customer loyalty programs have exploded in popularity in recent years, with about 90% of businesses using them. All told, American consumers hold more than 3 billion memberships to these programs. That’s almost 30 memberships per household!

About the Author

Grant Olsen

Grant Olsen

Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on FitSmallBusiness.com and ModernHealthcare.com. Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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