Loyalty programs have evolved to become an integral part of consumers’ everyday lives. Hubspot, a research firm that tracks loyalty solutions, has estimated that the average American 18 and older is active in at least three loyalty programs ranging from foodservice and gasoline to online retailers like Amazon.
Loyalty has become a key factor in retailers’ business and communication with consumers. It is proven to boost sales growth, is not expensive for the retailer to implement, and strengthens the relationship with customers.
Moreover, loyalty is predicted to become even more valuable to consumers and retailers. According to Statista, the entire customer loyalty management market worldwide is valued at more than $5.5 billion U.S. dollars, and it is expected to surpass $24 billion by the end of 2028.
Regarding loyalty, the challenge for convenience retailers has expanded from catering to brand loyalty to engaging customers beyond everyday transactions. The answer for a growing number of convenience stores is personalized loyalty rewards programs.
Hubspot outlined five key areas for retailers to consider when diving into or expanding their loyalty program.
Customer expectations continue to increase. According to HubSpot research, customer service expectations remain the most important key performance indicator (KPI) for 75% of customer service leaders at retail chains. However, almost 50% are responsible for customer experience and ensuring customer success, an increase of more than 10% from last year.
This increase is notable because HubSpot found that the pandemic took a toll on customer service teams, with almost 90% of leaders reporting that customer expectations had rocketed to an all-time high.
Additionally, the report found that customers are more informed than before and more likely to share negative and positive experiences. This raises the stakes because social media has made it easier to share reviews, so service teams must work to meet or exceed customer expectations to avoid being shown in a bad light online.
The top 10% of your customer base is spending three times more than your average customer. Loyal customers will spend more money at your company than anyone walking into your stores. In fact, the top 10% of your customer base spends three times more than your average customer, and your top 1% spends up to five times more.
This is why businesses must pursue customers who are more likely to become loyal rather than just marketing to anyone.
Acquiring new customers is five times more expensive than existing customers. According to HubSpot’s State of Service Report, retaining customers was cited as one of the top three priorities. This prioritization suggests a pivot from viewing customer retention as an expense to now as a revenue-generating activity.
Customers emotionally connected to a brand have a lifetime value four times higher than the average customer. In a study of over 100k consumers, Motista found that emotionally connected customers with a brand have a lifetime value that’s 306% higher than the average customer.
Customer lifetime value is a key consumer metric because it tells companies how much revenue they can expect one customer to generate throughout the business relationship. If your brand can create memorable and positive interactions, customers will be much more likely to buy from your company again, thus increasing lifetime value.
Approximately 90% of customers rate an “immediate” response as important or very important when they have a customer service question. Your business will make mistakes, and while learning from them is important, you also need to remember that these mishaps aren’t inconsequential. HubSpot found that 90% of customers rate an “immediate” response as important or very important when they have a customer service question, and 60% of customers define “immediate” as 10 minutes or less.
A previous study by Accenture found that 47% of consumers stop doing business with a brand after the company disappoints them. Your business may not be perfect, and you will fall short sometimes, but it’s important to remain dedicated to customers’ needs — especially when you fail to fulfill them the first time. If you don’t, customers will likely look to your competitors who can meet their expectations.
One aspect of customer loyalty that has grown in popularity over the years is loyalty programs. Customers can sign up for these programs to obtain continuous benefits from the company over time. As researchers continue to investigate the different elements of customer loyalty, many interesting statistics have surfaced regarding these memberships.
