Attracting new customers is an important part of growing or maintaining every shopping mall, but so is retaining existing ones. One way to keep customers coming back is by offering a loyalty program.
The strategy of loyalty programs may be decades old, but the mechanisms are constantly evolving to appeal to the tastes of newer audiences and keep up with the ever-growing competition.
In this article, we'll take a look at what loyalty programmes are and we will explain to you some of the benefits of running them.
There are 3.3 billion loyalty memberships in the US, says a report by Accenture. Despite such a large number of loyalty memberships, brands are constantly investing in the old loyalty strategy. Why? Well, it is because all brands know that retaining a customer is more valuable than acquiring a new one.
With each additional year of the relationship, the cost of customer service goes down. Over time, as the loyalty lifecycle develops, loyal customers even become business creators: they buy more, pay higher prices and bring in new customers through referrals.
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The probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer, according to Marketing Metrics.
How to achieve a successful loyalty program?
A rewards program can boost the loyalty lifecycle and encourage new customers to behave like a company's most profitable customers but only if it is designed and implemented as part of a broader loyalty management strategy. The company must find ways to create value for customers in proportion to the value that customer loyalty creates for the company.
The aim must be to create a system through which customers are continually educated about loyalty benefits and motivated to earn them. To achieve a sustainable loyalty system requires a sustainable and strategic approach.
Treat your best customers
Some of the best examples of building customer loyalty through value sharing can be found in small traditional businesses like family restaurants. They understood the magic and strategic purpose of an effective rewards program for many years. These businesses make a point of getting to know and build relationships with their best customers.
They often reward them with extra service and attention – giving them a free drink or special dessert. Just because they know that providing more value to profitable customers makes them loyal, and that loyal customers will become even more profitable over time.
So treat your best customers the best! "More than 66% of consumers say they're prepared to modify their spending habits in order to maximize the benefits of a loyalty program," says Bond Brand Loyalty Report. Your shopping mall is in a relationship with your customers, so don't treat them like you want to break up! Your loyal customers need to be made to feel that you value them and treat each and every one of them individually.
Personalization into practice
"Experiences that save customers time and make it easy for them remain very important factors, but showing that you know and understand a customer is the highest driver of loyalty to a program right now," said Sean Claessen, Chief Strategy Officer at Bond.
Think about what kind of mechanisms you have in place to capture valuable data about your customers' purchases and buying behavior. Use those data to enhance your relationship! Remind them about planning discounts or special promotions. Appreciate milestones. Has it been six months or a year since they bought that expensive item? Check in to see if they were satisfied.
Customize communication with your customers as much as possible. Personalized messages make customers feel more valued and contribute to brand loyalty. There are numerous studies that demonstrate the effectiveness of personalized communication. Research shows that adding personalisation to subject lines can boost open rates by 26%.
Benefits from implementing loyalty program in your shopping mall
Now that we've seen how critical customer loyalty is to the success of any business, let's take a closer look at what it means exactly in terms of business performance.
Here's a short summary of the main benefits that go hand-in-hand with customer loyalty:
1. Repeat customers spend more money
If you want your existing customers to feel good about supporting your shopping mall, a loyalty program can help. By rewarding them for their purchases, you let them know that you value their business. Rewards can help customers feel like they're saving money, which will help them feel more likely to continue shopping at stores in your shopping mall. According to a study by Bain & Company, repeat customers spend an average of 67% more than new customers.
2. Gather data
Loyalty apps provide shopping malls with valuable data on customer behavior, preferences, and purchase history. This data can be used for marketing and merchandising decisions, leading to more effective campaigns and increased revenue. When people sign up to your loyalty programme, you can collect various data and use them for different purposes.
3. Existing customers – Brand Advocates
Loyalty programs are designed for existing customers, but they can also help you get new ones. When people learn about your special loyalty program, they may want to take advantage of your rewards and savings. According to Temkin Group, 77% of customers would recommend a brand to a friend after a single positive experience.
4. Improve brand image
Establishing a loyalty programme that provides customers with rewards and promotions can help you improve your brand reputation. You can target people who shop to save and show them that you value their support. When customers feel that your brand offers them good value, they may also have a more favorable relationship with your shopping mall. 73% of customers said that they would recommend a brand with a good loyalty program to others.
5. Get ahead of competing shopping centers
According to a Report by Bond Brand Loyalty, 81% of customers said that they would be more likely to continue doing business with a brand that offers a loyalty program. A loyalty programme can make customers feel like they can save money by shopping at your shopping center rather than at a competitive one.
6. Data analysis
Establishing a loyalty program will make it easier for you to track your customers' purchasing and spending habits. This information can help you come up with smarter marketing ideas and campaigns. According to a report by Salesforce, 64% of consumers expect companies to use their purchase history to provide them with more personalized and relevant offers.
7. Motivate to shop more
When customers know they are working towards a reward or incentive, they are more likely to shop more frequently and spend more money. According to a survey by Experian, 75% of consumers say they are more likely to make another purchase after receiving a reward. You can use different levels of rewards for your members, which motivates your customers to spend more.
8. Increase in profit
One of the main reasons for creating a loyalty program is, of course, to maintain a steady income. If you continually provide rewards, coupons and special offers to loyal customers, they may be more inclined to shop in your shopping mall. Bain & Company and Harvard Business School report that "increasing customer retention rates by 5% increases profits by 25% to 95%".
9. Enhance brand relevance
Creating a loyalty program can help shopping malls stay top-of-mind with customers and maintain relevance in a crowded marketplace. By regularly communicating with customers through loyalty program-related promotions and rewards, shopping malls can keep their brand top-of-mind and create positive associations with their brand. In fact, a report by Accenture found that 61% of consumers prefer to shop with retailers who offer personalized promotions and offers.
We are pretty sure that after reading this article you have a better idea how your shopping mall can benefit from loyalty programmes. Even if you haven't started working on your own loyalty program yet, it's never too late.
Our team at Mallsio is here to provide you with all the tips and advice every small or large shopping mall might need to know before running a successful loyalty program from the start.
