As customers become more loyal (and your referral program becomes more structured) you’ll see referrals become a large percentage of total incoming leads. By adding VIP tiers for the most loyal customers, a company can boost loyalty among existing customers and entice new and less engaged customers to interact more with the brand. This is typically due to the delightful and remarkable experiences they have with that brand. According to The Loyalty Effect, a 5% increase in customer retention can lead to a 25% to 100% increase in profit for your company.
The simplest and probably the most popular loyalty programs use a point system, that is, customers earn loyalty points every time they buy from the brand. Customers earn one point for every dollar spent and are grouped into one of three tiers depending on the amount they spend. In fact, 87% of Apple’s customers are brand loyal – meaning they will continue to purchase from Apple in the future.
What is customer loyalty example?Using dedicated mobile apps to manage customer loyalty programs is now a common thing for many retailers, but when Starbucks first launched My Starbucks Rewards, they were among the pioneers.
Studies have shown that acquiring a new customer costs an average business around 5-25X more than re-selling to a current one. Forward-thinking brands compete on customer experience (CX) because it’s a driver of higher customer retention levels. The benefit of rewarding customers using a points-based system is that it allows Marriott to analyze customer behavior and use that customer data to create a better experience tailored to each customer. Even though not a Customer loyalty program per se, as it still involves a paid membership, Amazon prime is still a great example of providing enough value to regular buyers so that it really benefits them.
Virgin Atlantic, for instance, has introduced its Flying Club a customer loyalty program that allows members to earn tier points.