Customer plays a very important role in the growth of any organization. They are the core factors upon which the success of any business depends. Whether we are talking about small or large scale business, the satisfaction of customers is responsible for enhancing the sales of the products. However, building customer relationship is more important in the case of small business, as it can be seen as moving up a ladder towards the successful business. Attracting new customer costs around 5 times as it needs to make existing one stay. That is why small businesses are often using customer loyalty programs as one of the most effective customer retention strategies.
Significance of Loyalty Solutions for Small Firms
Loyalty programs may not be that important for the large organizations as it is for small firms. Improving relationship with existing customers by providing Loyalty Programs works much better than growing customer database. Here are some of the reasons why small business should focus on providing loyalty programs:
- Retaining old customers is easier than making new ones
Use of loyalty programs has been proved effective by more than 60% of the companies to enhance the sales. The cost of maintaining existing users is much cheaper than making the new ones contribute towards the business. Only 5% increase in the retention rates by can lead to the profit of around 25-95 percent. Also, making new customers is 5 times costlier than retaining old ones.
- Frequent Customers spend more and more Money
As per the study conducted on 1000 small firms, more than 60% of the annual revenues has been contributed by the frequent buyers. And, loyal customers are the ones who has spent about 67% more than the new ones. Due to this reason, many small firms are focusing on customer retention rather than customer acquisition.
- Forget the competition with large-scale businesses
Small businesses may lack behind the famous brands that have more resources and money for marketing their products. But with the help of well-planned Customer Loyalty Solutions, small firms can also remain competitive in the online marketplace dominated by big organizations. It will also make customers happy thereby contributing towards increasing sales.
- Loyalty Programs does not have to be very costly
Small businesses do not need to choose loyalty programs that are very expensive. If planned properly, cost-effective solutions can be more beneficial than any other marketing strategies. It will help in building trust with the existing customers and with the benefits customers are being provided, they will feel more valued.
As we have seen the benefits of using loyalty solutions for the customers, the small business owner must focus on using one, if they have not yet. Nowadays, with the increasing growth of smartphones and mobiles, many customers are using mobile apps for their convenience. That is why every organization need to contact the best Mobile Application Development Company to reach customers easily & promote their business.