Rewarding repeat customers to increase sales in your business, is a primary but a powerful strategy towards a successful business. Today, the payment processing space is evolving and as a merchant, it is important to acquire space. Card holder usage has increased significantly and by adding a customer reward program; your payment company can significantly contribute to the growth of your business. Rewarding your customers will certainly benefit them but what will you get out of it?
Deselect unprofitable customers
Low spending customers or those who buy your discounted line cost you money. It is certainly profitable to lose bad customers than it is to gain new ones. This is because unprofitable customers cost you more money to service than they generate.
Payment processors like Collective P.O.S helps you identify to what extent a customer is contributing to your business. Designing a customer reward program that rewards better customers while excluding the unprofitable ones will give them less reason to stay. If unprofitable customers are contributing to the fixed operating cost and the size of your business, you may want to retain them. The same customer reward program can help you turn them into profitable customers.
A customer reward program can help formulate the pricing structure of your business. The after effects of changing prices can be studied by segmenting customers through the payment processing database. You can identify which customer segment will buy significantly less or more when price change. If enough customers are happy to purchase a product at a certain price, there seems to be no point in reducing that price simply to attract less profitable customers.
Increase customer lifetime value
Customer Lifetime Value (CLV) is the net income attributed to the overall relationship you will maintain with your customer. CLV measures how valuable a customer is to you now and also how valuable you interactions with them will be in the future. Adding a customer reward can help you calculate exactly what the CLV is for each customer, and help you turn such information into usable data for implementing solid strategies to retain your customers.
A valuable customer reward program has the ability to attract new customers. Differentiation of business is perceived very strongly by the potential customers with an effective customer reward program.
Payment processing shows that customers all over the world are now utilizing card usage more often than ever before. Implementing a reward program based on this information is very important in retaining existing and new customers.
Rewarding the purchasing behavior of your customers increases their urge to stay loyal to your business/company. A reward program may offer store credit, convenience, prizes or any other benefit that will entice your customers.Continuous updates to the rewards will keep your customers engaged which will, on the other hand, contribute to the growth of your business.