8 ways beyond the financial ROI of a loyalty program

  • 08 Mar 2017

There are eight ways in which loyalty pays back. Some are more obvious, but others will surprise you.


1. Greater consumer costs: Loyal customers buy more and they are often willing to pay more. This creates a healthier cash flow.

2. Referrals mean lower customer acquisition costs: Loyal customers refer others to your business, saving you marketing and advertising costs of acquiring new customers.

3. Loyal customers are ready to forgive mistakes: Loyal customers are more forgiving when you make mistakes – even big ones (especially if your employees can fix errors on the spot) Then loyal customers become even more loyal!

4. Loyal customers can easily become advocates: A loyal customer’s endorsement can surpass even big marketing efforts. For example, small Dinner located in a non-popular destination can become a big hit thanks to positive word of mouth.

5. Loyal customers and loyal employees go together: Feeding companies with high customer loyalty usually have loyal employees who are genuinely engaged in their work. Loyal employees save you money in a variety of ways. You don’t have to spend money attracting, hiring and training new employees, and you have knowledgeable people at all levels of the organization serving the customers and each other. And those employees improve over time, and in a culture that values them they can be responsible for both business process improvements and significant cost savings.

6. Greater loyalty levels coincide with business innovation: Thriving companies with high customer and employee loyalty are generally known to outpace their competitors in innovation.

7. Loyal customers’ feedback helps to improve the business: Loyal customers understand your processes and can offer suggestions for improvement. Their feedback can help with research and development efforts as well as improvement efforts.

8. Greater customer retention means greater profit: An increase in your retention of customers can boost your bottom line profit by 25%-100% depending on your fixed costs.

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