Why investing in Loyalty Programs and Retention beats costly new customer acquisition?
Learn how to segment your customers and send personalized deals using Joy Loyalty and Klaviyo integration to boost engagement during BFCM.
Last updated
Learn how to segment your customers and send personalized deals using Joy Loyalty and Klaviyo integration to boost engagement during BFCM.
Last updated
In today’s highly competitive market, the cost of acquiring new customers has soared, with studies showing that it can be 5-25 times more expensive than retaining an existing customer (Harvard Business Review). Additionally, the average conversion rate for new customers is only 5-20%, whereas loyal customers convert at a significantly higher rate of 60-70%. Despite this, many businesses still focus heavily on customer acquisition, often overlooking the long-term benefits of customer loyalty and retention.
As the costs of acquisition continue to rise, building a loyalty program emerges as a smart, cost-effective solution. By fostering loyalty, businesses not only save on acquisition costs but also drive higher revenue from repeat purchases. Research shows that a 5% increase in retention can lead to a profit boost of 25-95%, proving that loyalty and retention efforts have a powerful impact on the bottom line.
For eCommerce merchants, particularly those on Shopify, implementing a loyalty program can seem daunting due to perceived costs and complexity. However, Joy Loyalty provides a straightforward and affordable way to build a comprehensive loyalty program, with features designed to reward customers and keep them coming back. In this article, we’ll explore why investing in customer loyalty is more effective than high-cost acquisition and show how Joy Loyalty makes building a loyalty program easy and affordable for merchants.
Studies from Harvard Business Review reveal that retaining a customer costs 5-25 times less than acquiring a new one. This difference makes retention-focused efforts like loyalty programs more economical, providing better returns. Loyal customers are more likely to spend more over time, and research shows that they are 60-70% more likely to repurchase compared to new customers who only convert at 5-20%.
Loyalty programs are proven to boost Customer Lifetime Value (LTV). A Bain & Company study shows that loyal customers can spend up to 67% more than first-time buyers. By encouraging repeat purchases through rewards, businesses maximize each customer’s lifetime value, turning one-time buyers into long-term supporters.
A small increase in retention can lead to substantial profit gains. Research by Frederick Reichheld of Bain & Company found that increasing retention by just 5% can boost profits by 25-95%. This is because retained customers tend to make larger purchases and are more likely to recommend the brand, which reduces the need for expensive advertising and promotional efforts.
Joy Loyalty is designed with these retention benefits in mind, offering features that make loyalty programs effective, customizable, and affordable for merchants.
Joy Loyalty’s points system allows merchants to reward customers for various actions—like signing up, making purchases, or referring friends—without relying solely on discounts. Merchants can tailor points to specific actions and create rules that maximize engagement. This feature ensures that loyalty rewards are both appealing and sustainable, helping to keep program costs low while still driving results.
The VIP Tier feature enables merchants to create multi-level reward programs, where customers unlock greater perks as they ascend each tier. VIP tiers foster a sense of exclusivity and motivation, encouraging customers to stay engaged. Additionally, Joy Loyalty’s VIP system includes a digital membership card that matches the brand’s identity, along with customizable entry rewards and ongoing perks per tier. This in-depth VIP setup promotes repeat purchases and deepens customer loyalty without significant additional costs.
Joy Loyalty integrates smoothly with email marketing platforms like Klaviyo, enabling merchants to create highly targeted campaigns based on loyalty data. For example, during Black Friday, merchants can segment their customer base by VIP tier and send each group a customized offer, maximizing engagement. This integrated approach reduces the need for extensive acquisition campaigns, as targeted communications and rewards enhance customer loyalty.
Investing in a loyalty program with Joy Loyalty is a powerful and cost-effective alternative to high-cost customer acquisition. With features like customizable points, VIP tiers, and marketing integration, Joy Loyalty provides merchants with the tools to drive retention, boost lifetime value, and foster long-term relationships with customers—all at a manageable cost. In a competitive market, Joy Loyalty’s focus on affordable, high-impact retention strategies ensures merchants can achieve sustained growth while reducing reliance on costly acquisition efforts.
This biggest deal is valid until December 5, 2024, so make sure to apply the code before it expires. Take full advantage of this special deal and get ready to boost your sales this holiday season by upgrading your loyalty program.
Use Code: JOY-BFCM2024
Claim now, and let Joy Loyalty help you drive record sales this BFCM! Don't know how to apply this coupon? Check out our guide and take advantage of our special deal!
