One of the key drivers for growth and profitability is customer retention. You may be converting a nice piece of your traffic into sales. But you must have a healthy customer retention rate, i.e. your ability to keep a paying customer over a period of time. Else, you will be spending more money over time on acquiring new customers.
The cost of acquiring a new customer is high. According to Harvard Business Review that cost can be 5 to 25 times more than it takes to retain one. That is why you will see a lot of businesses that have implemented loyalty programmes. Thus, they hope to entice people to stay with their business.
But what would a higher retention rate mean for your business? According to Bain & Company, a 5% increase in retention rates can raise profits by more than 25%. By having a loyalty programme in place, you end up spending less while simultaneously increasing your profits by targeting your existing customers.
In this post, we want to give you the tools to help you help your business. We’ll show you how to integrate
What is a Loyalty Programme?
A loyalty programme is a way for businesses to establish long-term relationships with customers. The goal of the programme is to nurture this relationship. It does so by providing incentives for customers to repeatedly return to your business.
These incentives typically include exclusive offers and products, based on how many points a customer has collected from previous purchases.
How Can Loyalty Programmes Be Used
A points-based programme is the most common and simplest to implement. Such programmes reward customers with a certain number of points based on how much they’ve spent. For instance, a customer receives 5 points for every 10€ spent.
Other programmes such as spend and tiered programmes also operate with points.
Spend programmes, reward customers with store-credit, based on the value they’ve spent at your business. Let’s say if the customer spends 10€, they would receive 1€ in credit — or 10% of the total amount spent. Spend programmes can also be combined with points, with a customer receiving 1 point for every Euro spent. After reaching 100 points, customers would be rewarded with
Tiered programmes work like a frequent flier programme, with rewards such as free lounge access and other benefits, given to members based on different spending and points level. A tiered programme is often regarded as an
Using balancr for Tracking Loyalty Points and Spending
To get things up and running, balancr is the ideal platform to build your loyalty programme on top of it and track how many points your customers are earning and spending.
You can set your own business logic that assigns a defined value for each reward point earned in your system and use balancr to store points in your customer’s wallets, manage points balances and execute points transfers between the wallets. What’s more, balancr’s multi-currency feature enables you to add both reward points and e-money values to your customer’s wallets using different wallet accounts within a wallet. This makes setting up points, spend and tiered loyalty programmes possible with balancr’s API platform.
Another nice way to improve your customer experience with the multi-currency feature, is allowing your customers to combine their reward points with their own money to make purchases in your store.
For instance, a customer has 1000 reward points (=100€) and wants to purchase an item that costs 200€. During checkout, your customer is presented with a slider and can choose to use all 1000 points to bring the price down to 100€.
You’ll need to connect balancr with your backend system to account for both, each customer’s loyalty points and also for tracking balances of real money that are coming into your system through your payment provider. Luckily balancr’s API is so flexible, that integrations like these are hassle-free and quick to implement.
Are you planning on building a different application? Then you may want to want to take a look at: 6 Little-Known Ways You Can Use balancr
Build Your Own Loyalty Programme – Get Started Using Balancr
To get started all you need to do is sign up at balancr.io to register for your free account. Once you’re registered, check out our documentation to discover how you can fully integrate balancr and connect it with your systems. Testing integrations and experimenting in the Sandbox environment is completely free.