Keep updated with useful loyalty information

Update yourself regularly with useful information


The impact of loyalty in improving Customer life time value (LTV)

Customer lifetime value (LTV) is a metric that represents the projected revenue a customer contributes to your business over the entire lifetime at your company.

If your service makes it more likely for the customer to return in the future and spend again, you have increased the customer’s lifetime value. The longer a customer stays a customer, their value to you as a business continues to grow over time.

Investment in a good loyalty program is bound to increase the LTV of the customer. A well chalked out loyalty program will create the feeling of sense of belonging. It can engage your customers, build a relationship and drive repeat business. Also loyal customers provide a secure customer base to your business, especially when the market is down.

So, how does a good loyalty program impact LTV?

Increases loyal customer base

A good loyalty program should be able to magnetize new loyal customers. Apart from that loyal customers tend to create new customers for you; they work as brand advocates. So, hearing about your brand from someone whom they trust will automatically build the bridge of loyalty to the new customer. Referred customers are better customers. That sets of the new customer’s LTV positively.

Gives personal touch

Loyalty insights provide customer-centric input for brand experience development and assessment. Using the data collected at the loyalty programs you can present customized offers to your customers. You can reach out to him in the way he prefers communication. You boost their ego; they will come back and boost your revenue while their LTV is still ticking.

Win back old ones

A loyalty program tracks and reaches out to customers who have been inactive for a brief time, through omnichannels. It offers an incentive or an attractive personalized offer to them to win them back. This effort will keep LTV pulse alive.

Poorly designed loyalty programs can cause significant harm to a company. Since these programs are directly linked to LTV, it will also take LTV down with it.

Don’t complicate

Loyalty programs which have complex rules and benefits will result in customers who are lost in your message. It is more frustrating for a customer who has to face a poor rewards fulfillment process. Making it difficult for members to redeem the benefits they earn, will not only irk the customer forever but also spread the bad word like fire. You will end the LTV of the customer and abort the new ones too.

Don’t give a comb to a bald man

Loyalty programs which promise to give rewards that do not mean much to the customer; will surely burn the bridges between the customer and the business. For example, free diapers pack to parents who have teenage children. Also, rewarding all customers equally will surely take you out your customer’s book. A program that doesn’t make distinctions between top customers who bring more business to your brand and your seasonal or bottom customers can prove disastrous, especially in preventing customer defections. That will bring down the collective LTV down.

A well designed loyalty program will certainly boost up the LTV. In addition to financial return, customers with higher LTV have the potential to have lasting effects on your brand image.


1493 Days ago



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