Sales promotion and loyalty programs are two ways to promote your businesses among your customers and to capture more audience. There is always a blurry line between sales incentive programs and loyalty programs. If you’re thinking to adopt one of these strategies in your business, you need to have a clear vision. This article will help you better understand the difference between sales incentive programs and loyalty programs.
What are the sales promotion programs?
Sales promotion programs are basically benefits, it can be a monetary benefit or a gift or maybe even a promotion. The main thing behind these programs is to keep your employees motivated. In simple words, you set a goal X to be achieved in let’s say 30 days. Now your sales team knows that they’ll have to make X sales in 30 days to get the reward you’ve announced. It’ll surely increase their motivation and they’ll leave no stone unturned in achieving this goal. Almost 90% of top-performing companies give some kind of rewards (money, gift or even a promotion) to their sales and marketing teams.
What are loyalty rewards programs?
As many as 84% of consumers say they’re more likely to stick with a brand that offers a loyalty program. A loyalty program is an incentive that offers benefits to their frequent customers. Those benefits can be in the form of discounts, free products, rebates or any other promotions. In simple words, a loyalty program offers a discount on a current purchase or some points are added to your loyalty card (or loyalty app) that can be used for future purchases.
Remaking a sale to your existing customers is easy than finding new ones. Loyalty programs help you make these sales to your existing customers. These programs include points and tier system. You are awarded points on each sale, these points are used to get discounts and free products, as well as, increase your tier level (Bronze, Silver, Gold, Diamond, Platinum, etc.). Customers on higher-level get more discounts and free products. In order to make your loyalty programs succeed you need to set the goals clearly that best suit your budget. And one more thing that’ll make your loyalty program more successful is to get personal with your customers. Send in emails with their personal information to tell them how many more points do they need to get to a higher tier. How many free rewards are waiting for them? That’ll make them come again to your store.
What should be your go-to – sales promotion or loyalty rewards program?
Both these programs – a sales promotion program and loyalty rewards program are directed to grow your business and make more sales. But in my point of view, a loyalty reward program best suits a business. No doubt, its result will come out slowly but this program will surely make your business stand out in the crowd of businesses that offers the same services as yours.
Here are a few factors that I think how loyalty program make a sales better:
- Loyal customers – This reward-giving system makes your customers more loyal to your brand. The sense of getting acknowledged and the rewards a customer gets, make them wants to buy more things. The thought to get to higher levels makes your sales go high.
- Better marketing – The loyalty rewards program markets your business automatically because there is word of the mouth involved. When your loyal customer sits in a gathering, your marketing is being done automatically, no such advantage is there in the sales promotion program.
Let’s take it to a whole new level:
I would recommend don’t stick to one plan, no doubt, in my point of view the loyalty reward program is more effective. Mix both things a little. Let’s think about this, your business has loyal customers as well as a motivated sales and marketing team. How many sales will you get in this way? I will leave you here with a thought to process.