Acquiring new customers can be very expensive and competitive. Brand loyalty is proving to be a more effective option. Cryptocurrency can make the process faster, easier, and more profitable for everyone.
Customer Acquisition or Retention?
The balance between companies that prioritize customer acquisition and customer loyalty is about 50/50. Roughly 40% focus on acquisition, 40% on retention, and 20% on both. The same ratio applies to what companies believe the focus should be on. 60% believe the focus should be equal, and 20% fall on either side.
But by any quantifiable measure, customer retention is more effective and profitable than acquisition. That gap continues to grow over time. As acquisition costs rise, the need for fresh, unique customer loyalty programs rises as well. Cryptocurrency offers new, flexible options that don’t require a project to have its own existing infrastructure or pay heavy fees.
Customer Acquisition Costs
Content creation and content quality has increased dramatically over the years, tracking the costs to acquire new customers. These costs have risen over 50% during the past five years. Content creators are being paid about 25% more. As expected, the effectiveness of the content is dropping in relation to increasing costs. In spite of the increase in content, posts are being shared 90% less.
Brands new and old are struggling to make themselves heard through the noise, and the noise continues to increase while the value of raising their voices continues to diminish.
Brand Loyalty Cost Savings
There is far more value in keeping a customer than trying to get a new one. Many companies like to see growth and new faces. It makes the investors and executives happy, but it isn’t the most effective method. Bottom line, keeping a customer is 5-25x cheaper than finding a new one. A current customer already knows the brand and is familiar with the products. Small updates and reminders can help jog their memories effortlessly. Increasing loyalty programs by only 5% increases revenue by 25%. People prefer to shop at places they already know.
These metrics are illustrated even better by this one: you have a 60-70% chance to sell another product to a previous customer. They’re also far more likely to refer friends and family. You only have a 5-20% chance to sell to a new customer. It’s possible that you pull in so many new customers that the 5% dwarfs the 60% in sheer numbers. But as stated above, the costs to pull in those new customers keeps going up.
This infographic has been gaining popularity recently because of its powerful implications. Across the board, members drive over half of all revenue, typically more. Of course, some companies, like Costco, require you to be a member to shop there, so naturally, members would drive sales. But Costco is a giant corporation with huge profits, great products, and good pay and benefits for their employees. It’s a members-only club where all of the savings go directly to the customer. Very little is offered to new customers as incentive. You could say that customer acquisition is driven by the promise of retention.
Loyalty programs are better for everyone. Brands save time and money keeping up with their existing customers. Any resources spent are returned many times over. Customers are rewarded for their loyalty with higher savings and the loyalty of their favorite brands. People want to pick a team; it’s in our nature. The problem is, many companies prefer to reward new customers with good deals than old ones, causing customers to jump from brand to brand chasing new customer deals, leaving their old brand, and then continuing the cycle the next time a good “new customer” deal comes around.
Brand Loyalty Programs With Cryptocurrency Staking
Cryptocurrency offers a new, easy, streamlined method for brands to create effective loyalty programs. Crafting the details around your membership or promotion is simplified with smart contracts and does not require any of your own existing infrastructures. A smart contract is a piece of code that can be interacted with in a predetermined and automated manner. Just create the smart contract and fill in the details. Then the customers can stake their cryptocurrency into that contract to access the rewards you specified. Staking means putting down a small refundable deposit. Customers get their crypto back over a period of time. The parameters of which can be determined by the brand. And when integrated correctly, the rewards will be applied at checkout automatically.
Splyt has just announced the Mag Park VIP Membership Program, the first look into this new technology. The Magnolia Park was established in 2015 and is built on the foundation of Art, Music, Sports, and Hype. A true retail experience like no other in the world, recognized for its exclusive items and billions of social media impressions. Mag Park VIPs get exclusive first access to the Mag Park x New Era release, a VIP Member curated website with discounted rates, and 30% off all Mag Park merch.
This makes Splyt the first crypto company to build real-life utility into a token staking program, following a long list of innovative use cases and applications for crypto programs.
Visit the article linked above to learn more about the Mag Park VIP program and to learn more about how brand staking with cryptocurrency works.