Why is building loyalty among consumers a highly important factor for business to survive?

Building consumer loyalty is crucial for a business's survival for several reasons:

1. Stability and Revenue: Loyal customers provide a stable revenue stream, reducing the
impact of market fluctuations. They make regular purchases, ensuring consistent income for
the business.

2. Reduced Marketing Costs: Acquiring new customers is often more expensive than retaining
existing ones. Loyal customers require less marketing effort, leading to cost savings.

3. Positive Word-of-Mouth: Loyal customers become brand advocates and recommend the
business to others. Positive word-of-mouth marketing is a powerful tool for attracting new
customers.

4. Higher Lifetime Value: Loyal customers tend to make more significant and frequent
purchases over their lifetime. Their long-term value to the business is higher than that of
one-time buyers.

5. Competitive Advantage: In a competitive market, businesses with loyal customer bases have
a significant advantage. It's challenging for competitors to lure away loyal customers.

Engaging consumers with contests can be an effective strategy to build consumer loyalty:

1. Entertainment and Interaction: Contests are entertaining and create a sense of interaction
with the brand. They offer a break from the routine and engage customers.

2. Incentives for Participation: Contests often provide incentives such as prizes or discounts,
making consumers feel rewarded and appreciated.

3. Data Collection: Contests can gather valuable customer data, enabling businesses to
personalize their offerings and communication.

4. Sense of Community: Contests can foster a sense of community among consumers,

strengthening their emotional connection to the brand.

5. Repeat Engagement: Well-executed contests can be recurring, ensuring ongoing consumer

engagement and loyalty-building.

In summary, consumer loyalty is vital for business survival due to its stability, cost-effectiveness, and
revenue-generating benefits. Engaging consumers with contests can be a valuable strategy to
strengthen loyalty by providing entertainment, incentives, and fostering a sense of community.