Acquiring new customers is undoubtedly important for any company looking to grow. However, repeat business from loyal customers ultimately guarantees a brand's ongoing success.
As markets become increasingly crowded and shoppers focus on prices, fostering customer loyalty is more vital than ever…
'Over 82% of businesses acknowledge that keeping existing customers is more cost-effective than finding new ones"
Click Intelligence
It’s important to concentrate on customer retention as much as new customer acquisition, and maintaining customer loyalty should be a priority. To help you achieve this, I’ve outlined some of the most effective customer loyalty strategies to keep your customers returning for more.
We’ll discuss everything crucial for any customer success team or marketing department to try right now, from leveraging customer loyalty programmes to customer personalisation.
Contents:
Key Takeaways
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Retaining existing customers through repeat business is more cost-effective than acquiring new ones, as loyal customers drive significant revenue through repeat purchases and word-of-mouth referrals.
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Personalising the customer experience based on customer data and segmentation can increase customer loyalty, as it makes customers feel valued and encourages them to become brand advocates.
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Prioritising excellent customer service is crucial for building customer loyalty, as satisfied customers are more likely to make repeat purchases and share positive experiences on social media platforms.
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Being receptive to customer feedback demonstrates that you value their opinions, leading to increased customer satisfaction and loyalty.
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Regularly communicating with customers through various channels, including social media, email, and newsletters, helps maintain brand awareness and encourages repeat business.
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Optimising the onboarding process ensures a positive first impression, setting the stage for long-term customer loyalty and higher customer lifetime value.
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Providing targeted offers and discounts based on customer segmentation and purchase history can incentivise repeat purchases and demonstrate appreciation for loyal customers.
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Strategic partnerships with complementary brands can expand your reach, add value for customers, and differentiate your products or services from competitors.
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Implementing customer loyalty programmes and rewards programmes encourages customers to continue engaging with your brand, as they feel rewarded for their loyalty and are motivated to make repeat purchases.
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Measuring key loyalty metrics, such as customer retention rate and customer lifetime value, allows you to track the success of your loyalty efforts and make data-driven decisions to optimise your strategies.
Why Should You Invest in Customer Loyalty?
Businesses can’t afford to ignore customer loyalty.
Customers now have more choices than ever when making their purchase decisions. They can easily find other options on the market if they don’t get the kind of treatment they expect from you.
You must create a lasting impression with your customers—via high-engagement techniques like loyalty programmes—to ensure they choose your business and continue to shop with you.
What about the financial impact?
From a financial perspective, it makes sense to focus on retaining your customers and creating a tribe of loyal customers.
Compared to the cost of acquiring a new customer, which can be five to twenty-five times higher, selling to existing customers is one of the most efficient ways to boost your return on investment.
These costs include advertising and promotions, sales representatives' time, opening new account records, and other administrative expenses.
Of course, acquiring new customers is still important for business growth. But why spend all that effort acquiring them just to let them slip through your fingers after one sale?
"Especially when as much as 65% of a company's revenue comes from repeat and referral business."
What’s more, your loyal customers will often provide free marketing through word-of-mouth when they tell others of their great experiences with your business.
See our blog on the benefits of customer loyalty for a more in-depth analysis.
Customer Loyalty Strategies: How to Increase Customer Loyalty
Brand loyalty is about more than pricing and availability. Customers are more likely to make repeat purchases if they have confidence in your brand and believe you’ll provide ongoing value and excellent service.
Here are 14 proven strategies to help you boost customer loyalty:
1. Customer loyalty programmes
One of the best ways to keep customers happy is to reward them for their loyalty.
"75% of consumers will favour a brand if there is a loyalty programme that rewards members."
Loyalty programmes are effective because customers want to feel appreciated. After all, they can choose to spend their money anywhere. And if they’ve chosen to shop with a specific company, they want to feel as though they’re valued.
Rewards encourage customers to return to shop with you in the future, helping to maintain customer loyalty.
What defines successful loyalty programmes?
To succeed over time, customer reward programmes must offer something truly special. Yes, 50% of consumers will recommend others for rewards, recognition or loyalty programme membership...
But brands that promise loyal customers a special discount only to reveal that new customers can get the same deal are likely to lose those customers' loyalty and business.
You can invite customers to subscribe to a loyalty programme, let them earn points as they spend, or let them move up in tiers over time. No matter what method you use, the incentives you offer must be relevant to your target audience.
Adopting a value-based approach to loyalty can also help you win your customers' trust. Donate a portion of your revenue to charities that they support to give back to the community and raise awareness for a good cause.
This shows your customers your dedication to social change and making a real difference.
2. Personalise the customer experience
If customers see you as more than just another logo, they’re more likely to do business with you. Sharing the core values that guide and define your company is a great way to build trust and establish your brand's authenticity.
People are more likely to become loyal to your brand if they feel connected to it on a personal level.
"Treating customers as individuals rather than wallets is essential to running a prosperous business. Specifically, 62% of shoppers say they are more likely to return to a brand that individualises transactions"
Get to know them by analysing their preferred products, buying behaviour and demographics—modern technology makes this easier than ever. Tailor the message to what you know will interest them the most.
Businesses that experience rapid growth generate 40% more of their revenue from personalised experiences than companies that grow at a slower pace.
3. Make customer service a priority
Consumers today expect a much higher level of customer service than they did in the past.
"93% of customers are likely to make a repeat purchase with companies that offer excellent customer service."
On the other hand, most will abandon your brand for a competitor if the customer service experience isn’t spot-on.
What drives changing customer service expectations?
Expectations have changed for numerous reasons. But a big part of it is that digital communications have significantly improved response times. It also makes it easier to engage with customer service departments.
We can all think of a time when we were impressed with the level of customer service we received from a brand. You probably raved about it to friends, right? Well, you’re not alone…
"77% of customers would recommend a brand to a friend after having a single positive experience!"
But what about brands that provided a bad experience? Odds are you haven’t gone back to shop there; speak nothing of recommending them.
Customers generally agree; 92% say they will move to a new brand following one or fewer negative experiences.
The bottom line is that people remember when they’re treated well and when they receive bad customer service. In either case, most will tell their family or friends about it, which can either mean more business for you or a lost business opportunity.
Giving customers the best possible service during every interaction keeps them happy and reminds them why they chose your brand in the first place. The customer experience begins at the first encounter with your brand, so you must make a good first impression.
4. Invest in partnerships
Providing extra value for customers is another way to show gratitude for their business. You can do this by offering your audience rewards, incentives, and special offers from a carefully selected list of brand partners.
Partnership marketing, or brand-to-brand partnerships, gives your current customers more value from your relationship and increases your visibility in untapped markets.
Case studies have shown that high-growth brands use marketing partnerships three times more than low-growth brands.
Partnering with complementary, non-competing brands gives you access to their audiences and allows you to create unique rewards that can’t be found elsewhere. This gives customers another reason to pick you over the competition.
5. Launch a referral programme
Launching a referral programme is a powerful way to leverage the loyalty of existing customers to attract new ones.
Reports suggest that referral programmes can help grow revenue 86% faster.
By incentivising customer referrals through rewards, discounts, or exclusive perks, you can encourage satisfied customers to become loyal brand advocates. Word-of-mouth marketing is highly effective...
Over 87% of consumers say personal recommendations from friends and family are the most reliable source of brand information.
A well-designed referral programme rewards the referring customer and the new customer they bring in, creating a win-win situation that strengthens customer loyalty and drives growth. And the best part is…
Referral leads have a higher conversion rate (30%) and lifetime value (16%) than leads acquired via other marketing channels.
6. Provide targeted discount offers
Targeted marketing campaigns based on customer segmentation can help you deliver personalised incentives to specific groups of customers using triggers. This increases the likelihood of customers making a desirable action such as a membership upgrade or contract renewal.
Loyalty programme analytics tools allow you to identify customer spending patterns and offer personalised discounts to encourage repeat purchases or extended contracts.
Loyalty and rewards programmes that offer personalised incentives and a unique customer experience help you build a loyal customer base. These reward programmes are a powerful tool for attracting new customers looking for a brand that rewards their dedication while adding to your value proposition.
7. Gamify loyalty
Gamifying loyalty programmes is an engaging way to keep customers excited about interacting with your brand.
According to a study by TalentLMS, 83% of learners said that a gamified approach made them feel more motivated.
Adding game-like elements such as points, badges, levels, and leaderboards to your loyalty programme makes the experience more fun and rewarding for customers.
A study found that gamifying marketing increased customer engagement by 60%.
Running contests, challenges, and sweepstakes can further incentivise participation and encourage customers to engage more frequently with the brand. The goal is to create a sense of achievement and friendly competition that keeps customers loyal.
When designed effectively, gamified loyalty programmes can boost customer retention, increase brand awareness, and foster a sense of community among customers.
8. Find your unique value proposition
A unique value proposition or differentiating factor is vital for business sustainability. Knowing your audience and identifying what motivates them to buy enables you to build lasting relationships.
Consider what you stand for and believe in as a brand, and identify what makes you different from your competitors. Why would a customer buy your product? What value can you provide that your competition can't?
Providing a product or service which customers view as superior and unique to the competition is tricky but ultimately rewarding.
9. Provide flexible payment options
Flexible payment systems will particularly benefit small businesses that see fluctuations in cash flow during certain periods of the year by keeping customers loyal during slow seasons.
A winter-wear boutique, for instance, would do well during the winter but suffer during the summer months. Situations like this underline the importance of creating a flexible payment plan. One approach is that customers could start shopping in the summer and pay off their purchases in increments over the period leading up to the winter.
Customers will benefit from the more flexible instalment payments and the business benefits from the influx of cash during a traditionally slow period. Sales will increase as satisfied customers tell their friends about the special payment offer.
10. Optimise the customer onboarding experience
Ensure your onboarding process runs smoothly to make a good impression on your customers when they make their first purchase.
They will likely remember service slip-ups like the misuse of information or the absence of a clear point of contact to guide new customers on onboarding landing pages. Even if support teams quickly resolve the customer's complaints, the experience may have already soured the relationship.
Always remember that the success of the onboarding programme itself is just as important as providing excellent customer service to new customers.
11. Communicate with your customers
Communication is key in pretty much every area of life, and business is no exception! Frequent communication with your customers keeps you fresh in their minds and makes them more likely to think of you when they’re looking for a product or service that you offer.
For some brands, a mobile app with built-in customer support features, such as live chat or a knowledge base, can make it even more convenient for customers to reach out and get the assistance they need.
Whatever strategy you use, make sure customers can reach you easily on the communication channel—in-person or online—that works best for them.
12. Be open to feedback
One of the best ways to increase customer satisfaction and keep them loyal is through feedback. To learn more about improving your customer service, try sending out surveys, making requests via phone calls, and monitoring your ratings.
Respond to customer feedback—positive and negative—on reviews, tags, and comments on social media and other online forums. This will show that you value their input and are open to constructive criticism about improving your services.
You can also offer rewards, like discounted offers, to satisfied customers when they provide valuable feedback.
13. Leverage social media
Social media platforms are also critical in any modern business’s marketing strategy. Not only do social media platforms offer powerful targeting features, but they’re also an excellent way of developing an online community of loyal followers.
The UK alone had 56.2 million active social media users in January 2024, which was 82.8% of the population.
If nothing else, that’s reason enough to maintain a social media presence and an active profile. Still, businesses often overlook the benefits.
Social media platforms allow customers to connect, share feedback and have valuable discussions. Use a content marketing strategy on social platforms to engage with your audience, build brand awareness, and foster a sense of community among your followers.
14. Measure and optimise loyalty
Measuring customer loyalty is essential to maintain retention. Studying key metrics such as customer retention rate, lifetime value, and Net Promoter Score (NPS) tracks customer behaviour and purchase history to determine the effectiveness of your loyalty efforts.
The data-driven insights you gain from tracking those metrics will help refine your loyalty strategies to meet customer needs. This ultimately leads to higher retention rates and customer satisfaction.
Boost Customer Retention with a Loyalty Programme
A designed customer loyalty marketing strategy is the cornerstone of maintaining customer loyalty and boosting customer retention.
Powerful strategies like launching a customer loyalty programme or forming partnerships with relevant brands can help you give your customers an experience they won't forget in a hurry. Customers who have a positive experience with your business will tell others about it and become loyal to your brand.
FAQs
Why is customer loyalty important for businesses?
Customer loyalty is crucial for businesses as it leads to repeat business, higher customer lifetime value, and reduced customer acquisition costs. Loyal customers also tend to spend more, provide valuable feedback, and act as brand advocates, helping to attract new customers through word-of-mouth referrals.
What are the benefits of implementing a customer loyalty programme?
Implementing a customer loyalty programme offers several benefits, including encouraging repeat purchases, increasing customer retention, and providing valuable data on customer preferences and behaviour. Loyalty programmes also make customers feel rewarded for their patronage, fostering a sense of loyalty and advocacy for the brand.
How can offering targeted discounts and promotions encourage repeat purchases?
Offering targeted discounts and promotions based on customer data and behaviour can effectively encourage repeat purchases. By personalising offers to individual preferences and purchase history, businesses can incentivise customers to continue buying from them, strengthening loyalty and increasing customer lifetime value.
How can personalisation help increase customer loyalty?
Personalisation helps increase customer loyalty by making customers feel valued and understood. By using customer data to tailor experiences, offers, and communications to individual preferences, businesses can build stronger relationships with customers, encouraging repeat purchases and fostering a sense of loyalty to the brand.
What role does customer service play in building customer loyalty?
Excellent customer service is a key factor in building customer loyalty. By consistently providing helpful, responsive, and friendly support, businesses can create positive experiences that leave customers feeling satisfied and appreciated, increasing the likelihood of repeat business and long-term loyalty to the brand.
How can businesses effectively use customer feedback to improve loyalty?
Businesses can use customer feedback to identify areas for improvement, address concerns, and demonstrate their commitment to customer satisfaction. By actively seeking and responding to feedback, businesses show customers that their opinions are valued, leading to increased loyalty and a stronger customer-brand relationship.
What is the difference between customer retention and customer acquisition?
Customer retention focuses on keeping existing customers and encouraging repeat business, while customer acquisition aims to attract new customers. Retaining customers is generally more cost-effective than acquiring new ones, as loyal customers tend to spend more and contribute to stable, long-term revenue.
What metrics should businesses track to measure customer loyalty?
To measure customer loyalty, businesses should track metrics such as customer retention rate, repeat purchase rate, customer lifetime value, and net promoter score. These metrics provide insights into the effectiveness of loyalty strategies and help identify areas for improvement in the customer experience.
How can businesses turn loyal customers into brand advocates?
Businesses can turn loyal customers into brand advocates by consistently providing exceptional products, services, and experiences. By going above and beyond to satisfy customers, businesses can create a strong emotional connection that encourages customers to recommend the brand to others, driving word-of-mouth referrals and growth.
Author Bio, Written By:
Mark Camp | CEO & Founder at PropelloCloud.com | LinkedIn
Mark is the Founder and CEO of Propello Cloud, an innovative SaaS platform for loyalty and customer engagement. With over 20 years of marketing experience, he is passionate about helping brands boost retention and acquisition with scalable loyalty solutions.
Mark is an expert in loyalty and engagement strategy, having worked with major enterprise clients across industries to drive growth through rewards programmes. He leads Propello Cloud's mission to deliver versatile platforms that help organisations attract, engage and retain customers.
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