Getting your brand on the radar of new prospective clients and customers is essential, but too often we lose ourselves in the chase of new users and forget to secure relationships with those who have previously or are presently consuming our goods or services.
Loyalty marketing focuses on retaining the business of our past clientele. For many businesses, 80% of sales come from just 20% of their client base. Capitalizing on the loyalty of this vital population is integral to growing a strong and successful company.
What is Customer Loyalty
Customer loyalty develops when a customer is consistently satisfied with the quality of goods or services they receive from a company. Your customers become loyal when they feel confident that they can rely on your company to consistently satisfy their needs.
When a customer is loyal to a company, they will not easily be swayed to purchase similar goods and services from a competing company. This means that once a member of your clientele forms an emotional attachment to your brand, they will be willing to pay a little more, travel a little farther and buy a little more at a time to support your business and contribute to its growth.
In addition, loyal customers will identify with your company and will be eager to share this new element of their identity with others, effectively building a larger client base.
Using Loyalty Marketing to Increase Customer Loyalty
Loyalty marketing is an often incentive-based marketing strategy that drives customers into becoming repeat customers and beyond.
To succeed with a loyalty marketing strategy, business owners must first master the art of customer service and flawless delivery. If your customers are going to have a consistently positive experience with your company, you must have mindfully developed procedures already in place to build positive customer relationships and promote customer retention.
The key driver in fostering brand loyalty is your company’s ability to consistently deliver a positive emotional experience for the customer. Your clientele wants your company to make them feel good for choosing to give their business to you over your competitors.
The loyalty marketing strategies that you develop will promote the procedural benefits of continuing to work with your company, highlight an engaging positive emotional experience and further align with the individual values, wants, and needs of your clientele.
Effective Loyalty Marketing Strategies
No matter which niche loyalty marketing strategies you work with and develop, these five simple methodologies should be at the core of any loyalty marketing program: emotional loyalty, social responsibility, customer appreciation, personalization, and transparency.
The unique techniques that you utilize will be specific to your industry and target market, but most successful loyalty marketers use some derivation of these five key elements when developing their customer retention strategy.
#1 – Emotional Loyalty
Sparking and developing a positive emotional response to your brand is integral to a successful loyalty marketing program. Consumerism has shifted from a think-do-feel mentality to a feel-do-think mentality. This means that your customers have shifted from making information-based purchasing decisions to making emotionally-based purchasing decisions in response to the way that your products or services make them feel.
Building emotional loyalty can be broken down into three steps: starting a conversation, understanding emotional motivators, and fostering a long-term connection.
Start a conversation by associating your brand with a lifestyle, influencer, or event. This could be achieved in the form of a publicity stunt or through something as creatively simple as releasing a set of emojis that incorporate your trademark. The possibilities for making your brand a conversation starter are endless, so be creative and start looking outside the box for ideas that might launch your brand into the spotlight.
Understanding the emotional motivators of your target market involves analyzing the data response to various marketing techniques (not just your own, but your competitors) and identifying what moves the purchasing needle for your target audience and why. The goal here is to incorporate those same motivators into your branding so that your users will perceivably satisfy these needs by consuming your products or services.
Instead of focusing on making users feel happy only during the limited time they are using your products or services, encourage a sustained connection that will stay with them as they go about their day-to-day. Will they feel happy seeing someone else consuming your brand? Will they find themselves eager to try your other products or services? Will they incorporate their experience with your brand into conversations with their friends and colleagues? The key to achieving this sustained connection is putting additional energy into initiating and ending the user experience on an especially positive note.
#2 – Social Responsibility
As the global need for environmental awareness and social change is becoming increasingly urgent, companies that are seizing the opportunity to use their profits to make a social impact are in turn generating greater profits.
Social responsibility has nearly reached the point where it is expected of large companies, but participating companies of every size continue to be applauded for any efforts they make to increase environmental responsibility and enact positive social change. Whether you’ve switched to making your products with recycled plastic or are donating 5% of every sale to a worthy cause, your clientele will appreciate their funds going towards something more. Social impact is also an excellent way to generate emotional loyalty when your clientele is emotionally attached to a cause you are supporting.
#3 – Customer Appreciation
Customers like to feel appreciated for giving you their business and especially like to be rewarded for it. Even something as simple as one free cup of coffee for every nine cups purchased encourages repeat customers to go the extra mile to revisit your establishment. Rewards programs are a way of giving back to customers to say ‘thanks’ and to encourage them to bring their business back again.
Some general ideas for rewards programs are a buy one, get the next one 50% off sale, entries in a draw for every $20 spent, a 5-10% referral reward, or a points program. Shop around online for ideas or to find a program that integrates well into your industry.
#4 – Personalization
Personalization should be incorporated into all marketing strategies as much as possible, but particularly into email marketing.
When sending out promotions via email, it’s worthwhile to take the time to personalize each email. This can be done partially through coding in most e-marketing programs (i.e. making sure the campaign is addressed to the person’s first and/or last name).
If you’ve been collecting cookies, you will also be able to integrate products or services that are similar to each person’s recent purchases into each email.
Other ideas for personalizing your loyalty marketing strategy are adding your client’s favourite colours, incorporating the photo of a familiar salesperson, or offering your customers a choice of which cause they’d like a portion of the proceeds from their next purchase to go to.
#5 – Transparency
Lasting customer relationships are built on trust. When your company is transparent in its operations, your customers will have an easier time trusting your brand and will be more willing to purchase from your business over a competitor.
Five ways to publicly achieve transparency in your business are to establish your core values, to not make selling the goal, to answer consumer questions quickly and thoroughly, to make your social media a community, and to be open to change and other’s opinions.
Your core values should clearly be the motivator in all that you do. When you sell, your customers should see the relationship between your products or services and how increased sales will drive increased implementation of value-based actions.
Refrain from being vague in your responses. If you cannot answer a question entirely right away, answer as best you can and assure the customer you will send a more complete response shortly after conducting the necessary research.
Use your social media as a community outlet for clientele who share your values. Be open to suggestions and to changing procedural operations if presented with appropriate reasoning.
Remaining transparent and showing openness to change displays strength of character and demonstrates that your customers can rely on you to go above and beyond to retain their business and loyalty and to support what matters to them.
Have you had any experience with loyalty marketing? Let us know in the comment section of any thoughts and advice on the subject!