Customer loyalty is key when it comes to commercial success and longevity. Loyalty programs have always been a central aspect of marketing, and they continue to be a must for brands or retailers looking to convert occasional shoppers into frequent customers. Here are six things you need to know about customer loyalty and building a successful customer loyalty program:
1. What is customer loyalty? Customer loyalty is when a customer buys from a specific brand or retailer on an ongoing basis because of a positive shopping experience. The two foundations of customer loyalty are trust and confidence.
2. Why is it so important? Every business wants happy customers, so they keep buying their products and driving revenues. Satisfied customers will refer friends, write good reviews, and this word-of-mouth will generate interest and increase sales. Finally, loyal customers who trust and respect a brand will have a positive impact on its reputation.
3. How do you keep customers loyal? In addition to the two fundamental principles of customer loyalty – confidence and trust—there are four pillars to respect, namely being as generous as the customers, showing them gratitude, going beyond the “loyalty program” of points and rewards and offering benefits related to products or service everytime they make a purchase, and building a community of customers based on common values and interests.
4. What is a customer loyalty program? Brands and retailer offer loyalty programs to their frequent customers in the form of coupons, rewards, or free merch, to encourage them to purchase regularly and on a long-time basis. The most common loyalty programs used by companies are:
- Point-based. The most common, where frequent customers earn points that translate into rewards. It works best for businesses that encourage frequent and short-term purchases, like coffee shops, and is efficient when kept simple.
- Tiered. When customers get small rewards as a base offering for being a part of the loyalty program. It offers customers bigger rewards when they start buying often. It works well for businesses looking for a more serious commitment or offering more expensive goods and services like airlines or hotels.
- VIP. When a one-time fee is charged to customers to allow them to bypass common purchase barriers, such as abandoning their online cart after they discover shipping fees. Companies like Amazon Prime decided to address this issue by offering a loyalty program where customers are asked to pay an upfront fee when they sign up.
- Value-based. Based on an accurate analysis of customers’ needs and values. Some companies prefer this approach to discount codes and coupons because providing value instead of money resonates more with their target audience and strengthens confidence and trust.
- Partnerships. When a company offers its customers value that goes beyond its products or services. For instance, a coffee shop might partner with a local store selling reusable coffee mugs. This type of program shows that a company cares about their customers and understands their lives.
- Game-based. Everybody loves a contest or anything entertaining and fun. Turning a loyalty program into a game is a good way of encouraging customers to buy. Making a purchase fun and engaging is also good for branding.
5. Omnichannel loyalty: With customers spending more time online an e-Commerce sales soaring, brands and retailers have no choice but to reach their customers on every platform or device. Regardless of the type of loyalty program, businesses looking to build a successful overarching loyalty strategy should include an omnichannel program. A successful omnichannel loyalty program will connect a brand to its customers across all touchpoints of the customer journey, creating a seamless and enjoyable experience that will result in superior customer experience, confidence and trust, and more money spent.
6. How to measure customer loyalty: Like any other marketing initiative that you implement, you need to measure your loyalty program to determine its efficiency. This can be done with analytics, focusing on key indicators such as customer retention, and the Net Promoter Score (NPS) that measures customer satisfaction on a scale of 1 to 10.
Customer loyalty is central to your business’ long-term success. Loyal customers will become your brand ambassadors and their positive experience will increase traffic, boost sales, and ensure sustainable growth.
In addition to our digital payment and e-Commerce expertise, OTT Pay offers marketing services that provide our clients with key insights about their target audience and help them build omnichannel loyalty programs. Our official payment and marketing partnerships with Alipay, WeChat Pay, and UnionPay in Canada also gives us a unique opportunity to gather data from their platforms and use it to help our clients improve brand perception and loyalty. Contact our Customer Team today at email@example.com or give us a call at 1-800-688-9838 to start turning occasional shoppers into frequent customers!