It’s difficult to overstate the importance of loyalty. It’s an essential part of how we live our lives; it permeates countless choices that we make on a daily basis, from who we spend our time with, to the music we listen to, to the restaurants we choose to eat in.
For retailers, a loyal customer is the gold standard. They’re the people that will keep coming back to your brand time and again; they’ll purchase without needing to be heavily marketed to, and they’re likely to advocate your brand without any prompting. They’re the supporters all brands are on the lookout for.
There’s plenty of research to showcase the value of long-term loyalty. 60% of loyal customers will purchase more frequently from their preferred companies, according to InMoment, while Motista research suggests customers who have an emotional relationship with a brand have a 306% higher lifetime value. Additionally, Annex Cloud suggests the average customer spends 67% more in their third year than their first year with a business.
However, according to Forbes, three-quarters of first-time buyers don’t purchase from the same online shop again, something that can perhaps be attributed to intense levels of competition, or could be the consequence of them having poor brand experiences.
Brands are effectively throwing away money by failing to retain shoppers’ interest and by not giving them enough of a reason to remain loyal. So, how can brands inspire — and subsequently maintain — loyalty? What really makes a difference to consumers, and how can retailers drive a positive emotional response from shoppers?
Do the basics well
All loyal customers are, first and foremost, happy customers. And the best way to make someone immediately happy is to make their experience seamless, stress-free and as valuable as possible. This is, however, just the start; loyalty requires more than simply having a good website, logical checkout system, or one-off discounts and sales that draw the eye.
One of the most effective ways of turning a one-time customer into a repeat buyer that will, generally speaking, choose your brand over a competitor, starts with giving them a reason to hand over their first-party data. By getting a customer to sign up for a newsletter or opt-in to marketing about a particular product or line, you’ll be able to reach them directly, keeping them updated on everything they’re interested in.
The key here is being able to market to a customer on a personal level. If you’re able to understand each shopper on a one-to-one basis, can provide them with offers and suggestions that they’re all-but guaranteed to love, can issue timely reminders and updates regarding products they’ve already interacted with, and can genuinely engage with them on a one-to-one basis, they’ll be well on the way to becoming a long-term loyalist.
Forward-thinking brands can drive customer retention levels by delivering scalable, dependable and tailored customer experiences. This isn’t just theorising: it really works. Research has found that personalisation drives far greater performance and leads to improved customer outcomes; in fact, “companies that grow faster drive 40 percent more of their revenue from personalisation than their slower-growing counterparts,” according to Mckinsey.
Retailers need to figure out how to recognise what their customers like, what they generally avoid, when it’s best to reach out, and via what medium they want to receive messaging. This in-depth, personalised level of relationship building is the foundation for ensuring a customer becomes a loyal one, rather than a lapsed one.
Less is more (and better)
Brands don’t need to offer customers the world: they just need to provide products or services that are useful, effective and impactful, and they need to do it in a manner that works for all parties. The same goes for communications; people don’t want to be peppered with generic emails and texts – they’d much rather just see content that aligns with their interests, preferences and shopping habits.
Wunderkind research has found that less frequent but more meaningful insight-led interactions is something customers really want from the brands they deal with. 43% of consumers consider this ‘less is more’ approach the main way brands could improve the customer experience. Providing tailored offers and promotions based on a one-to-one understanding of the shopper was just behind on 40%.
A study by Epsilon discovered that 80% of customers are more likely to buy from a brand that offers them a personalised experience, whileStatista research has found that nine in 10 customers say unpersonalised brand messages are “annoying”. Two-thirds of consumers now actively expect the brands they engage with to recognise and appreciate their bespoke needs, expectations and interests, so being able to do this intelligently is, it would seem, essential for retailers seeking return custom.
Less is more (and better)
Brands don’t need to offer customers the world: they just need to provide products or services that are useful, effective and impactful, and they need to do it in a manner that works for all parties. The same goes for communications; people don’t want to be peppered with generic emails and texts – they’d much rather just see content that aligns with their interests, preferences and shopping habits.
Wunderkind research has found that less frequent but more meaningful insight-led interactions is something customers really want from the brands they deal with. 43% of consumers consider this ‘less is more’ approach the main way brands could improve the customer experience. Providing tailored offers and promotions based on a one-to-one understanding of the shopper was just behind on 40%.
A study by Epsilon discovered that 80% of customers are more likely to buy from a brand that offers them a personalised experience, while Statista research has found that nine in 10 customers say unpersonalised brand messages are “annoying”. Two-thirds of consumers now actively expect the brands they engage with to recognise and appreciate their bespoke needs, expectations and interests, so being able to do this intelligently is, it would seem, essential for retailers seeking return custom.
Provide value beyond the product
Customers don’t develop an affinity with a brand simply because they sell nice products at reasonable prices (though this does, of course, help). What really makes a long-term, memorable impact is going above and beyond to provide guidance, help and, where necessary, reassurance: brands have to be the total package to get customers on-side.
For example, if customers recognise that your approach to customer service is strong, and are confident that you’ll help them resolve issues as soon as they arise, they’re far more likely to remain loyal. On the flip side, if they have an experience they deem unsatisfactory or, heaven forbid, terrible, it’ll be tricky to bring them back. In fact, some research has found that 96% of customers will leave a brand if they experience a bad service.
It all boils down to keeping those customers you’ve worked hard to acquire happy. Getting someone interested in your brand, and doing enough to get them to hand over data, is just the beginning; keeping them engaged and content over the long-term is the real challenge, and that means promoting everything that makes your brand special. And, given that research carried out by Frederick Reichheld of Bain & Company has found that increasing customer retention rates by 5% can grow profits by as much as 95%, it’s something eminently worth doing.
Loyalty spreads the word
Loyal customers do more than just buy products and engage with your brand – they also go out of their way to spread the word. Forbes research has found that 77% of customers would recommend a brand to a friend after having just one positive experience, which, given 81% of customers say they trust the recommendations given by friends and family, is a big deal. On the flip side, angry American customers say they will share a negative brand experience with, and give “anti-referrals” to, 15 people, which is clearly something to avoid at all costs.
Tactics and approaches
Customer retention sounds great — and it is! — but it takes patience, effort and utilisation of the right approaches. 61% of retailers say that customer retention is their biggest challenge, while 80% of customers say they gradually gain loyalty for a brand over time due to experiences with both products and customer service. It’s a process, and retailers need to invest in it.
Three-quarters of consumers say they consider brand loyalty to be more about “feeling understood and valued” than being handed discounts, offers or perks, so in terms of actual approaches, what does this mean?
- Understand and respond to customer needs
HubSpot has found that 93% of customers are likely to make repeat purchases with companies who offer excellent customer service. Customers develop relationships with brands that take the time to communicate with them on a one-to-one basis; listen to what they want and go above and beyond to deliver value.
- Take a personalised approach
Consumers like personalisation. More than eight in 10 customers say they feel more positive about a brand after engaging with personalised content, while a Deloitte paper found that personalisation leads businesses to “benefit from increased conversion levels and increased loyalty,” also stating that “the consumer receiving a personalised experience will feel more valued and recognised.” By making use of first-party data, and by really making an effort to understand individual consumers’ behaviour, habits and needs, brands will be well positioned to make a customer loyal over the long term.
- Carefully balance acquisition and retention
Acquiring new customers is vital for all businesses, but keeping old ones is just as — if not more — critical. Experts and commentators often say that, on average, brands spend 5x more on acquisition than retention — whether this is strictly accurate isn’t clear — but there’s no doubt that many brands do put more time and investment into acquiring new customers than they do keeping current ones. 59 percent of U.S. consumers report that once they are loyal to a brand, the brand has their loyalty for life, while loyal customers spend 67% more with a business than new ones, so it really makes sense for brands to hone in on retention.
