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5 Easy Ways to Build Customer Loyalty and It’s Outcome on Your Business

By Liza Shuttleworth Last updated: 8 minute read Customer Insights & LoyaltyMarketing Guides

Ever had difficulty retaining your current clients?

Imagine this: you have the best product, the most advanced marketing tool, you’re actively engaging in social media, and you have pretty much established your brand in the industry.

But there seems to be something lacking. Somehow, you notice that you do not have recurring customers. Your customers are easily swayed by your competitors even though they loved your brand.

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    So, can you do to make sure they stay? The answer is simple – loyalty marketing.
    Credit: The HUMAN Brand

    What is Customer Loyalty Marketing

    This is a type of approach in marketing that focuses on gaining new customers and retaining the old ones.

    For this to be achieved, businesses have come up with different incentive programs to entice their customers.

    Incentives can be in the form of rewards, discounts, or exclusive access to some of your items.

    From the term itself, loyalty marketing is the best strategy to make sure your customers will do business with you over and over again.

    You don’t want them to just adore your brand. You want your brand to be a part of their lifestyle.

    Belief driven buyer

    How to Build Customer Loyalty

    1. Be open to criticism

    Every business owner knows that there should always be room for improvement.

    And there’s no better way to improve than asking help from your dear customers.

    When they test your products, they will always have something to share about it. They can express their inputs on how to improve your product.

    You can provide support and feedback via social media platforms like Facebook, Twitter, and even Instagram.

    Customers are almost always likely to share their thoughts on an item via social media.

    When you engage and respond to their tweets or comments, your customers’ frustrations are lessened and you build a reputation for having excellent customer service.

    2. Build a Point-Based System

    This is probably the most common form of loyalty marketing and we’re pretty sure you have encountered this type, too.

    Each purchase translates into points that can be used as a form of discount. Say for example, for every purchase of a product worth $10, a customer gets 2 points.

    Once the target points are achieved, they are entitled to freebies, a “buy 1 take 1” deal or a 30% discount on their next visit.

    Although the points-based system is commonly used nowadays, it is not applicable to all businesses. This kind of marketing works best in the retail and food industries.

    3. Create a Charitable Incentive

    You’d be surprised to know that not all customers are encouraged by discounts and freebies. Customers also love businesses that give back to the community.

    This means that you can incorporate your business’ values into your incentive to build a stronger relationship with your customers. Sharing the same values as that of your customers increases their loyalty to your brand.

    So, how does this kind of strategy work? This works by allowing the customers to donate the reward points they earned to the cause you both support. For example, 4 points are convertible to $1.

    So for every five points that they choose to donate, you will be giving a dollar to the cause.

    Choose any organizations that need help and whose advocacies you adhere to the most. For sure, your customers will appreciate this kind of incentive as they would also like to contribute to a better world.

    4. Provide a Punch Card Reward System

    While the use of apps and other platforms are great tools for promoting rewards and incentives to the customers, paper cards are still relevant in this line of marketing.

    Small businesses are inclined to give out paper cards that were punched or marked after their products are purchased. Once the customer has filled out the card, they are entitled to redeem a certain reward.

    Have you ever experienced going to your local sandwich store and having the cashier punch or mark a little circle on your card? And then they will remind you that after 8 or 9 punches, you get to claim their free sandwich of your choice.

    Does the condition of having to buy 8 items in order to get the reward of a free item seem worth it? Some claim that location, proximity, and foot traffic still have a larger impact on gaining the loyalty of the customers. But it sure feels nice to receive a free item at the end of the day.

    So this is still a good thing to consider. And while you’re handing out these paper cards, you can also give out business cards, flyers, or booklets where you can be contacted in case of queries or concerns.

    This could be added as a great customer service strategy.

    5. Collaborate With Other Businesses

    Customers always anticipate whether a brand has something new to offer. That includes you, other than launching your new product, introducing an item that no one has ever encountered before.

    This is attainable by working in collaboration with different brands that can elevate your item and highlight the best feature of your product.

    But how can you gain your customer’s loyalty by merely collaborating with other businesses? Simple – you provide an incentive where your customers can earn rewards from two or more retailers with just one purchase. 

    This works by promoting a discount to other stores if they decide to buy your item and, in return, the other stores you’re partnered with will do the same.

    This program is appealing for the customers and efficient for the businesses. But it is important that your items are customer-focused and brand-aligned.

    If you tend to focus on the program itself, you will eventually forget the very purpose of loyalty marketing – to satisfy your customers enough to gain loyalty.

    loyalty by age group

    3 Effects of Loyalty Marketing on Your Business

    Now that you have at least the best five ways to conduct loyalty marketing, you might be wondering what happens after implementing the best loyalty program for you.

    If the program you chose works exactly the way you planned, there are three things that you can expect from the program – customers will visit frequently, you gain win-backs from the customers you have lost, and your revenue increases for every visit.

    Consumer attitude towards loyalty marketing

    1. Frequent Visits

    From whatever programs you choose, the customers expect that they will earn a reward at the end of the day.

    This means that if they used to go to your shop once or twice a week, they will likely increase their visits to three times a week since they now have something to look forward to.

    This is why it is always important that you remind your customers of how close they are to getting their next reward upon purchase (this could be through email or SMS).

    You can also encourage them to visit when it’s not peak hours so they have ample time to check out each item in your store. 

    2. Win-backs from Lost and Inactive Customers

    You know that you have inactive customers and you’re aware that you also lose some every day.

    But to get a clearer perspective, let’s do the math here: when somebody walks into your shop or restaurant, there’s a 50% chance that they won’t come back after the first visit.

    And for each month that passes after that visit, the probability of customers returning lowers also up to 50%.

    And you might be wondering why this happens. It’s because they have countless other places they can go.

    It’s not that they did not have a great experience with your business. It just so happens that they keep trying to look for new things to try.

    But with loyalty programs, your customers have more and more reasons to go back. They realize that your business isn’t just there to profit from them and that you care about their preferences.

    With loyalty marketing, you make them see that you are open to innovation by partnering up with other businesses that can develop further your brand. 

    3. Increase in Revenue

    Having frequent visits and inactive customers coming back to your business means one thing – more money.

    You can use this money to improve your business, adapt more marketing strategies, or even branch out.

    Though, the initial step of this program is difficult since you would need to earn your customers’ interest and trust.

    The best thing to finding out what to offer is by really listening to what they’re saying and by knowing exactly what they want. 

    At the end of the day, choosing the right program for your business is what matters. Remember: success is always about focusing on your customers.

    Frequently Asked Questions

    What is Customer Loyalty Marketing?

    This is a type of approach in marketing that focuses on gaining new customers and retaining the old ones. For this to be achieved, businesses have come up with different incentive programs to entice their customers. More on Loyalty Marketing in the complete article.

    How to build Customer Loyalty?

    You can build customer loyalty by improving your market offering based on feedback from the customers, and by providing them different rewards to retain them. Learn more about building Customer Loyalty in the full guide.

    What are the effects of Loyalty Marketing on a business?

    Loyalty Marketing can help increase customer visits, boost conversion rates, and reactivate inactive or old customers. Learn more on how Loyalty Marketing can help your business in the complete article.