The significance of customer loyalty
Customer loyalty is inherently significant if you want to achieve your marketing objectives and strategy. Loyal customers are hard earned and the payoff for you can be increase sales, repeat business, and to encourage your customers to make your brand the first choice rather than the competitors by. But what can you do you encourage customer loyalty? Let’s look at four popular methods: special offers, discounts, loyalty cards, and a higher level of service.
Special offers
These are anything that promotes a product by applying some kind of special offer that makes buying that product or service (at that time) better value for the customer. Special offers can be combination deals (buy 2 get 1 free), or associated product or service discounts (buy now and get free support for the first 6 months), and more. To encourage customer loyalty, these would be available or enhanced for customers that have demonstrated some kind of loyalty to the brand.
Discounts
Discounts are very powerful to encourage continued loyalty by offering money off regular priced products or services to customers who have purchased repeatedly in the past. Discounts also make it very attractive for first time customers to return by promising of future discounts.
Loyalty cards
Loyalty cards have been popular for many years, and are getting more popular as retailers switch from plastic or paper based (stamped) cards to digital app or web based cards. The more you buy, the more points you accumulate, and the more “free stuff” you can claim. A recent study by points.com have shown that up to 54% of consumers buy more from companies when they are being rewarded for purchases (points.com) but a poorly managed loyalty cards system can have the opposite effect of retaining customers where points unexpectedly expire or goal posts frequently change.
Higher level of service
The quality of service cannot be understated and many customers consider this a priority when choosing who to trade with and most are likely to leave if poor service is experienced. American Express surveyed their customers in 2011 and found that up to 80% of customer would not return to a business after a bad customer service experience.
Up Next
In the final lesson of this course we will look at how you might measure return on your investment.