How To Use Customer Loyalty Marketing To Retain Customers And Grow Your Business?
Most business organizations are frantically running after new prospects who often tend to ignore the ones they already have. The truth is that loyal customers can do more good for your business than your most expensive marketing campaigns. By retaining your existing customers, you can increase your profitability by up to 95%!
Hence, it is high time business organizations invest their time and money in customer loft marketing campaigns. Below we explain everything you need to know about retaining your customer base and using them to grow your business.
What Is Customer Loyalty Marketing?
Customer loyalty refers to the customer’s willingness to purchase or interact repeatedly with a brand or company. Loyal customers enable business organizations to grow and promote their brand among friends and family. Any conscious marketing effort that aims to improve the number of loyal customers is a customer loyalty marketing plan.
Quality products/services are essential for creating loyal customers. But the quality of your product or service is only half the recipe for success. The other half of the recipe involves providing customers with a delightful customer experience and interactions across various communication channels. A customer loyalty marketing strategy deals with the latter half.
In a broad sense, everything from your customer support to retargeting campaigns is a part of the customer loyalty marketing plan. But in a practical sense, loyalty marketing strategies offer something of value to existing customers and regularly engage with them. You can use different customer loyalty programs to better connect with your customers.
Any marketing strategy you formulate with the intention of boosting repeat purchases automatically becomes a customer loyalty marketing strategy. Most companies encourage repeat purchases by incentivizing them, and there are many ways to do this. We will discuss more of that as we move forward.
Why Is Customer Loyalty Marketing Important For Your Business?
Every business organization aspires to have a loyal customer base that supports all the products and services they sell. A perfect example of brand-loyal customers is automobile enthusiasts. You often find them swearing by the brand they drive, and nothing can convince them otherwise. A customer loyalty marketing strategy tries to create similar loyal customers for your business.
You can use a customer loyalty marketing strategy to create better relationships with their customers regardless of the type of business you run. But that’s not the only reason companies try to make loyal customers. Below are some of the most significant reasons or benefits of using castomer loyalty strategies for your business.
Boost Share-Of-Wallet (SOW)
It involves finding the total sum of money an individual or business organization spends on your brand compared to your competitors. You can boost your brand’s SOW with an effective customer loyalty marketing strategy. The loyalty marketing strategy does this by enticing your customers to spend more money and time interacting with your brand.
Increase Word-Of-Mouth Referrals
Another significant advantage of using customer loyalty marketing for your business is that it lets you increase word-of-mouth referrals. A shocking 92% of consumers trust the recommendations of a friend or someone they know. In effect, loyal customers can bring your more sales than your expensive PPC or ad campaigns.
A brand-loyal customer is happy to advocate for your brand, and they do so with conviction. There is a distinguishable difference between when you pay someone to promote your business and doing it voluntarily. Word-of-mouth referrals come in the latter group, and customer loyalty marketing plays a significant role in creating them.
Cultivate Trust
You can’t have loyalty in a relationship without trust, as they are not mutually exclusive. They are two sides of the same coin. Using customer loyalty marketing to boost customer loyalty can also help you gain the customer’s trust. And the trust of your customers can take your business organization to places you can hardly imagine.
You can use customer loyalty marketing to develop a strong trust between your brand and its customers. To accomplish this, you must ensure the value your customers get from their relationship with your brand outweighs the benefits your competitors offer. By doing so, your customers trust your brand and can provide them with a better deal than your competitors.
Retaining Is Easier Than Acquiring
The cost of retaining your existing customers is far less than the cost of acquiring new ones. It is one of the most significant reasons businesses use customer loyalty marketing campaigns. Acquiring new customers for your business is challenging because they may not know your brand, let alone trust it.
With your existing customers, things are very different because they already know your brand. Your current customers already know what to expect from your brand. That’s not all. If you create an attractive loyalty program, your customers will likely discuss that with their friends. In effect, customer loyalty marketing retains your customers and helps you acquire new ones through them.
How To Retain Customers Through Customer Loyalty Marketing?
Retaining customers and converting them into loyal customers and brand advocates requires time and effort. Having the right customer loyalty marketing strategy for your business can make a huge difference.
Executing a customer loyalty marketing strategy is no walk in the park. You need to ensure proper planning and execution to that loyalty marketing efforts have the right impact on the target audience. But how can you tell if you are taking the right marketing strategy that has the desirable effect on the audience?
Every successful customer loyalty marketing strategy has some common characteristics associated with it. By ensuring that your loyalty marketing efforts also have the same features, you can maximize the chance of your strategy’s success. The most significant characteristics of a successful loyalty marketing strategy are as follows.
Create Generous Loyalty Programs
A rule of thumb you can follow while creating a customer loyalty marketing strategy for your business is to be as generous as your customers. Even if your intentions are good, the customer would still think your loyalty program is a scheme to make them spend more. And in many cases, the customer is right to think so because several businesses use loyalty programs to sell more products.
You must show your customers that it is not just some elaborate scheme to make them spend excessive money. The best way to accomplish this is to implement a generous loyalty program. Your customer loyalty marketing campaign cannot create much impact if the rewards are too small and the investments are too significant.
Express Your Gratitude
Another characteristic of a successful customer loyalty marketing strategy is that it expresses gratitude toward the customer. Some of you may think that providing a generous loyalty program is gratitude enough for your business. But that is far from the truth. Remember that your competitors are already targeting your customers and will likely offer a loyalty program too.
Consider sending a thank you card every time the customer purchases or completes a year doing business with you. And if you want to make an impression, consider using handwritten notes as a part of your customer loyalty marketing plan. You can also include the thank you note with the product or attach it to the confirmation email.
An easy and efficient method for showing your gratitude to the customers is to send personalized thank you cards using an automated solution. Direct mail automation software like PostGrid can make sending your thank you postcards effortless for your business. Besides that, you can use PostGrid for your various customer loyalty marketing efforts.
Provide Additional Benefit For Each Purchase
Creating a successful customer loyalty marketing campaign requires you to extend additional benefits to your customers every time they purchase from your business. You don’t even need a loyalty program to execute this approach for your business. However, not using a loyalty program to provide customers benefits is more suited for companies that sell unique products/services.
We are not saying that you should cut corners by offering the lowest price or providing the most convenience to the customers. It means that if a particular product or service you offer is unavailable elsewhere, you don’t require a loyalty program. Consequently, it also means that you won’t need a customer loyalty marketing program either.
But you can only do this if you have a solid product service unrivalled by the competition. Moreover, you need to communicate the value of your product/service to the customer from your very first interaction with them.
Avoid The Loyalty Program Altogether
It may sound odd to hear that you should avoid the loyalty program altogether for an effective customer loyalty marketing campaign. Loyalty programs can help a lot in establishing your business and gaining the trust of your customers. But, it is not always the best approach for your business.
The truth is that you don’t need a loyalty program to provide excellent benefits to your customers. Instead, you can use a minimalistic approach to promote loyalty to your unique products and services. It involves presenting a product that redefines its category and using appropriate customer loyalty marketing ideas to impress the audience.
Build A Helpful Community For Your Customers
Customers tend not to trust a company or a brand until they prove its worth. Until then (and maybe even after), your customer is likelier to listen to what their fellow customers say. Create a community for your customers as a part of your customer loyalty marketing plan.
The community you create should be a safe place where your customers can interact with one another. Such communities can be crucial in finding out the drawbacks of your product or service. And you can rectify them before the word gets out on social media or other review sites. The only problem is that you must have a decent customer base for this customer loyalty marketing plan.
Consider creating a community forum to encourage customers to interact with each other and discuss relevant topics to the product/service. The best thing about this approach is that even if the customer feedback is negative, it remains in your private domain. It is an excellent customer loyalty marketing approach to get feedback from your customers and improve your product.
Maintain Effective Communication With Your Customers
Another crucial element in establishing trust with your customers is effective communication. Your customers are more likely to trust your business if they feel that your company is honest and transparent. All your interactions, including your customer loyalty marketing message, should be transparent and straightforward.
But, the primary aspect of your business that requires transparent communication is customer service. 89% of consumers are willing to trust a brand if it owns up to its mistakes and resolves an issue they face. Besides customer service, you can use a transparent customer loyalty marketing plan to pitch essential updates to the customer, such as the following.
- Launching a new product.
- Informing about a significant change to a product, service, Etc.
- Reporting about a substantial company or policy update.
- Changes in working hours.
- Conveying any other news or update that is relevant to the customer.
Improve Your Loyalty Programs
Above, we discussed how sometimes, having no loyalty program is better than having an incomplete one. In most cases, using a loyalty program makes it easier to run customer loyalty marketing campaigns and earn customer trust.
But the thing with loyalty programs is that you need to keep adding perks to them, so the customer stays engaged with your brand. Implementing loyalty programs and running customer loyalty marketing campaigns is not a one-time thing.
If your business can not afford an extensive loyalty program, make it more exclusive by targeting only your most frequent customers. It is a great way to reduce expenses while cultivating customer loyalty for your business. Consequently, it also leads to lower customer loyalty marketing expenses because of its exclusive nature.
Evolve Your Business And Loyalty Approaches Over Time
You must understand how quickly the market is changing today to keep up with customer requirements. Hence, it is essential to research and update your customer loyalty marketing strategy and everything associated with it.
Doing so can also help you show your customers that you are putting in the effort to serve them better. We are talking about a holistic evolution that considers all aspects of your business. After all, the customer doesn’t judge your firm solely based on your customer loyalty marketing efforts.
It is vital to show that every aspect of your business continually evolves to meet customer requirements. The best way to show this to your customers is by using an advanced customer loyalty marketing strategy that conveys all the information the customer needs.
What Is A Customer Loyalty Program, And What Are Its Different Types?
A customer loyalty program is a program that offers attractive rewards to the most frequent customers of a business. Many customer loyalty marketing strategies use these loyalty programs to attract customers.
Loyalty programs enable a business to strengthen its ties with its existing customers. The basic principle behind every loyalty program is the same. You incentivize your customers to buy from your brand repeatedly; the more they purchase, the more rewards they get. You can use the same characteristics to attract new customers in your customer loyalty marketing campaign.
There are different types of loyalty programs that you can consider for your business, and they include the following.
- Tiered Or Level-Based Loyalty Programs.
- Point-Based Loyalty Programs.
- Paid Or VIP Loyalty Programs.
- Coalition Or Partnered Loyalty Programs.
- Value-Based Loyalty Programs.
- Game-Based Loyalty Programs.
Tiered Or Level-Based Loyalty Programs
One of the most significant challenges associated with creating loyalty programs and, consecutively, a customer loyalty marketing campaign is striking the right balance. But how do you strike the right balance? And between what? Find a balanced reward that you can give away. It must be desirable to the customer but also achievable. The tiered loyalty programs can help you out of this problem.
Some elements that make a tiered loyalty program ideal for your customer loyalty marketing campaigns are as follows.
- Smaller rewards for joining the program or making the first purchase.
- Increase the value of prizes for repeat customers, encouraging brand loyal behaviour.
- Easier to remember the reward program as the value of rewards keeps increasing.
- It ensures the long-term value of the reward program.
Point-Based Loyalty Programs
It is the most common loyalty program in the market today. Every time a customer makes a purchase, they earn points which later convert to rewards. The reward can be in the form of discount codes, special offers, freebies, Etc. You can use a customer loyalty marketing campaign to highlight the benefit to your customers.
The key features that make a point-based loyalty program ideal for your customer loyalty marketing strategy include the following.
- Applicable to most businesses and industry verticals.
- It encourages frequent and short-term purchases.
- An interactive reward system that keeps the customer engaged with your business.
Paid Or VIP Loyalty Programs
Charging a fee for a loyalty program may seem counterintuitive at first glance. But, in certain circumstances, it is the best approach to take for your business organization. This system benefits your business and its loyal customers despite what you may think. Moreover, it is easy to feature a paid loyalty program in your customer loyalty marketing campaigns.
Following are some features of paid loyalty programs that are ideal for your customer loyalty marketing ideas.
- Overcome common purchase barriers.
- Avoid cart abandonment.
- Offer unique benefits to VIP customers.
Coalition Or Partnership Loyalty Programs
As the name suggests, the coalition or partnered loyalty program involves forming strategic partnerships with other organizations. You may highlight the collaboration in your customer loyalty marketing campaigns to attract more customers. But, it only works if the partnering organization is relevant to your business vertical and its target audience.
Some of the attractive aspects of a coalition or partnership loyalty program that can help your customer loyalty marketing campaign include the following.
- Gain more reach through your partnering organizations.
- Formulate mutually beneficial marketing strategies.
- Show your customers that you care about their challenges and objectives.
- Grow your network and branch out your business.
Value-Based Loyalty Programs
Another effective way to boost customer loyalty for your business and establish trust among your target audience is the value-based loyalty program. It is an effective way to understand your target audience, their values, and their desires. These characteristics make it an ideal loyalty program to feature in your customer loyalty marketing campaigns.
Some of the notable characteristics of a value-based loyalty program that can help your customer loyalty marketing strategy are as follows.
- Offer value-based rewards instead of monetary rewards.
- Ability to better connect with the customers by understanding what they value most.
- Foster trust and loyalty to your brand.
Game-Based Loyalty Programs
Suppose you are looking for a fun and interactive way to connect with your customer base. In that case, game-based loyalty programs are ideal for you. It involves turning your boring old loyalty program into something fun and consolidating your brand’s image. With a suitable game for your business, you can successfully create loyal customers without investing too much time in your customer loyalty marketing efforts.
Here are some of the most significant features of the game-based loyalty program that you can use in customer loyalty marketing efforts.
- It must have a winning rate of no less than 25%.
- It can work for all types of businesses.
- It is significantly more engaging than other loyalty programs.
Top 3 Customer Loyalty Marketing Strategy To Try For Your Business
There are numerous customer loyalty marketing strategies that businesses use today. You must learn at least some of the most effective ones among these strategies to strengthen your loyalty marketing efforts.
Below we discuss some of the best customer loyalty marketing strategies you can use to cultivate loyal customers for your brand.
#1 Obtain And Use Customer Feedbacks And Reviews
Some business organizations fear customer feedback and reviews because they are not confident about their products/services. But it doesn’t have to be like that. You can make the best out of your customer feedback and reviews. Consider using customer feedback in your customer loyalty marketing strategy to promote brand loyalty.
Use Social Media To Collect Customer Feedback
Social media is now one of the best ways to collect customer feedback about a product or service. You should use social media to manage customer feedback and loyalty marketing campaigns.
Imagine a customer tags your company’s social media handle on a social media platform like Twitter. By immediately responding to your customer’s feedback, you can show that your organization is always there to serve its customers. Such steps can contribute to your customer loyalty marketing efforts and make your customers feel appreciated.
Utilize Customer Satisfaction Surveys
Another excellent way to optimize your customer loyalty marketing efforts is to utilize customer satisfaction surveys via social media. But it would be best to keep in mind that your survey is short of ensuring maximum participation. Survey poll posts on social media platforms like Instagram and Twitter are ideal for getting quick feedback from customers and gathering valuable feedback.
Request For A Review
An effective way to collect customer feedback is to request it directly from them. There are risks associated with collecting more reviews for your business or product, such as facing public criticism. But there is no way around customer objections, and no product is perfect. Requesting a personal review from the customer and rectifying their issues is an effective customer loyalty marketing strategy.
#2 Feature Your Most Loyal Customers In Your Social Media Handles
An innovative way to interact with your customers and show them appreciation is to feature your most loyal customers on social media. Post a picture of your most loyal customers on your social media channels with an appropriate title to show your appreciation. It is an effective way to run your customer loyalty marketing campaign with minimal effort and cost.
Furthermore, social media platforms are also great for boosting customer interaction via UGC or User-Generated Content. You can improve your customer interactions by incentivizing them and also encouraging customers to promote your content/post in their networks. Such customer loyalty marketing efforts can run organically and requires no additional investments.
#3 Utilize Automated Direct Mail Marketing
One of the most effective ways to promote your customer loyalty marketing programs is to use automated direct mail marketing. Advanced software solutions like PostGrid enable you to send personalized postcards, letters, brochures, and other marketing materials quickly.
Direct mail letters and postcards are ideal for your customer loyalty marketing strategy because they tend to be more personal than digital messages. Sending customers a personalized birthday card or holiday postcard makes them feel valued by your business.
More importantly, the entire process of personalizing and printing the communication material is fully automated. You have to do nothing other than set up a template and click a few buttons to execute your bulk mail campaigns. The other features that make direct mail automation an ideal channel for your customer loyalty marketing campaign are as follows.
Scheduled/Triggered Direct Mail
One of the most challenging things about customer loyalty marketing campaigns is to get the timing right. Unless you have automation capability, it can turn into a nightmare for your business. The scheduled mail feature from PostGrid enables you to schedule the delivery of your letter at a specific time and date.
It is an excellent way to ensure you do not miss any important dates, such as the customer’s birthday/anniversary Etc. You can send a postcard wishing the customer and even throw in some incentive to celebrate the occasion. Such a customer loyalty marketing approach can go a long way in establishing trust and paves the way to a long-term relationship.
PostGrid also offers a triggered mail feature which can automatically send a mail upon the customer completing a triggering action. The triggering step could be purchasing a product/service or signing up for newsletters. Similar to scheduled mail, this features also ensures appropriate communication and facilitates more effective customer loyalty marketing campaigns.
Quick And Effective Direct Mail Personalization With CRM Integration
One thing that makes an automated direct mail system like PostGrid perfect for customer loyalty marketing campaigns is its personalization capabilities. You can integrate PostGrid’s direct mail API directly with your CRM solution for quick and accurate direct mail personalization.
By connecting the direct mail API with your CRM, the system can directly access customer data from your CRM. It can then use the CRM data to personalize your mailers and send them straight to your customers. Doing so can significantly improve your customer loyalty marketing campaign because personalization helps you connect with your audience.
It enables you to offer the customer the most relevant or desirable product using their purchase history. Moreover, it allows you to create a customer loyalty marketing strategy that focuses on your customers and make them feel special.
You can also use PostGrid’s automated direct mail solution to communicate effectively with your customers. Set up a free demo to see how to use PostGrid’s solution to optimize your customer loyalty marketing efforts.
