The Art and Strategy of Creating Customer Loyalty for Your Brand

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Customer loyalty is a privilege, not an entitlement.

For some brands, creating customer loyalty is about strategy. For others, it’s an art form. For a third group of brands, driving customer loyalty is part art, part science. Irrespective of the school of thought, the customer experience should always be top-of-mind for brands vying for the attention of that all-important devoted customer.

With research published in the Harvard Business Review showing that it costs in the neighborhood of five to 25 times more to land a new customer than it does to keep an existing one, the smart money is on developing a loyal customer following.

Loyal customers buy more regularly, spend more in each transaction and are more likely to choose the same brand in future. Couple this with frequent (not to mention free) advertising through word-of-mouth recommendations and positive online reviews, what’s not to like about customer loyalty?

Levels of Loyalty: Customer Loyalty and Brand Loyalty

Customer loyalty and brand loyalty are often used interchangeably, but they’re actually different.

Money plays a big part in customer loyalty. If a company is offering the lowest prices and most competitive deals, customers will often stick to that company like glue. On the other hand, brand loyalty focuses on the customer’s perception of a brand. Amazon CEO, Jeff Bezos, said it best: “Your brand is what other people say about you when you’re not in the room.” Brand loyalty is less to do with pricing and more to do with the customer experience, the company’s reputation, its marketing efforts and so on.

Customer loyalty can therefore be earned through competitive pricing, special offers and the like whereas brand loyalty can be earned by a company remaining committed to its values and delivering quality products, services and support. When a company is in pole position to achieve both levels of customer loyalty, its customer retention increases exponentially.

There are loyal customers and there are loyal customers. The ultimate level of brand loyalty is achieved when a company develops a cult following where customers feel a sense of brand ownership and they embrace more than a product, but a lifestyle. For a classic case of brand loyalty, look no further than Apple iPhone users.

Not every brand can lay claim to having fanatical customers who form mile-long lines (around several blocks) hours before its stores open – all in anticipation of its latest product release. But Apple can. Some die-hard iPhone customers even camp out from the night before.

Strategy for Creating Customer Loyalty

Here are four elements that make up a winning strategy for driving customer loyalty.

1. Prioritize the Customer Experience

Customer experience is the new battleground for business.

The Salesforce ‘State of the Connected Customer’ 2018 report found that 80 per cent of customers put the experience a company delivers and its products and services on an equal footing. With this in mind, companies wanting to differentiate themselves from their competitors would do well to focus their efforts on maximizing the quality of their customer journey.

Today’s customers expect brands to know who they are and to react accordingly with every interaction. To get ahead, companies can find out what, when and how their customers buy products and services and use this information to tailor their service.

Interacting with customers at every stage of the customer journey enables companies to offer a personalized experience rather than sending annoying marketing messages at the most inopportune times! Serving customized information throughout the customer journey presents opportunities to up-sell, cross-sell and drive customer loyalty. Let’s say you’re a travel agent. Your company could send customers information about their favorite resorts at or around the time when they typically book vacations. When it comes to the purchasing cycle, timing is everything.

Gladly’s API positions your company to integrate key customer information with your customer master system or order management system. This provides your company with even more context about the customer including recent purchases, service entitlements and the like.

[Not sure where you can improve the customer experience? Read: Customer Satisfaction Survey]

2. Nurture the Customer Relationship (Beyond the Purchase)

Most customers have experienced an over-eager sales rep at one time or another.

You know, the one who is anxious to answer all your questions and provides you with every product demo under the sun only for you to buy the product and then, as if by magic, they disappear. If you have a question once the sale has gone through, the only sound you’re likely to hear is crickets.

When Money Inc. stops helping its customers once they’ve bought a product or service, it sends out a very clear message: “We just wanted your money.” By contrast, when We Care Ltd nurtures the customer relationship with aftercare and ongoing support, it shows customers that the brand really cares about their experience and is in it for the long haul. It will come as no surprise that customers are more likely to be loyal to We Care Ltd.

3. Acknowledge Customers in Content Campaigns

Everyone likes to be acknowledged.

Your company can boost customer loyalty by creating content about your customers. This gives your brand a ‘human’ face and builds trust among your target audience.

Virgin Atlantic does a great job of showcasing customers in its videos, which explore its services through the eyes of real customers. If videos aren’t on the cards, your company can use:

• Case studies;
• Testimonials; and
• Social media posts.

Featuring your customers in public-facing content makes them feel valued and more engaged with your company. More often than not, loyalty will follow suit.

4. Administer a Customer Loyalty Program (With Personalized Incentives)

Customer loyalty is valuable. So, what better way to ‘repay’ customers for their loyalty than to give them a reward?

The most popular customer loyalty programs involve customers earning points and working towards redeeming some sort of reward – this could be anything from a discount, VIP treatment or a freebie.

Whilst many customers are satisfied with conventional monetary incentives, your company can go up a notch and edge out the competition by personalizing incentives based on a customer’s history and preferences. For instance, you could offer Daisy a discount on a product that complements products she purchased from your company in the past.

One-size-fits-all incentives give the impression that a customer is just another number in your company’s burgeoning loyalty program. But personalized incentives demonstrate that your company cares enough about each customer that it wants to provide a reward that they will value most.

Gladly gives your company access to your customers’ purchase history, so it can tailor its customer loyalty program in such a way that all of its customers will be satisfied with the outcome. Given the relationship between customer loyalty and customer satisfaction, a satisfied customer is often a loyal one, too.

There are various ways to measure customer loyalty including share of wallet, customer lifetime value, sales per customer, active customer volume, visit frequency, recency, spend per transaction, retention rate, engagement index and the Net Promoter Score. To find out how Gladly can keep your loyal customers coming back for more, take a minute to sign-up for our demo now.