Loyal Customers Help Businesses Strive: What Makes Them Stay?
Washburn-Crosby Company launched the first customer loyalty program for the Betty Crocker brand in1929. Ever since, not matter how much technology advancements have changed the way people shop, rewards services have been a corner stone of brands and companies of all sizes.
A rewards program is not just a way to entice consumers. It’s a method to re-market to loyal customers in a way that enhances their relationship with the brand.
The Internet and mobile shopping have definitely changed the way people shop and also the way they perceive brands. But some loyalty programs are still effective today. What makes these customers stay in today’s on-demand marketplace? The answer seems simple: Give them what they want. They want access everywhere, anytime. If you allow your customer to benefit from their loyalty to you at every touchpoint, then you can’t miss the mark.
Look at Starbucks. They register 6 million mobile app transactions every single week. The app is not your usual “card loyalty program” and allows customers to benefit from rewards quickly and easily. And Starbucks doesn’t stop there. Everywhere you see their brand, there’s way for you to use your loyalty rewards, be that the grocery store, kiosks on the street or using the “Gold Card”, which is a reward in itself.
2 Steps to make loyal customers stay
Big companies like Starbucks don’t have the monopoly on loyalty at every touch point. You can also reach your customers through email marketing efforts, customer service help desk, live chat and re-marketing offers. These are all potential touchpoints you can use. So how do you do it?
1. Loyal customers are in for the long-term
This is basically to say you need to focus on long-term benefits and not short-term gains. They will stay if they see value in your product or services that expands over time. In the same vein, your rewards program should expand over time and it should also show this extended value. A Colloquy survey showed that nearly half of the marketers surveyed split their acquisition and retention efforts 50-50. Only 18% of the respondents spent more on retention, even though several research studies have shown that existing customers are 50% more likely to try new products and spend 31% more compared to new customers.
2. Loyal customers have different values
Another common misfire of brands is marketing their rewards the same way to new and existing customers. This should not happen, as new customer attribute value differently. Acquisition needs to focus on transactional value, as new customers are attracted by discounts or sign up bonuses. Retention, on the other hand, needs to focus on emotional value, as existing customers are interested in topics like program simplicity, time to earn rewards, etc.
If you want your loyal customers to stay, you need to market your rewards program in different ways depending on where consumers are in their customer journey with your brand. Also, integrate your discounts, promotions, offers and pricing into the loyalty program, even inventory management, and that way the program is not your sole retention effort, it is just an integral part of it.
Give more to have more
Obviously, no businesses can sustain giving away big parts of your inventory recurrently. You also don’t want to be just “another loyalty program” with all of them out there, because there are so many. An effective way to stand out and also offer more to your customers is through partnerships. Many case studies and surveys have shown that strategic partnerships increase the chances of customer retention.
Consumers not only associate one with brand with another through these partnerships, which increases the exposure of both sides, but also are able to earn rewards faster. Whether it’s a free Starbucks coffee with their Lyft ride or earning miles when using their credit card, consumers are enticed by the possibility to earn more rewards faster. This has been shown to in fact impact the bottom line of the original source. Customers are more willing to spend what it takes to earn those rewards, as the sense of completion is enhanced.