While money is vital to running and growing a business, it's not the only measure of business growth. Often, people think that it's the revenue generated that gauges a business's success. Customer loyalty is equally valuable as it's a significant differentiator between landing an initial sale and enticing customers to engage more and stay loyal to your business.
Building customer loyalty is about forging long-term and healthy customer relationships. Doing this entails implementing loyalty marketing, a marketing strategy that helps retain existing customers. Without loyalty marketing, creating customer loyalty would be a challenging feat.
If your goal is to grow your business's customer loyalty, this article will cover how loyalty marketing works and why it's vital.
Understanding Customer Loyalty Marketing
Loyalty marketing is a marketing strategy hinged on growing and retaining loyal customers. Consistently winning your customer's loyalty means providing them various incentives, such as free shipping, loyalty points, free upgrades, and price reductions for purchases made and online engagements.
Despite its value, some businesses focus more on acquiring more customers than retaining them, which isn't as beneficial as it seems. As an effect, companies overlook the importance of strengthening relationships with current customers.
Fortunately, marketers nowadays focus on enhancing retention and loyalty with their existing customers. It's a vital process that leads to more sales opportunities, greater brand awareness, and, most importantly, happier and more loyal customers.
The Importance of Loyalty Marketing
Here are seven reasons why loyalty marketing is paramount to your business's marketing efforts:
- Customer retention can be cheaper than acquisition
According to a study, getting new customers costs five times more than keeping their current ones.
Losing customers is just like losing employees at work. It takes a lot of time and effort to replace people that bring value to your company. To avoid this, show your customers you value their commitment to your business. Do this by prioritizing positive experiences for them. You can provide loyalty incentives, high-quality products, and great customer service.
Investing in top-notch experiences lessens the acquisition cost and enables more growth for your business's relationship with its customers. As a result, your current customers become compelled to promote your products and services to others, boosting your sales and customer retention.
- Trust is a significant factor in your customer's purchasing decisions
The greater the trust, the more your customers will purchase your products and services. Whether offering new services or making products available in specific areas, you must aim to keep your customer's trust.
In fact, according to a study, 44% of consumers worldwide say they'll spend $500 or more per year with highly trusted brands. Among that group, almost 29% say they can spend more than $1,000 annually.
The point here is that trusted brands provide excellent customer experiences and tailor-fit them to each customer's preferences, ultimately simplifying their purchasing decisions.
- Brand loyalty creates better brand recognition
Brand loyalty is advantageous. Apart from forming emotional connections, it makes selling your products and services to customers easier via better brand recognition.
Customers that frequently discuss your products and services don't just elevate your brand's popularity; it also serves as free marketing, making your brand more recognizable in the market.
- Emotional connections translate to more commitment
Emotional connections develop as your customers become more familiar and satisfied with your business's products and services. These connections indicate that your customers align well with your company's standards and values.
According to a study, customers with healthy brand relationships are 71% more inclined to recommend them to others. Through solid emotional connections, customers feel a stronger desire to commit to your business, giving it a competitive edge over others.
- Data collation on your shoppers allows your business to refine their shopping experiences
Thanks to loyalty programs and digital technology, businesses can collate shopping-related data on their customer's shopping experiences. According to a study, 86% of customers are willing to pay more if they receive better customer experiences.
Gaining a deeper understanding of your customer's information, such as most purchased products, preferred online channels, and geographic location, allows you to refine their shopping experiences.
Always keep track of what's going well and address existing pain points to consistently deliver top-quality shopping experiences to your customers.
- Brand loyalty influences existing customers to try new products and services
Existing customers already trust your business's products and services, so there's no question their brand loyalty will convince them to try your new products. The chances of selling new products and services to current customers are 60%-70% versus 5%-20% for new leads.
- Your business's profits increase
Repeat purchases mean more revenue is generated, which is achievable through building and increasing brand royalty. Research found that 88% of consumer say it takes around three sales or more before brand loyalty takes place. In contrast, 37% say they need to land five deals or more before committing to a brand, while 12% are ready to engage with just two sal.
Loyalty Marketing for Royalty
Loyalty marketing is a crucial step for businesses to take in forming long-lasting relationships with their customers. The process is lengthy and challenging, but with proper planning and a keen understanding of the appropriate customer loyalty programs, loyalty marketing is the best method to encourage customers to stay.
RUSH is an all-in-one eCommerce solutions company that helps businesses foster meaningful customer relationships through effective end-to-end digital solutions. With 150 brands we've worked with and 5 million users, we're more than ready to assist you in elevating your business's online reach and customer loyalty.
Book a demo now if you're interested in learning about the customer loyalty plans that would work best for your business!
