What drives customer loyalty, and how can it be improved?
Creating and maintaining customer loyalty is a constant challenge across all industries and sectors for ecommerce and marketing managers. Here are 8 tips for improving customer loyalty:
All brands, large or small, need to have a clear understanding of their customers, business challenges and their long-term goals before loyalty schemes come into play.
2. Tap into hearts and minds
There are two types of loyalty:
Emotional loyalty is about feelings and experiences; it doesn’t always deliver to the bottom line in the short term, but it does create relationships and advocacy.
Functional loyalty is where consumers buy from you because it’s easy or affordable or directly fulfils an immediate need.
Successful brands are those which can reach both aspects of emotional and functional consumer behaviours. It’s about recognising loyalty as a broad and diverse spectrum, and having a foothold across all shades of the spectrum.
3. Differentiate between ‘loyalty’ and ‘reward schemes’
A busy young mum might save up her Tesco Clubcard points and take her kids to Legoland for the day; but that doesn’t mean she’s loyal to Tesco – she’s loyal to the Clubcard scheme, because it has delivered something of value to her personally.
It’s easy to fall into the trap of believing that loyalty schemes engender loyalty, but true loyalty isn’t in a short-term scheme but rather in everything you do as a brand.
However, loyalty schemes do have a clear role to play, and that role is fundamentally about recognition and rewards. Consumers need to feel they’ve got the best deals, that they’re ‘savvy shoppers’, and most of all, that they’re recognised and valued as a customer.
4. Create a dialogue with your customers
The brands that maintain true loyalty are those which are truly customer-centric, and they do this by engaging with their customers.
Lakeland is often cited as the most truly customer-centric brand; a brand that genuinely looks after – and interacts with – its consumers. Lakeland engages consumers through a lifestyle-focussed brochure, send out regular questionnaires and actually reference those results in their next communications – so it has developed a relationship with shoppers that isn’t just about transactional reward; it’s a dialogue over and above that.
5. Don’t assume disengaged customers have lapsed
The mistake most brands make is ignoring customers who have fallen to the bottom of their sales funnel because they haven’t opened an email four times in a row, rather than actually examining why they haven’t opened emails and what they’re doing wrong.
There are customers swimming around in this ‘virtual business gutter’ who aren’t attended to at all, and the frightening thing is that in most cases, these people form the actual majority of your database.
Don’t assume they’ve lapsed; ask them why.
6. Monitor your Net Promotor Score
It’s astounding how few companies do this, but really great brands will constantly analyse their promotors versus detractors and to what extent their customers would recommend their brand to colleagues; they watch their NPS (Net Promotor Score) flex and move all the time with market changes, and react accordingly.
7. Use your customers’ data wisely
When your customers give you their data, use it to communicate and build trust, rather than just perpetually selling to them; having big data serves no purpose at all unless you actually use it, no matter how sophisticated your data is.
But with the broad and diverse comms channels now available to us, we’ve forgotten all the things we learned through 25 years of direct mail, like how to talk to people and how often.
8. Make incentives relevant
How many times have we experienced giving a company our information, only to be spammed with offers or products that are totally irrelevant? Marketing is still done in segments and trends rather than by individuals, and that seems a tremendous waste of personal information. What’s the point in collecting information about your customer if you’re not going to leverage it?
That’s where personalisation becomes vital; treating the customer as an individual, recognising their unique behaviours, and ultimately making them feel happy with themselves, all comes back to a brand’s ability to understand – and appeal to – the human psyche.