5 ways to build customer loyalty
5 ways to build customer loyalty
If you are a business owner operating in retail and/or e-tail space, chances are you will have come across umpteen articles on building customer loyalty, or worse, have listened to every growth hacker talk about the dos and don’ts of retaining customers.
And while these play their own significant parts, they tend to use the terms ‘frequent customers’ and ‘loyal customers’ interchangeably.
But frequent customers need not be loyal customers.
In fact, the frequency of purchases is not a reliable metric. Barring occasion-led purchases, shopping remains -- to a large extent -- a utilitarian activity, i.e. to meet one’s perishable needs. And customers do not want to rack their brains over these.
The frequency can be attributed to two triggers.
- Proximity, of a physical store to a customer.
- Convenience, of an e-commerce site to a user.
It is safe to say that frequent customers are habituated to buy from a specific shop or a site. And in most cases, habituated shopping experiences turn out to be nothing more than unconscious buying decisions. We call this as transactional loyalty to the brand. The aim is to elevate this into an emotional loyalty with the brand.
So, go beyond your brand to make your customers feel special. If this means a according preferential service to them, do it. Let their perceived value, of/from the brand, be bigger than the actual one. And don’t forget to re-affirm this belief of theirs at every possible opportunity and at every touch point .
For only loyal customers will evangelize your brand to their social circle. This is not to say that you should appraise your existing customers with a critical eye. It is the other way around. It has been estimated that they spend 67% more than newer ones.
Do you know? It costs brands at least 5X (and in some cases, this can shoot up to 25X) more to acquire new customers
5 ways to convert frequent customers into loyal customers
Hint: And please don’t make a rocket science out of the rewarding logic. Keep it simple. The easier it is for customers to correlate reward points with purchases, the faster they will buy into the entire process.
The Qwik Advantage: Qwikcilver’s loyalty engine has capabilities to offer real-time points calculation, based on predefined business criteria. It also allows customers to enroll into a loyalty program, accrue points, burn them, enquire balances, etc. This apart from business-success features such as
- Configurable settings for earning rewards
- Flexible redemption rules
- Velocity checks and exception reporting for better control
- Ongoing program support, and so on.
4. Find ways to gamify your loyalty program. Buy, earn points. Buy more, earn more points. If implemented well, points-based loyalty programs help brands to acquire and retain customers , convert them into ‘loyal force’ and insure the brands’ future.
Hint: Ever heard of a loyalty ladder? Implement a tiered-points system. Write your own business rules. Provide incentives for customers to enroll in the loyalty program. But keep the logic for calculating points pro-rata. The more frequent customers shop, the faster they will accumulate points.
The Qwik Advantage: Qwikcilver’s loyalty engine supports real-time multi-tier program management. It allows customers to know the points they have earned, while business owners can get granular reports on
- Reward points earn-burn details of members enrolled in a loyalty program
- The members who have migrated to higher bases within a certain time period
- Store-wise, region-wise, etc. enrolment insights on merchant loyalty programs
- Liability reports to track the balance points of all the members
- Customer frequency report, among others.
5. Lastly, bring novelty into loyalty!
Loyalty is a commitment and it must be kept from both ends. Your loyal customers go into the market as your brand champions. The best way to keep them glued to your brand is by providing them with exclusive offers; offers that will not be available for other customers.
One way to achieve this is to tie-up with brands of complementing categories and provide exclusive offers for your loyal customers, in the form of gift cards.
For e.g. MakeMyTrip (MMT) has partnered with Taj Hotels to provide customers a Taj Hotels gift card if they book Taj properties via MMT.
It always boils down to this. To acquire & retain customers, you must put a consistent face, address their concerns then and there, reward & thus reinforce favourable customer behaviour, gamify your loyalty program to make it interesting and, finally, treat your loyal force as kings.
When done consistently, the aforementioned 5 ways will bring your brand into the ‘focus-zone’ of customers, especially when they shop.