Loyal customers are great. They not only spend more and more often than your other customers, but they’ll champion your brand while they do it. Customer loyalty, then, is arguably the silver bullet of success.

Despite this very few businesses understand how to cultivate and maintain a loyal customer base. There seems to be a misapprehension that loyalty will just happen on its own. Like osmosis. 

Sadly, this is not the case. In reality, most industries are becoming more competitive, with businesses investing more in lead generation technologies.

This has the knock-on effect that less time, thought and money is being spent on keeping the customers the business already has.

While growth is essential, retention and growing the spend of existing customers is as, if not more beneficial. Not least because existing customers are more profitable.

Increasing customer retention rates by 5% can increase profits by a minimum of 25%.

So there is clear value in customer loyalty yet few businesses see the value of investing in it.

The Problem with Customer Loyalty Programmes

The big problem businesses face is, customers hate feeling like businesses are trying to win their loyalty. Loyalty cards, loyalty rewards etc aren’t really about loyalty they’re about incremental spending and customers know that.

Customers aren’t stupid which is why they only ever engage with around half of the loyalty programmes they’ve signed up to. They are well aware of that they be

This is because loyalty to anything is based on trust. Business is transactional. So to gain any kind of genuine loyalty from your customers you have to earn it.

That’s not to say that your customers should get something for nothing, nor are they naive enough to expect that. Your customer understands there needs to be an exchange.

However, they want to feel like the exchange is fair. Or that they’re maybe making out slightly better than you are.

Of course some of that is down to how you present your customer loyalty programme. This isn’t to say you should mislead your customers. Aside from the legal issues it throws up, again they will see through.

Retailers have come under fire when announcing bonus rewards while quietly cutting the value of them. Customers notice and customers are unforgiving. Especially if there’s plenty of competition in that space.

Loyalty programmes also need to be more than discounts. If that’s all businesses offer they are telling their customers two things.

  1. Prices are inflated
  2. Only buy when there’s a sale or a discount

This severely impacts on the long term health of the business. It cuts into profits, impacts on sell through and budgets.

This can often lead to old stock piling up because customers aren’t buying all year round, rather waiting for it to be discounted. The result is stock being written off or sold at cost or below.

Valuing Loyal Customers

If you want engaged loyal customers you have to give them something to be loyal about. This means delivering on what they perceive as value.

The challenge is value is relative and varies not only from industry to industry but business to business.

Value to customers of a fast fashion website will be very different to a hobby store. The audiences are different, as are the demands and expectations.

Firstly in the case of fast fashion, price is a major consideration, which means discounts will work to a certain extent. In the case of a hobby store, customers care a lot less about price because they are invested in their personal pursuit.

In the latter example higher value would be attached to tutorials or guides that teach the customer methods or techniques. Similarly, exclusive items that are either premium or offer status within the hobby community would be coveted more than discounts.

However, just as different hobbies have their communities, so does fashion and value can be delivered in a similar way.

Exclusive content about up and trends or invitations to fashion shows and sneak peaks all help to drive engagement. And create loyal customers. 

However you choose to reward customer loyalty within your business, it has to come from a place of value. And also positivity.

Ultimately you need to actually like your customers. Not just for spending money with you but because they chose to come back and engage with you. 

Customers who share your content and extend your reach can be as valuable as your big spenders.

It’s easy to lose sight of the human component to customers when thousands of people hit your site. The concept becomes abstracted but retaining the human element is a key differentiator few of your competitors will be leveraging.

Loyal Customers and Customer Data

The good news is you’ve got a lot of first party customer data at your disposal. Everything from demographics to purchase history.

For a business looking to create a value orientated loyalty programme this is a proverbial treasure trove.

This data allows you to create highly detailed customer profiles that give actionable insights. That is to say you can create a personalised experience based on their customer profile.

Lots of companies send birthday emails offering customers 10% when they spend more than the average basket value. Customers may use it but they don’t feel good about it.

Consolidating your data in the right way allows you to create a birthday message that has meaning. You can also personalise the offer, or free gift based on their product preferences.

Although you may be offering the same percentage discount, money off something the customer might specifically want means a lot more.

It says ‘treat yourself’ rather than ‘spend money with us’.

It’s the same offer packaged in a customer-centric way. Your customers will still spend the money, except they’ll feel good about it, because they felt acknowledged and understood.

Using your customer data in this way delivers on a value proposition while still driving sales. 

As a result you can deliver a loyalty programme that is focussed on earning loyalty rather than pressuring customers to spend. While this may make some uneasy, loyal customers spend, on average, 67% more than new customers. They also tend to spend more frequently.

Increasing the average spend from $100 to $167 for every repeat customer is nothing to be sniffed at. Especially if their order frequency increases too.

Even if you give every customer a $50 gift voucher for their birthday and during the holiday season, the uplift on each order more than covers the cost.

Communicating with your Loyal Customers

Using a customer data platform to create a Single Customer View for each of your customers gives you the foundation upon which all your engagement activity is built. 

Aside from giving you the data needed to create relevant and engaging offers it gives you the means to communicate with your loyal customers.

After all, what good are highly personalised offers if you can’t communicate them?

In the same way you use the Single Customer View to understand your customers, you can use it to make those communications unique to them.

You already know what products your customers like so your nurture campaigns should reflect that.

No matter how high your open rates are, chances are the vast majority of your customers don’t open your emails. Because they don’t see the value in doing so.

Equally, the chances are they didn’t always feel this way but they’ve become jaded by the same generic messaging and the same scattergun product offering when you go into sale.

Using your customer to create personalised emails with relevant products and offers can turn those engagement numbers on their head.

And for those who still don’t open your emails? They can drop into a churn campaign where they receive an aggressive offer to win them back.

Or if they’re still spending but not engaging with your emails, your push notifications or live chat to engage with them directly on your website. 

Offer them an incentive to start opening your emails again. If your email tool is plugged into or part of your CDP you’ll know whether or not they’ve responded.

Building detailed customer profiles takes time but is an essential component to nurturing your loyal customers.

Start the Process

Your customers are eager to hear from you. All the research points to a high demand for personalised engagements, especially within spaces like eCommerce. 

Low prices and free shipping isn’t enough any more. Not least because every business does it. To win market share and keep your loyal customers, you need to engage with them on a personal level. 

Every touch point needs to feel like a message from a friend, not faceless business. The deeper the connection, the deeper the sense of loyalty. And the happier your loyal customers will be to spend with you.

To learn more about a customer data platform that can help you engage with your customers and build customer loyalty, get in touch today to book a demo.

Click to download our guide to increasing eCommerce conversions and retention.

About Xtremepush

Xtremepush is the world’s leading customer data and engagement data platform. We work with various top brands within the Sports Betting & Gaming industry. Schedule a personalised demo of our platform to learn more about how we can help your brand drive repeat players and increase revenue.