What is customer loyalty? It refers to the ongoing relationship between a business and each individual customer. It is realised in the willingness of a customer to come back and engage with a brand, and choose to purchase from them again rather than opt for a competitor. Customer loyalty comes about as a byproduct of that customer’s positive experiences with a business, helping to create trust.

A loyal customer:

  • Comes back and makes repeat purchases
  • Uses and enjoys the things they purchase
  • Interacts with a brand through various channels
  • Endorses the brand, encouraging family and friends to buy from them and providing positive feedback at every opportunity

Is there only one type of loyal customer?

Loyalty among customers comes about for various reasons. Generally speaking, there are 6 types of loyal customer:

1. The happy customer

These people like your products/services, never have a complaint and regularly return to buy from you. They can, however, be tempted by competitors if a better deal or discount is offered.

2. Price-based loyalty

These people come to you for your low prices. They will go elsewhere if someone improves on your prices but will come back if you lower your prices again.

3. Loyalty-program loyalty

These are customers whose loyalty is based on your loyalty program as they feel it offers them the best value for money.

4. Convenience-based loyalty

These people find it easy to find your brand, and like the ways they can communicate with and purchase from you. Price is not their main draw – they stay with you for the convenience.

5. Freebie-based loyalty

These customers are drawn to the free things you offer. For example, you may provide free WiFi in-store or free samples of certain things. These types of loyal customers will come back sporadically but are not a major contributor to your revenue.

6. True loyalty

These customers are your biggest advocates. They come back to your brand repeatedly, tell others about how great you are and refer their friends and family to you.

How does customer retention fit in?

What is customer loyalty if not an ongoing practice of customer retention? Loyalty is a predisposition in the mind of a customer to engage with your company and buy your products/services. Retention is a metric that falls within that, tracking customer engagement and the sales that result.

You put in a lot of work to acquire new customers, and the next challenge is to earn their loyalty. You do this by providing positive experiences and offering maximum value for money. Brands create customer retention strategies to both provide and extract value from the existing customer base.

The role of customer service

The experience a customer has with a brand dictates their spending, engagement and interaction with it. One of the key interactions is with customer service, and this can happen in person, over the phone, via live chat or through email.

Customers will get a sense of how well customer service treats them and addresses their issues, enquiries and feedback, and this has an impact on how loyal they are likely to be. If their experience is positive and they feel satisfied afterwards, they are more likely to come back, but an unsatisfactory experience with customer service could discourage them from interacting with your brand in future.

How can a customer loyalty platform help?

Customer experience (CX) is one of the key areas where forward-thinking brands compete. With the help of a customer loyalty platform, businesses can provide a differentiated customer experience that is scalable and consistent. In order to deliver the best customer experience, you need to know your customers, and this depends on data. With this data, you can provide greater incentives for customers to become loyal to your brand.

Perx offers a scalable customer loyalty program for a range of different industries, accommodating audiences from 1,000 to over 1,000,000. Our white-label loyalty solution is ‘plug-and-play’ and can be tailored to each client. It delivers a simple way to incentivise customers and stakeholders to increase loyalty through improved customer engagement and retention. Learn more about the benefits here.

How does customer retention aid company growth?

Loyalty is the holy grail because, for most industries, it is very expensive to acquire new customers. Most businesses need customers to remain loyal to them for a substantial period of time to break even on the cost it took to acquire them.

Those newly acquired customers, if you can retain them and develop them into repeat customers, can improve profits. They will tend to buy more from you as the relationship grows and develops, and as their loyalty increases, they are more likely to refer other customers to you. This helps with customer acquisition without investment in marketing, making customer retention schemes and loyal customers a valuable part of the growth of your business.

What is customer loyalty program development?

Loyalty programs are designed to encourage customers to engage with and purchase from a specific brand. It works via customer recognition, rewarding customers for spending money with your brand or interacting in other ways. They come in various forms, such as collecting points, taking specific actions or spending money in certain ways. The basic principle is simple: if you engage with our brand, you will get something in return.

The incentives include things like:

  • Vouchers/discount codes
  • Exclusive products/services
  • Exclusive access to lower prices
  • Free deliveries
  • Free merchandise

Customer loyalty programs make up part of a customer retention strategy. They serve the dual purpose of acquiring and retaining customers and collecting customer data to help you understand your customer base better and present your brand in a way that works for them.

Choose a loyalty program designed to work for you

Perx can offer a bespoke loyalty program that works in the way you need it to. Our platform has a range of powerful features that will help you improve customer retention and earn the best form of loyal customers – the ones that bring more business your way.

If you want to learn more about how we can help you grow through improved customer loyalty, get in touch or book a demo and we will show you how it works.

Image by Tumisu via Pixabay