Customer Loyalty Is Your Holy Grail for Success. Here's How to Cultivate It. Customer loyalty is an essential source of revenue for any business. Use these four tips to create a customer loyalty program that will give you the highest return on your investment.
By Matt Bertram Edited by Russell Sicklick
Our biggest sale — Get unlimited access to Entrepreneur.com at an unbeatable price. Use code SAVE50 at checkout.*
Claim Offer*Offer only available to new subscribers
Opinions expressed by Entrepreneur contributors are their own.
Customer loyalty is the holy grail of a high return on your investment. However, many people tend to think and invest more in customer acquisition and marketing than they do in cultivating loyalty. The evidence is clear; customer loyalty translates to steady revenue, lower marketing costs and more effective word-of-mouth advertising.
Implementing many customer loyalty programs offers a marketing advantage that can improve customer acquisition. Customer loyalty and engagement can be the tiny edge that propels you over the competition, even in the face of an inferior product or service.
To successfully implement an efficient customer loyalty program, I've outlined four important considerations.
Related: A Checklist to Get Your Customer-Loyalty Program Off the Ground
Understand what motivates your customers
Incentives are a powerful force that motivates individual economic decision-making. Tapping into the personal motivations of customers and why they purchase your products is essential in understanding how to reward them and encourage them to take that action again.
Depending on the nature of your business, there may be several underlying incentivizes driving customers to your brand, including:
- Financial incentives: Your brand offers the best financial advantage.
- Psychological incentivizes: Your products offer joy important to your customers' happiness.
- Exclusivity incentives: Your products offer a level of exclusivity that makes customers feel unique, special or elite.
In some ways, understanding what motivates people to your brand is knowing what your brand offers that your competitors don't.
However, to understand more about customers and their thinking, consider the following strategies:
- Invest in a CRM program to collect more granular data
- Use social listening tools to understand how your brand is perceived by customers online
- Dig into keyword research to see which terms people use to look for products, such as discounted or best
- Use market research for low-level demographic data
- Undergo competitor research to see how competitors in your field cultivate customer loyalty
- Solicit customer feedback for direct insights
Make rewards truly unique
Once you understand what motivates your customers, you can create a loyalty program that rewards them. For example, customers motivated by financial incentives will benefit from BOGO deals and discounts, while customers motivated by exclusivity will be motivated by exclusive branded gifts and merchandise.
One tip to really keep in mind is to make rewards unique and exceptional. Don't just settle on branded stickers and pens; go the extra mile with branded tote bags, t-shirts, hats and anything else that people will see in public. I particularly love branded merchandise because it provides ancillary marketing benefits that can be more impactful than traditional advertising.
I would also suggest going above and beyond regarding financial rewards, whether it's giving away free monthly trials or purchases. You can even work with other companies like Amazon or retailers to help transfer rewards points or incentives for a discount on purchases they already make.
Once you have a set of rewards, you can even tier your program to encourage additional engagement. Ideally, the greater the engagement by the customer, the higher the reward. Those customers that reach the top tier will feel special as you give them the best financial rewards.
Related: How Brands Can Turn Rewards Programs Into Long-Term Loyalty
Create consistent customer experiences
Customer satisfaction is when expectations meet reality. A core component of your customer loyalty program must focus on creating positive and consistent customer interaction via your products, marketing and customer service. Ensure all brick-and-mortar locations and online assets follow a consistent branding pattern and a set of branding guidelines.
To create a consistent digital experience, you need to invest in multi-channel customer service. This strategy could include utilizing chatbots on your website, responding to users over social media and email or even implementing a digital HR help desk for people to communicate with customer representatives directly.
I also recommend creating a consistent experience across your sales funnel to build a positive first impression of your brand through the following strategies:
- Offering promotions or discounts for first-time purchases
- Delivering thank you emails and/or texts at purchase
- Emailing follow-up for surveys and additional thanks
- Offering online and telephone support for any questions
- Providing additional online resources for tutorials, guidance or sending feedback directly
Finally, create above-and-beyond customer service by offering omnichannel support and investing in AI that allows for personalized and automated responses.
Great customer service also starts with hiring the right staff and implementing the right procedures. Train staff to practice active listening and empathy to achieve better customer interactions and offer solutions that resolve customer problems meaningfully.
In fact, bad customer experiences offer brands the opportunity to fix their mistakes, which often leads to higher positivity than if the customer just had a fairly normal experience.
Related: 15 Tips for Improving Customer Loyalty
Go above traditional interactions to create a community
Today's younger generations are often motivated to shop with brands that conform to their social values.
A survey from Sprout Social found that 70% of customers felt it was necessary for brands to take a stand on social and political issues. The key here is to use your community values and inclusivity as an asset to cultivate greater loyalty.
For example, there are several strategies for cultivating greater community loyalty among your customers, including:
- Incorporating political/social messaging in your advertising
- Donating to a charity
- Hosting fundraisers for important causes
- Hosting brand-exclusive events and parties that reward loyalty
- Encouraging users to submit UGC for promotions
Sometimes your products and actions can also speak for themselves. For example, my digital marketing company became the first to purchase NFL tickets with Bitcoin, helping to build strong relationships with sports fans and tech enthusiasts among our customer base.
In many ways, inspiring brand loyalty involves following many of the best practices I recommend for any new business.
Once you understand what motivates your customers and put the proper infrastructure in place, cultivating brand loyalty is all about executing your promises and being there when they need you most.
