Member Article

The importance of rewarding loyal customers in moments that really matter…

Earlier this year, market research from YouGov/Cebr Consumer Confidence Index showed that consumer confidence has dropped by a full point during January 2022, compared to the month before. With the cost of living on the rise, many consumers will be driven by price points and could start shopping around for the best deal rather than buying from their typical favourite brands. While it’s essential to accept that some customers will look to other brands in this current economic landscape, it will forever be true that the best customer is the one you already have.

One vital way of keeping these customers engaged is to reward their loyalty.

Why brand loyalty is so important

We’ve already touched on brand loyalty being a key method of retaining customers during this turbulent climate. But what is also so critical about brand loyalty is the impact it has on the way your customers talk about your brand.

With the internet offering unlimited choice for products, goods and services, customers are constantly looking for the best option to suit them. However, if they’ve heard from a trusted source that a brand is offering a similar product for a similar price with a much better customer experience, they may be swayed into buying from that brand instead. Rewarding existing customers is like making each of them your own PR team: they’ll publicise the incentives your company is offering, without you having to (although you definitely should be shouting about the benefits you offer). In fact, research from Super Office revealed that 86% of buyers are willing to pay more for a great customer experience, so it just goes to show that by offering customers a little something extra, you can secure loyalty from them.

When harnessed correctly, good brand loyalty also gives you an opportunity to improve your customer service. When customers are more engaged and loyal to your brand, they are more likely to leave constructive feedback. You can even address them directly by saying “as one of our loyal customers for ‘x’ number of years”, and offering them an incentive for leaving feedback, such as a discount. The customers who have been going to you for years are the best ones to provide honest feedback on the way you work. Investing in good customer service can really boost a brand’s profitability: The Temkin Group found that companies that earn $1 billion annually can expect to earn, on average, an additional $700 million within 3 years of investing in customer experience.

How do you achieve brand loyalty?

What takes customers from a casual buyer to a loyal fan? To find out, we can look at some of the best known loyalty programmes in the UK: ones launched by supermarkets.

• Get inspired by the best

Tesco revitalised its clubcard offering in 2021, and saw staggering benefits. Not only did users of the Clubcard App soar from 2.5 million (August 2020) to 6.6 million, but total like-for-like retail sales were £26.9bn, up 2.3% on a one-year basis and 8.4% on a two-year comparable basis. Tesco digitised their clubcard offering, provided everyday discounts to their customers, and made them personalised based on previous purchases. Combining all of this with the ease of having an app on your phone is what sets Tesco apart in this category. But it’s not just grocers that offer loyalty schemes. The pandemic has seen an explosion in virtual businesses as customer habits changed, so let’s take a look at short-term tactics and long-term brand building strategies that marketers can employ to connect with customers, improve brand health and ultimately drive growth.

• Short term pick-me-ups…

In the short term, offering discounts on birthdays, vouchers and little pick-me-ups ‘just because’ are a great way to keep customers loyal. But make sure to make this targeted, otherwise you run the risk of overloading them which could make them leave! For example, if you know a customer always buys a certain product, you can offer them 10% off if you know they haven’t bought it for a while. If you know when a customer’s birthday is, sending them a voucher always goes down well! Be mindful if your brand is one that sells occasional goods or services, e.g. cars or home insurance. It’s unlikely that customers will buy from you immediately after, which is where long-term solutions come into play.

• Long-term relationship building…

Long-term solutions can be implemented to ensure brand loyalty in the place of or in conjunction with short-term tactics. Businesses that deliver products and services to professionals are among the fastest growing industries globally. For these companies, loyalty is all about creating open lines of communication. A strong customer service team on the phone, 24-hour chat functions for issues, and creating an open forum for improvement are just some of the tactics that can be employed to ensure professionals remain loyal. Make sure your customers can get in touch with you as easily as possible, and don’t be afraid to go the extra mile to make things right if there’s been an issue.

This was posted in Bdaily's Members' News section by James Malia, UK MD of Prezzee .