Customer loyalty: Why loyal customers are indispensable

15. March 2022

6 Minutes

What is loyalty for you? Just the 12th card in your wallet?

Loyalty programmes are about much more than a simple bonus card for retailers. It is about building a consistently positive emotional connection between customer and brand.

Today more than ever, customers have the choice of which retailer they buy from.

There are service offerings that customers already take for granted today, such as friendly customer service, secured and punctual delivery or a favourable offer. How can customers really be tied to a brand?

However, customers who have once been tied to a brand remain and are therefore particularly valuable for a company. This is because loyal customers always return to a company with which they associate positive experiences and, or even become brand ambassadors and recommend products and brands to acquaintances and friends. In this way, not only new customers can be generated, but also costs for new customer acquisition can be reduced.

Trust

Building a consistently positive emotional bond between customer and brand

Appreciation

Loyal customers can become brand ambassadors and recommend products and brands to friends and acquaintances

Connectedness

Customers have the choice of which company they buy from: If customers have committed to the brand, they are particularly valuable to the company.

The key points of the blog

Score points with end customers

In order to retain customers in the long term, numerous measures are necessary. Companies must offer their customers the right incentives and create appropriate added value. This can be done, for example, through a comprehensive loyalty system, an app for collecting and redeeming points or other bonus campaigns.

Those who know their customers and their preferences inside out are in a position to generate offers and bonus content tailored to them, to inspire them and address them with the right advertising measures, and to significantly improve the customer experience.

Loyalty is more

Loyalty is more than just giving away free points. Successful entrepreneurs are aware that it is not only the customer who benefits from bonus points and an extensive loyalty programme. Equally, companies gain a comprehensive insight into various customer data, such as buying behaviour and customer preferences.

At the same time, they receive information about who buys their products, where these customers are located and which measures have the highest sales potential. In this way, marketing activities and campaigns can be improved and customer lifetime value maximised.

Create personal incentives and steer customers individually

However, most loyalty programmes are very generic and passionless: customers can collect and redeem points, or occasionally benefit from special promotions. This one-dimensional approach is insufficient in today’s world. If you really want to inspire your customers, you have to become more creative: By addressing them individually and through personalised loyalty programmes, real incentives can be set and customers can be controlled in a targeted manner. Did your customer buy a product particularly frequently last year? Provide offers and bonus points individually tailored to purchase behaviour and show that you really know and value your customer.

By identifying interests and preferences, selected products can be recommended, content can be adapted and customers can be addressed individually. With suitable measures, customers can also be lured specifically to own brands or alternative brands, for example.

Is a customer loyalty programme worth it? This is how loyalty points pay off.

It has long been known that loyalty pays off: According to studies, the costs of acquiring new customers are around five times higher than those of retaining existing customers.

Cost saving

Profit increase

Customer focus for more turnover

Why is that?

New customers have to be attracted at the beginning with great effort. Brand awareness and a comprehensive marketing strategy are essential to persuade customers to buy along the customer journey. These are often associated with high costs. In return, returning customers generate real revenue:

Retailers, for example, generate around 80% of their turnover with an average of 20% of their customers. As a rule, loyal customers buy more often and usually have higher-value shopping baskets. At the same time, they are more willing to pay higher prices and are less sensitive to price increases.

With the right incentives, you can get customers to refer more customers, write product reviews or rate your business.

Interplay between loyalty programme and marketing activities

Furthermore, loyalty and marketing are directly interrelated. For example, loyalty programmes provide additional data to marketing, enabling them to create personalised experiences and target customers.

With the right incentives, you can get customers to refer more customers, write product reviews or rate your company.

And: it is important to inspire customers and continuously create incentives in order to create a sustainable loyalty programme. For this reason, loyalty programmes and marketing activities should go hand in hand and be coordinated.

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