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How To Increase Customer Loyalty in 2024. Ideas & examples from loyalty experts

How To Increase Customer Loyalty in 2024. Ideas & examples from loyalty experts

Want to know how to improve customer loyalty in your company? In a world where marketers seem to launch a new retention-boosting initiative daily, how can your brand stand out? We’ve interviewed leading loyalty practitioners working at big name brands, to discover how they stay ahead of the curve to continually drive improvements in customer retention. 

In our guide below, you’ll discover what’s new and trending in customer loyalty, and how to meet the changing demands for today’s buyer.

 In this article:

10 ways to improve customer loyalty in 2024

Recently we were joined by Michele Fitzpatrick from Marigold. Michele gave a masterclass in tools, tips and techniques that loyalty marketers can utilize in 2024, and 10 ways loyalty can be improved…

 

1. Prioritize customer experience across all touchpoints

“My plea to loyalty marketers everywhere, is that it’s time to evolve from thinking about it as a customer experience and really evolve to thinking about it as a human experience.

When you do that it will cause you to take a look at things like ‘what are our messages’ and ‘what are our offers’ and ‘what’s our value proposition’ and ‘how do we support the human being at the other end of this conversation?’

Digital and e-commerce has been on the rise for the last 10 years. But it’s plateaued, and 75 to 80 percent of consumer purchases across all categories of goods still happens in a physical environment. So when you’re thinking about your loyalty program, you’re thinking about digital interactions, but don’t forget about the opportunities to create physical interactions.”

 
Prioritize customer experience
Leverage Customer Data for Personalization

2. Leverage data for personalization and contextual relevance

Gathering customer data on their profile, touchpoints with your brands, as well as interactions with loyalty mechanics not only provides a wealth of insight, it also enables personalized recommendations and communications.

This elevates the relevance of offers you promote to customers. Providing contextually relevant experiences will significantly improve the likelihood of a sales uplift (and satisfied customer).

 

3. Implement a robust loyalty program to incentivize repeat purchases and boost engagement

The best loyalty programs create a point of difference from the competition. They deliver mutually rewarding outcomes for your customer and your brand, encouraging behaviour change at incremental steps.

Stats showing the impact of a customer loyalty program

Source: https://info.bondbrandloyalty.com/loyalty-report-2018

Implement a Robust Customer Loyalty Program

Ensure that your program is easy to understand, simple to use, and offers a highly appealing value exchange. These programs should be iterative and emergent. So be sure to develop architecture that can flex as needed, and don’t fall in love with your first design – the road to brand advocacy will twist and turn!

Foster community and connection with customers

4. Create a sense of community around your brand to foster deeper connections with customers

Emotional loyalty is hard to come by. By fostering a community around your brand, you’ll engage in a 2-way dialogue that encourages social sharing and a sense of ownership among customers of loyalty co-creation.

So take the time to identify where a human touch can be injected in a process and go out of your way to focus on the ‘softer’ side of loyalty.

 

5. Offer omnichannel support to ensure customers can effortlessly interact with your brand

The buyer journey is self-directed. So remove all friction and make it effortless for people to get what they want from you, via the channel they feel most comfortable.

Offer omnichannel support
Demonstrate a commitment to sustainability and CSR

6. Demonstrate a commitment to sustainability and CSR

Sustainability and corporate social responsibility present a wonderful opportunity for companies to make an immediate positive impact on their customers’ brand perceptions. As consumers grow increasingly concerned with these global issues, demonstrating commitment to CSR give brands the chance to build stronger emotional bonds, based on shared values.

7. Use tech - like AI, chatbots and AR/VR - to enhance customer engagement

As tech gets smarter, so can the applications of that technology – such as AI and chatbots – in managing customer relationships. This will allow companies to scale, but also increase the number and quality of customer touchpoints with a brand.

Use tech to enhance customer engagement
Personalize customer communications

8. Personalize your communications to reflect individual customer preferences and behaviors

Different people want different things from brands. So when you utilize the data already at your fingertips to make communications personal, you make it matter.

Stats showing customer preferences for personalization

9. Collect and act upon customer feedback

Engage in a 2-way dialogue with customers so they feel they have a voice in building products and services that appeal to them as individuals. Be sure to communicate what has been actioned following feedback given, especially if it is negative.

Collect and act upon customer feedback
Reward loyal customers

10. Show your loyal customers some love with exclusive rewards, recognition and VIP treatment

Go beyond generic offers. To build a loyal relationship and true engagement, customers must feel special. Brands that focus on rewards that leave lasting memories, will be remembered fondly themselves.

How customer loyalty is changing

The loyalty landscape is ever-evolving. Shifting consumer preferences constantly set new benchmarks for what ‘great’ looks like.

So, to keep abreast of what your customers want (and expect) from your loyalty efforts, leading suppliers to the sector conduct regular research.

Take these excellent sources of insight, for example…

Loyalty shifts across Europe

This whitepaper from Mando and YouGov, takes a look at the impact of loyalty across 24 European markets, with a deep dive into 10 European markets, commentary from in-market experts and 3 world class case-studies.

Listen to the podcast episode here >>

Understanding loyalty Europe 2.0 whitepaper
The bond loyalty report

The Bond Brand Loyalty Report 2024

The Bond Brand Loyalty Report unpacks stand out trends in loyalty for 2024. 

It covers loyalty’s growing impact on advocacy, retention, and spend, the power of human connection in an increasingly AI-driven world, the value of personalization and how the influx of loyalty program partnerships have shaped member expectations

Download the Executive Summary here >>

 

Loyalty Down Under

The Australian retail loyalty insights report explores the pivotal roles that brand, product, and loyalty programs play in cultivating consumer loyalty and fostering lasting relationships within the Australian market.

Watch the episode here >>

2024 Loyalty down under report
What the Brits want from loyalty programs whitepaper

What the Brits want from loyalty

Another whitepaper from Mando and YouGov, delves into the UK market specifically.

Listen to the podcast episode here >>

 

Top insights from South Africa

This loyalty research study, sheds light on key insights, intriguing statistics, and emerging trends within the loyalty landscape in South Africa.

Listen to the podcast episode here >>

 
Top loyalty insights from South Africa

So, why is customer loyalty critically important?

While bringing in new customers is important, the real magic happens when we turn one-time buyers into lifelong friends.

Here are ten unignorable reasons to zero in on improving customer loyalty…

1. Repeat Business: The Gift That Keeps on Giving

Imagine your favorite coffee shop – let’s say Starbucks. They have a rewards program that keeps you coming back for your daily dose of caffeine. Loyal customers are like this: they return time and again, boosting your revenue steadily.

We ‘ve spoken about the Starbucks programs a couple of times on the show…

Bain & Company estimate that increasing customer retention by just 2% can have the same impact as cutting costs by 10%. And that improving customer retention by 5% can increase profits by up to 95%.

So, like a trusty old high school friend, they are always there when you need them.

2. Cost-Effective: A Penny Saved Is a Penny Earned

Think of acquiring new customers as planting a garden. It takes time, effort, and resources to grow new plants. Retaining existing customers, however, is like tending to an already flourishing garden – it’s much easier and more rewarding.

Amazon Prime is a perfect example: members shop more frequently and spend more, reducing the need for constant new customer acquisition.

It’s estimated that new customers cost five times more to convert than existing ones.

So, focus on nurturing the relationships you already have.

3. Brand Advocacy: Your Cheerleaders in the Stands

Loyal customers are your biggest fans, cheering you on from the stands. They spread the good word about your brand to friends and family, just like how people rave about the latest iPhone.

According to Referral Sasquatch, the lifetime value for new referral customers is 16% higher than for non-referrals. Additionally, 86% of consumers recommend brands to which they are loyal to other people.

Making your loyal customers your most effective marketing campaign, ever!

4. Customer Feedback: The Honest Friend

Loyal customers are like that honest friend who gives you the (sometimes brutal) feedback you need to hear.

They care about your success and aren’t afraid to share their thoughts.

This valuable input can drive your business forward and keep you ahead of the competition.

5. Market Stability: Your Business Anchor

Acting as the anchor that keeps your ship steady in rough seas, loyal customers provide a predictable revenue stream that helps you navigate through economic downturns and market fluctuations.

Take Costco, where members pay an annual fee and regularly shop for bulk items, providing a steady and predictable revenue flow.

Customers who are subscribed to a loyalty program have a 37% higher purchase frequency than those who aren’t, helping to even out seasonal ups and downs.

Plus, around 3 in 5 consumers spend more on a brand after signing up for a paid loyalty program (McKinsey).

Loyalty program consumers spend more statistic

6. Competitive Edge: Your Secret Weapon

In a world full of choices, customer loyalty is your secret weapon.

When customers feel a strong emotional connection to your brand, like fans of Finnair, they’re less likely to be tempted by competitors.

Loyal customers are also less price-sensitive, allowing you to focus on offering personalized experiences and exclusive rewards rather than getting caught in a price war.

7. Increased Spending: The Loyal Shopper

Loyal customers can’t resist filling their cart with your best products. They tend to spend more over time and are more open to upselling and cross-selling opportunities.

McKinsey found that repeat e-commerce customers spend more than double what new customers spend. Constellation Research found that companies improving engagement can boost cross-sell revenue by 22% and upsell revenue by 13% to 51%.

They trust your brand and are therefore willing to explore your premium offerings.

Statistics from The Loyal Shopper

8. Improved Customer Experience: The Disney Magic

Companies that focus on customer loyalty often invest in creating magical experiences.

Disney is a shining example – they continually enhance their parks and services to provide an unforgettable experience, ensuring guests return and share their positive stories.

A loyal customer base enhances your brand’s reputation and helps address issues before they become serious problems, creating a win-win situation for everyone.

9. Positive Company Culture: The Happy Team

A strong base of loyal customers can boost employee morale and foster a positive company culture.

When employees see happy, satisfied customers, they feel more motivated and engaged. Trader Joe’s is known for its cheerful employees, partly because of the strong customer loyalty the brand enjoys.

Positive reviews and testimonials from loyal customers can elevate the brand’s status, making it more attractive to potential customers and partners.

10. Long-Term Success: Building a Legacy

Ultimately, customer loyalty is the cornerstone of long-term business success.
Think of Amazon, which leveraged its loyal customer base when expanding from books to a vast array of products and services.

Customer disloyalty can stunt growth by 25%-50%, highlighting the importance of investing in loyalty to ensure continued success. Building a legacy of loyal customers helps your business thrive and grow in the long run.

So great customer loyalty is not just a nice-to-have; it’s the bedrock of a thriving business.

By building unshakeable bonds with loyal customers, you’ll enjoy a steady revenue stream, cost savings, brand advocacy and long-term success. Investing in customer loyalty is like tending to your garden – the better you maintain it, the more it will flourish.

More top tips to help you build a better loyalty program

So by now you’ve probably bought into the premise that loyalty breeds success. And one way to create a breeding ground for brand advocates is to launch a loyalty program. But with so many to choose from, which route would hold the most appeal for your customers?

Top loyalty leaders in the field provide us with hints and tips every week. And here are a few highlights on loyalty program design…

Keep it simple

“Keeping it simple is so important. You don’t want to make it boring, but at the same time, you need to make sure that someone doesn’t need to brush up on their algebra to be able to figure out what they’re going to receive as a part of that loyalty program and experience.

As part of keeping it simple, I think the most important thing is to remember, you can’t set it and forget it.

Customers want flexibility. They want convenience. They want to feel like you understand them.”

Jill Moser, SVP, Global Loyalty, Offers at Mastercard.

Play Video

Be precise with your personalization

“If you are a customer and personalization is not well done, you directly feel it.

So, if you do personalization, you need to be really precise and 100 percent sure about what you do. Because if I bought a coffee table and after you send me an offe for some chairs, but I already have the chairs, your offer doesn’t work for me.

This is missed personalization. It doesn’t work and I don’t like it. So you need to have it really precise and well done to be efficient.”

Jessica Lavigne, CRM and Customer Loyalty Professional at Comarch.

Play Video about be precise

Experiment rapidly and make data-driven decisions

“The only way you can ever truly understand what’s working is to work out what’s the fastest part to the whole of how we can stand up rapid experimentation to learn.

Irrespective of what your view or my view or CFO or the CEOs view is, you still may choose to ignore the data, but you’ve got data that’s been driven by experiments. Experiments have been prioritized based on potential value and then your ability to execute those experiments.

For me, that’s the game because you can have all the theory, and you can have the experience, but if you’re not able to test all these things and retest them, then I don’t know how it can succeed.”

Aaron Fuller⁠, General Manager of Member Engagement at the Super Retail Group.

Play Video about Experiment rapidly and make data-driven decisions

Embrace emotional and experiential loyalty

“We had a Veuve Clicquot experience where we invited loyalty members to taste some of the Veuve Clicquot expressions, and they absolutely loved it (and there were purchases made afterwards).

It’s a super-exciting way to provide them with a reward that they wouldn’t be able to get. You can buy our product in many other retailers, but what those retailers don’t have is the Moet Hennessy landscape of access and experiences.”

⁠Erin Scarfe⁠, Head of Consumer Engagement for Moët Hennessy.

Embrace emotional and experiential loyalty

Make rewards attainable

In this episode of the “Wiser Loyalty” podcast episode, senior faculty members of the Loyalty Academy™, Bill Hanifin and Aaron Dauphinee explore the importance of attainable rewards, both from the strategy and redemption experience perspective.

The two offer a set of real world examples to help reinforce some of the successes and poorer decisions select brands have made when it comes to rewarding the program members.

Make customer loyalty rewards attainable

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