Context of consumer loyalty

Customer loyalty is arguably the most important factor in business today. Not only will it bring repeat business, but also translate to more opportunities via word of mouth as well as brand mulligans for those little hiccups that occur every now and again. Here is a tip that I’ve found come in handy when it comes to increasing this important marketing metric.

Establish a personal relationship with each individual customer. A significant aspect of customer loyalty comes down to your likeability. People will almost always remain committed to a brand if they believe they’ve developed a genuine and mutually beneficial relationship. Take advantage of any opportunity to get to know a client on a personal level. To be more exact, designate a specific team of representatives to each individual client. In doing so, you will put yourself in a situation to develop good rapport with every customer and, more importantly, give you critical information to use during follow-up opportunities.

Customer loyalty

Customer loyalty schemes are an effective way to improve your customer-retention levels. The high cost of bringing in new business compared to retaining existing clients is undisputed so increasing your customer retention can significantly boost bottom-line profits. And yet many firms are missing a trick when it comes to building customer loyalty.

In a competitive marketplace where customers find it easy to switch supplier, loyalty schemes are an effective way to increase customer retention and improve your profitability. If you want to build a loyal clientele, keeping the customer satisfied isn't always enough. The fact that your customers are satisfied doesn't stop them from taking their business to a competitor who offers them something extra.

To increase loyalty, you need to recognise and reward your best customers. A loyalty scheme can be used to incentivise and delight your most valued customers. That in turn can do wonders for your profitability.

The advantages of loyalty schemes

Loyalty initiatives allow you to focus on your best customers and improve customer satisfaction levels. Loyal customers buy more and are often willing to pay more, which boosts your cashflow. By increasing loyalty, you can increase profitability and extend the time they place their business with you.

Loyal customers are also good for your business because they become your best advocates. They recommend you to others, saving you marketing costs. A loyal customer's endorsement is more powerful to their friends and family than any advertising campaign.

Devising the right loyalty scheme

Customers like loyalty schemes because they feel they are getting rewarded for giving you their business. So your scheme needs to offer customers something they will appreciate. However, it should also be devised with profit in mind.

Remember that you're trying to reward customers for behaving in the way that you want. Focus on specific goals. For instance, are you looking for repeat business or do you want your customers to spend more?

The rewards you offer to regular customers can vary from fixed discounts to extra goods or prizes. A hairdresser, for example, could offer a simple card scheme whereby customers get a free treatment for every ten visits. A mail order firm may offer a discount for bulk orders.

Above all, the scheme should be simple to use and the rewards should be attractive and attainable. If customers have to spend a lot to get a small gift, they will be insulted. At the same time, make sure you can recover the cost reasonably quickly.

Getting to know your customers

The data generated by a loyalty scheme can also be used to improve your bottom line. Loyalty programmes put the spotlight on customer behaviour. They can show you your best clients - and highlight your worst.

It can be more profitable to lose bad customers than to gain new ones. While your best customers may be bringing in the lion's share of your profit, your worst customers - bargain-hunters that spend little and only buy discounted goods - can actually cost you money. Your loyalty scheme can significantly improve this scenario by rewarding customers and actively dissuading the worst.

Loyalty schemes can also be used to win back lapsed customers. These customers are much easier to win over than cold prospects. They know you and you know them, their buying history and where and how to reach them.

The data generated by a loyalty scheme can offer other valuable insights. It can highlight defection patterns and can also help you improve your product range and stock selection. Knowing what your best customers frequently buy helps you choose which lines to stock - and which lines to expand.

How to effectively increase customer loyalty?

In business, there has been a very well-known adage: keep repeat customers continue to purchasing which is easier and more cost-effective than develop new customers. And that's why customer loyalty programs widely welcomed by SMEs lies.

There are some aspects to effectively increase customer loyalty. When the customer register can get a sample as the membership gift. It may set a questionnaire to get the feedback from customers, when they filled the form, they can get the discount, coupon, voucher or gifts. If customers want to get more discount, followed the Facebook, Tweeter, and Instagram of this brand.

Discount cards: Card holders can get discounts on specific goods or services.

The cumulative number of cards: each purchase or consume several times the total amount reaches a certain amount, the cardholder can get the appropriate discount. For example, for every purchase of 10 cups of coffee, can get a free cup of coffee.

Vouchers or other discounts: When consumer spending reaches a certain amount, will receive a voucher, with a business in the consumer, may offset a certain amount of cash. For example, for every £ 100, it will be able to get a £ 5 voucher.

Special Coupon: this benefit only to those regular or special customers.

There is an important point should be noticed. Don't give the customers gifts which are you think worthless. The real incentive is that both sides have recognized its value. In other words, when the rebate programs fail, perhaps because the starting point of this program is to business owners (business), but not from the viewpoint of the customer / client perspective. So, before you carry out a plan, business owners should first know whether this incentive is to play its due role - make customers purchasing.

Case study

Some example of voucher/ discount of fashion brand as below (Fig 1 & 2).