Expert advice: how to improve customer loyalty & retention

Customer loyalty & retention… how? It’s a question we get asked a lot by our clients. Brands spend a lot of money on attracting & acquiring new customers, so we need to make sure we keep them as customers. And where possible, we don’t want to pay to acquire them again. 

Our advice: put as much emphasis and investment on making customers loyal and retaining them as you do on acquiring them in the first place. Think of a typical marketing funnel, big at the top and smaller at the bottom. It usually represents the size of the audience at each stage. We reach wide audience numbers, some of them move through the funnel to engage with the brand, and a few of them move further to the sales stage where they convert and become a customer. This also represents the amount of investment in those audiences at each stage. Brands spend millions reaching wide audience numbers, and then thousands on converting them into customers at the bottom of the funnel. Often, customers then fall out of the funnel and are left to their own devices. 

Introducing the flywheel … like the funnel, but a wheel. Circular, even, never ending. Investment and emphasis at all stages is consistent, and reaching that new audience is just as important as engaging with potential customers and retaining customers.

Why is customer loyalty & retention so important and valuable?

Well, did you know just over 30% of people are willing to paymorefor a product or service if it means they’re remaining loyalto a brand. So, if you can nail your customer loyalty & retention, in theory, you can justify slight price increases in line with inflation and other increasing manufacturing costs, something all businesses are currently having to carefully manage due to the cost-of-living crisis.

On top of this, around 50% of consumers will switch brands if they can’t get a hold of the product or service they need – so clearly supply is a huge impacting factor on customer loyalty & retention. If you are experiencing issues with your supply chain, be transparent about it, clearly communicate this to customers and implement something that means they can be informed as and when things are back in stock or available again. 

What tactics have we seen work really well for increasing customer loyalty & retention?

Loyalty schemes with added value

Well, loyalty schemes are an obvious one, but they need to be more than that. Collecting points that can equate to money off future purchases are everywhere and consumers are beginning to expect these types of advantages as a minimum. Membership needs to offer the consumer more than that: early access to product releases, invitations to exclusive events, discounts and offers from other brands that align well with your own. It’s become very apparent to the consumer in recent years (see any Twitter thread about the recent changes to the Tesco Club Card) that brands use loyalty memberships to harvest data, which is to be expected, but it’s how that data is used that’s the key. If you’re crafting a loyalty membership scheme for your brand, really harp back to your personas – what interests your customers, what makes them tick, and what are their reasons for purchasing in the first place. 

Bespoke personalisation

You need to go beyond just using first names in an email. Wouldn’t you rather receive fewer emails, but they’re more interesting and relevant to you? We think everyone would. So, brands should take this insight and adopt it into their email strategy. What if your CRM segmented customers into lists by subject and topic, and customers automatically and fluidly were added to and from subject lists based on the content they engaged with on your website or in your emails? If someone hasn’t engaged in a piece of content relating to a certain topic in 3 months, remove them from that subject’s segmented list. 

Personalisation can also be translated to web experiences. What if you ran a seasonal offer or promotion, but the landing page hero content changed depending on which customer was viewing it? Dynamic content can create a hyper personalised web experience for a user without them even realising it. You may see a reduction in time spent on your page or scrolling, but the user would immediately be presented with content and information that’s relevant to them and in line with what they are already be looking for. 

CRM synced chatbots

Using chatbots that are synced with your CRM provide invaluable insights. There is so much information on a particular customer held within the CRM, if the chatbot they see on your website could be bespoke and relevant to them and what we know about them, there’s a higher chance of them engaging with it and being able to find what they’re looking for easily. 

Advertising on third party

When it comes to advertising on third party platforms, there’s improvements that can be made here too. Linking customer lists and excluding customers from certain types of ads messaging or campaigns ensures we’re  keeping CPA and other costs down . If we’ve already got that customer, there’s much more impactful ways of communicating with them than paying to reach them again. So, be sure to exclude those users from awareness and attraction campaigns and creatives. 

Data usage

There’s an overarching commonality in all of these tactics, and that’s your data. How you use that data can be a make or break for customer loyalty & retention. Use it in the wrong way, you could end up paying to acquire an existing customer again, or even completely turn them off from your brand. Use it effectively and in a smart way and you can implement a very successful and profitable customer loyalty & retention strategy . 

If you need some advice or consultation on how to use your customer data or increase the lifetime value of your customers, the Next Chapter team would be happy to collaborate and help.  Get in touch to start a projector take a look at our varied marketing expertise.