Customer loyalty marketing – the strategic promotion and management of existing customers’ loyalty toward a brand using incentives – is easily one of the most efficient and cost-effective forms of marketing. Customer-centric marketing revolves around retaining customers, which is more cost-effective than getting new customers. The cost-effectiveness becomes clearer when you note that retained customers are also more profitable than new customers. Loyal customers have not only a higher lifetime value, but also greater average spending per purchase.
Many people think that new customers are the ultimate goal for marketers, but there’s something to be said for customer retention efforts in businesses as well. Existing consumers choose your brand for a variety of reasons, like cost, quality, and (more relevantly) rewards. Loyalty programs were created to give customers an incentive for buying your product. Airlines, credit card companies, and even coffee shops have adopted this mindset through one simple question: “Do you have a loyalty card with us?”
The idea of the punch card was not first created by coffee companies like Dutch Bros., but they certainly perfected this form of loyalty marketing. Customers are encouraged to continue buying coffee drinks from Dutch Bros. because there’s the promise of a free drink for every 10 drinks bought. By promising a reward, your customers feel more inclined to choose your product over others, therefore boosting your revenue.
Punch cards, cash-back rewards, and promotions are great ways to give back to the customers who support you. This creates a relationship where your customers feel valued and rewarded for their business, which – let’s be real – doesn’t every customer want that feeling? By marketing your brand through loyalty programs, your current customers feel better about being loyal to your product. Without these incentives and rewards, your consumers might not feel committed to your brand.
Building trust between your brand and your customers is the key way to implement loyalty to your brand. A relationship with your customers will drive them to come back to your company again and again, because of a simple idea: we trust our friends. Most people will trust their past experiences with a product rather than try to find a new one. The relationship with your consumers should be the most important aspect of your brand. It’s your company’s vision that brings your brand together with your customers to create the perfect team. They buy your product, you reward them; it’s that easy.