Customer loyalty: What is this concept about?

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Customer loyalty , three words that will change your life in your business. Increased profitability, how to sell more, high ROI, effective marketing strategy , successful SEO and new customers are within your reach.

Find out once and for all why you should take care of the clients you already have and, thus, be able to earn a lot from them.

Keep reading!


Customer loyalty is, by nature, a marketing and sales strategy that vnpay database seeks to recognize and reward people who have consistently purchased or interacted with a brand.

A good technique is, for example, to distribute points or benefits and graduate customers to higher levels of loyalty the more they buy.

These are incentives and benefits that commonly turn a potential customer into a regular consumer or, better known as: "brand ambassador."

Some of the benefits that organizations most commonly apply may include:

free merchandise;
rewards;
coupons or internal benefits;
as early access to new products.
With this as a premise, you can already imagine that this concept is fundamental for companies, and you are not wrong, now we will tell you exactly why.

What is its importance within marketing and sales strategies?
Imagine for a moment that a customer is loyal to your brand and every time you develop a new product, or add value to your services, they seek to buy from you and, even if they don't, they recommend you to their inner circle of friends. In other words, they become an ad honorem brand ambassador - they do it without expecting anything in return!

In fact, personalized referrals generate twice as many sales as paid advertising. That's a win-win, don't you think?

Without a doubt, a marvel. This is just one point where we observe its importance within an inbound marketing and sales strategy. Now we are going to detail 3 more factors that make customer loyalty the icing on the cake in your results-oriented planning.

1. They build an emotional connection
Loyalty programs drive sales and increase customer lifetime value. At the most basic level, that’s done through incentives; but there’s something deeper going on here, and the emotional connection they foster can be even more important.

Customer loyalty helps build emotional engagement through repeat behavior. However, a creative approach to the offers you make can do more. Curating a large number of third-party promotions (access to restaurants, movie theaters, spas, and retailers) has the potential to create a community and a “lifestyle” perception that helps emotionally connect customers to your brand.

If you manage to associate this with personalization, the impact is even greater, such as creating a blog where you seek to reach your target audience.

As a great example, there's NikePlus , Nike's mobile loyalty program.

Members use the Nike branded app to access birthday rewards, member-exclusive products and content, invitations to offline events and online workouts.

As you can imagine, this program was a huge success. Nike Plus members reportedly spend 3 times more than non-member shoppers.

2. Repeat customers have a high ROI
It costs 5 times more , on average, to acquire a new customer than to retain an existing one. Existing customers are 50% more likely to try a new product and spend 31% more per purchase than new customers.

While marketing and sales efforts aimed at reaching potential customers are essential for growth, retaining them is where the long-term value lies. If we don't manage a positive retention rate, we're more likely to be replaced and go to the competition.

Encouraging loyalty through loyalty building is essential to avoid high churn rates and retain high-value customers.

This is, in turn, a cost-effective approach to driving sales.

Creating a relevant and engaging rewards program means you can allocate fewer resources to traditional advertising efforts and spend more time building valuable, long-term relationships with existing customers.

3. A high level of loyalty attracts new customers
Loyal and satisfied customers are one of your most powerful marketing tools. In the age of e-commerce and online review websites, positive word of mouth from customers is essential to attracting new customers.

In fact, 83% of consumers trust personal recommendations more than any other form of marketing.

With a well-designed customer loyalty program, we can gamify and incentivize referrals, rewarding those who invite new buyers.

Referred customers are more loyal, more profitable, and have lower churn rates than non-referred customers. Ultimately, with a loyalty process and a good way to retain them, expanding your customer base has never been cheaper.

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What is your role in providing customer-oriented service?
The role of customer loyalty is, in a nutshell: to create a hermetic group of buyers who not only buy, but also spread the word about how good our products or services are.

To achieve this, marketing and sales teams across all businesses must provide a unique experience not only in the customer journey , but also in after-sales service.

So a good way to look at it is this:

If we offer a new product or service, we can offer something extra to encourage repeat purchases or give something free to make them feel special.

A clear example of this is the launch of the new Galaxy A53, where Samsung offered a limited 75% discount e-voucher to purchase its Galaxy Buds 2. This is clearly a customer loyalty strategy.

It's often a question of companies giving away free extras, but it's a tactic that doesn't have to incur huge costs. After all, psychologist Norbert Schwarz found that spending as little as 10 cents can create reciprocity between two people.

6 tips for an effective customer loyalty strategy
Below, we bring you 8 key tips when you want to develop a successful customer loyalty strategy.

I. Offer unique rewards, not just “free stuff”
Traditional "loyalty marketing" often relied on giving away "free stuff" in exchange for a consumer purchase or action.

Now, more vendors are looking to offer great experiences, sweepstakes, and digital content as rewards. In other words, brands need to be strategic when choosing their rewards, which brings us to Tip #2.

II. Provide rewards with intrinsic value
You already know that not everything that is free is effective. Now, you must offer rewards that have intrinsic value for consumers.

In other words, a loyalty program shouldn't just give rewards for the sake of "giving something." You should provide rewards that are tailored to your buyer persona .

III. Gift cards and cash.
Some existing loyalty program members prefer gift cards and cash instead of physical items.

This can help the company's bottom line as it eliminates the need for storage and shipping costs.

IV. Socialize the rewards program
At this point, you'll need to leverage 21st-century word-of-mouth marketing, also known as social media, to help exponentially grow your loyalty programs.

Due to the huge growth of these platforms, social interaction has become one of the most effective forms of motivation in recent decades.

Therefore, for successful customer loyalty, you will need to "socialize" on social media, websites or other virtual touchpoints thanks to digital marketing , and even physical ones.

V. Move the mark from “inherited loyalty” to “cult loyalty”
“Legacy loyalty” occurs when a consumer buys from a particular company because that is the brand they have always known. In contrast, “cult loyalty” refers to a more intertwined relationship between a consumer and a company, where the consumer identifies with the brand on a deeper level, such as fans of Apple, Samsung, Android, and any other big brand.

Since the 1970s, and especially with millennials, consumers have moved away from legacy loyalty to cult loyalty, so you need to tailor your rewards plan to generate the latter.

VI. Thank consumers before making a purchase
This is known as “reciprocal loyalty” and is where a brand offers its thanks to a consumer before making a purchase.

For example, your business could discover a way to thank customers who have spent time on your website, tweeted at you, or participated in an online or real-world event.

Such pre-purchase consideration works to instill a sense of loyalty in a customer.

That's all for now!
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