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How do you get customer loyalty & Why its important?

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15th Nov, 2022
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How do you get customer loyalty & Why its important?

An ongoing emotional relationship between you and your client, displayed by how willing your customer is to actively engage with your services and products instead of choosing your competitors, is known as customer loyalty. In simpler terms, customer loyalty is the outcome of a positive experience indulged by your customer through your products or services. The idea of trust and belief in you and your products is the idea behind the concept of customer loyalty.

Customers help you expand and grow your business rapidly while giving hints about your marketing and sales strategies. The loyalty shown by your customers, in turn, helps you promote sales, improve services, and drive revenue.

How to keep your customers loyal to your brand?

It is probably the biggest tactic any business should learn. The ability to serve your customers regularly with the same degree of satisfaction is an art. Here are a few tips and techniques to help you establish a loyal client base.

  • Reciprocate the generosity

You should always return the positive gestures shown to you by your customers. Consumer loyalty might appear like a cunning scheme to improve business. However, the idea of generosity changes it to a positive give and take, a crucial part of customer service.

Your customer expects to be rewarded well, just as you expect large sales from them to establish a firm customer base and respect in the market. It becomes an inherent part of selling to show your customers how much they shall gain with little trouble from your services. Discounts and incentives are a brilliant way of expressing your generosity.

  • Show gratitude and be grateful

Competitors and suppliers constantly hound your customers. By being grateful, you are building a circle of trust, enabling you to serve them reasons why you are worth doing business with. Handwritten notes, personalized messages, and emails with deliveries and confirmations can help you show gratitude. 

  • Incentives with every sale

The give-and-take policy has been classic, and you cannot go wrong with this approach. Everyone looks for added benefits, and providing incentives with every purchase gives you a small edge with customers. You might not be serving a unique service or product, but this approach helps you build a sense of wanting and warmth with your customers. Wooing your customers this way shall help you build loyalty while increasing sales.

  • Eliminate the conventional loyalty program ideology

Every business offers a loyalty program. By scrapping the idea, you stand above the rest. However, to stand above the rest, you must do something different and offer something better to your customers to keep their loyalty. Creating an immersive experience for customers to understand and experience your services helps you have a leaping edge above the rest, reminding customers why they chose your brand.

  • Establishing a community or a forum for your customers

Building an interactive forum where your clients and potential customers could communicate can help you establish loyalty even from prospective customers. It also acts as an additional form of marketing, helping boost sales in the long run. It might not promise profits, but it certainly helps with client morale. Additionally, the platform acts as a knowledge hub to improve your services or products.

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  • Effective and consistent communication with your customers

The customer-brand relationship requires constant two-way communication with effective feedback and response to move towards improvements. You cannot serve your customer without knowing what they need. Communication needs to be at its peak to understand the situation. It helps you comprehend and provide the best services, adding to loyalty from both ends.

  • Continuous up-gradation of your loyalty services

Just like technology, loyalty services also require continuous upgrades and replacements with time. Finding new ways to engage with your customers allows them to keep up with the changes in your organization. Furthermore, it makes them feel like they are a valuable part of your eCommerce brand. Creating new experiences, services, incentives, discounts, etc., helps you get them hooked to your services. Keeping up with changes even in this domain guarantees consumer loyalty.

  • Business evolution

Business evolution requires time and consistent changes. Your customers look for newer and better solutions to aid them with their problems, and hence a business must keep up with the demands and changes in trends. Following trends and making required consistent changes to services will ensure your customers trust your services and rely on your brand to keep up with the trends.

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Why is customer loyalty so important?

It is a game of attraction and ensuring that the magic lasts. This game is tricky and requires a well-executed strategy that undergoes periodic and continuous updates to hold on forever. Here are a bunch of reasons why customer loyalty is important:

  • Greater returns with customer repeatability

Acquiring new potential clients costs much more than retaining an existing client. Your existing loyal clients are more likely to try all your services. Despite your marketing strategies aiming at reaching diverse and different targets, retaining an existing client is where the long-term value resides. As mentioned earlier, incentives and benefits help largely with customer retention.

  • Greater reach

Customers help you find more customers. When establishing customer loyalty, word of mouth can significantly help drive sales. The marketing strategies work better when you have an alibi. Therefore, ensure effective communication forums to assist customers and potential customers. 

  • Acquire valuable customer insights

A brand’s involvement with its customers is an effective tool for understanding the brand’s current position and the required improvements. After all, the customer knows best.  Understanding their side of things gives you an idea of how to make your services meet their needs better. You are rewarded with their loyalty and might also acquire some new brand advocates in the process. It serves you well in maximizing profits in the long run.

  • Decrease in attrition rate

An increase in attrition rate puts your ROI in danger. With improved experiences and loyalty programs, you can effectively tackle this issue. Attention to detail, incentives, discounts, rewards, engagement programs, etc., can help maintain a low attrition rate.

  • Acquisition of first-party data

Being involved with your customers helps you gain data into some useful information to create your stance in the market. Access data carefully to grasp your customer’s ideologies and thoughts firsthand, obtaining a glimpse of what the market is looking for.

What are the different types of loyalty programs?

There are many types of brand loyalty programs. It is hard to determine which is the best as these depend on the business type. Here are the different types of loyalty programs:

  • Point-based loyalty program

This program is the most common and generic form of the customer loyalty program. It follows a simple principle where the frequency of purchasing reflects the incentives provided by the business. An ice cream punch card or tickets at an arcade are the best point-based brand loyalty examples.

  • Tiered loyalty program

The interest and involvement with the business determine the type of incentive granted to the customer. It is the principle of a tiered loyalty program.

  • VIP or paid loyalty program

These programs come with a small fee. VIP programs give the customers access to new services you provide before the general public. It is almost like the prime membership benefits that Amazon provides to its members. 

  • Value-based loyalty program

The program targets specific characteristics of your target audiences to ensure brand loyalty.

  • Partnership loyalty program

It implies the give and take by both parties to benefit equally and retain customers to grow your company.

Understanding customer loyalty and its impact on brands 

Are you looking for the ultimate guide to customer loyalty? Look no further. With upGrad, you can create your guide to customer loyalty and more by strengthening your customer management skills with the Master of Business Administration program offered by Liverpool Business School. The program will help you gain a thorough insight into industry-relevant skills such as leadership, people performance, marketing research, customer service, business economics, and more.

Sign up today and become a part of the leading program!



Karan Raturi

Blog Author
Karan Raturi is the General Manager of upGrad North America. He has also led various finance, strategy, and operations teams at Wayfair, Kurt Salmon, and IBM.
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Frequently Asked Questions (FAQs)

1Which companies have the best customer loyalty programs?

Sephora beauty INSIDER, Myntra INSIDER, Amazon Prime, Hyatt Loyalty Program, Starbuck Rewards, DSW, etc., have the best loyalty programs today.

2What are the benefits of loyalty programs?

1) Improved customer engagement and consumer loyalty 2) Positive impact on brand affinity 3) Enhanced customer experience 4) Retention 5) Better CLV

3What are the 3 Rs of customer loyalty?

1) Rewards 2) Relevance 3) Recognition

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