Loyalty Marketing in 2018:
7 Strategies for Gaining Customers for Life
Loyal customers are the best types of customers to have. Not only do they spend more, but it’s also easier to market and sell to existing happy customers versus new shoppers.
What exactly does it take to gain customer loyalty?
To answer this question, we conducted a quick LinkedIn poll asking consumers what they love most about their favorite merchants. The responses revealed insights such as:
- Customer service experience is the number one factor that contributes to shopper loyalty. Most of the responses to the poll said they keep coming back to retailers that have helpful, non-pushy employees.
- People are loyal to businesses that do good and share their values.
- Other factors that promote customer loyalty are high-quality, attractive merchandise and smooth, efficient shopping experiences.
- A number of respondents said they appreciate when retailers reward them for their loyalty.
- Having a great store policy also helps.
In this guide, we'll take a closer look at these different factors and offer actionable steps you can implement in your business.
By the end of this guide, you’ll have a deeper understanding of shopper loyalty, and you’ll know exactly what you need to do to win customers for life.
Loyalty Strategy #1: Train employees in unparalleled customer service
Our poll, as well as industry studies, indicate that customer service is one of the most important considerations when it comes to loyalty.
People connect (and shop repeatedly) with brands that serve them well. In fact, a study by Wunderman found that “88% of U.S. consumers want to engage with brands that are setting new standards in meeting their expectations”, and “74% said brands can do so by providing a higher level of customer service.”
Having a nice-looking store and an amazing loyalty program is great, however, if your customer service isn’t up to par, you’ll be hard-pressed to win shoppers over.
That’s why the first thing you should do when you’re beefing up your loyalty strategy is to improve your customer service. This starts with having happy and helpful employees who can interface well with shoppers.
Here are some ways to accomplish that:
Hire employees with a natural inclination to serve
Bruce Nordstrom famously said, “we can hire nice people and teach them to sell, but we can’t hire salespeople and teach them to be nice.”
Keep this nugget of wisdom in mind when you’re hiring customer-facing staff. While having sales skills and retail experience is great, we highly recommend that you prioritize an individual’s attitude and disposition over sales abilities.
Providing an exceptional customer experience begins with having the natural desire to serve and engage with people, so look for employees who have that inclination.
Remember, it’s easier to train employees on your store policies and sales techniques than to teach them to be good with people and ‘get’ your customers.
Keep your staff motivated
Already have a retail sales team in place? Keep them happy and motivated. This post on employee productivity discusses how, when your employees are satisfied and love what they do, they will continuously bring their A-game and achieve top-quality results.
Aside from compensating them well, make it a point to reward employees through things like:
- Management and peer-to-peer recognition
- Personalized rewards
- Free or discounted merchandise
- Time off and flexibility.
Arm your staff with the knowledge and tools to best serve your customers
See to it that your employees are well-equipped to provide the best customer service.
Have a proper training program in place so your employees know exactly how to deal with shoppers and how to solve their problems. For best results, consider role-playing different customer situations with your staff so that they can practice the right customer approaches and procedures.
Customer service tools can also play a significant role in ensuring that your associates can do their jobs correctly. The right solutions will depend on your needs, but they typically include:
- Documents outlining your customer service guidelines and policies
- A Customer Relationship Management (CRM) system for tracking shopper behavior and preferences
- Help-desk software to help you communicate better with your customers (this is particularly important for eCommerce)
- FAQ page that addresses common customer concerns.
- Feedback tools that enable shoppers to provide private feedback on their experience with your store.
One great example of a retailer that has their customer service bases covered is Buda Juice, a health and sustainability-focused cold-pressed juice company. In addition to a detailed FAQ page, they also ask customers for feedback on their experience after every purchase with Marsello’s feedback collection feature, allowing Buda Juice to keep improving their customer service and maintain a 97% customer satisfaction score.
- Recognize that gaining loyal shoppers starts with providing amazing customer service.
- Evaluate your existing customer service practices and systems, starting with your staff. Are your employees empowered to serve shoppers better? If the answer is no, then find ways to motivate your team.
- Look into tools you can use to better serve your customers. These can include CRM, help-desk software, feedback software, etc.
Loyalty Strategy #2: Let your values shine through
Remember that Wunderman study we cited earlier? It also found that a whopping 89% of respondents said that they “are loyal to brands that share their values.”
In an age when consumers are more socially conscious than ever before, the retailers who stand out are the ones who stand for something.
Determine what you stand for
What does this mean for you? For starters, it means you need to figure out your core values. If you need help doing this, we recommend following the advice of business and life coach Marie Forleo. She said that you need to determine your Four Ps:
- Purpose – Your story or reason for being
- Principles – What you stand for in your business
- People – Your ideal customers
- Pisses you off – What frustrates you about your industry
According to Forleo, doing this will “help you unearth what's unique about you and can help you articulate your uniqueness in your copy”.
Communicate your values
Once you’ve zeroed in on the things you stand for, you need to find ways to make those values shine through to your customers.
There are several ways to accomplish this.
First, you need to spread the word internally. Explain and demonstrate your values to your employees. It’s essential that you and your staff can authentically embody the things you stand for. This goes back to hiring people with the right attitudes and dispositions.
When everyone in your company lives and breathes your values, it’s much easier to share them with your customers.
The second step is to talk about those values in your marketing and advertising copy. The Four Ps we mentioned earlier can be valuable starting points for this. You can, for example, talk about your purpose and principles on your ‘about’ page or product packaging.
Engage in corporate social responsibility
Executing Corporate Social Responsibility (CSR) initiatives can also help you communicate your values. Consumers love businesses that give back, and they’re more likely to be loyal to brands that support great causes.
A 2017 study by Cone Communications found that “87% will purchase a product because a company advocated for an issue they cared about”.
Talia Richardson, Partner Manager (Asia Pacific) at Shopify, adds that “incorporating corporate social responsibility into your business must come across as authentic and align with your company vision and values. There are multiple ways to adopt CSR into your business – sustainability, diversity and inclusion, health, and innovation are a few examples of areas you can make an impact. Whatever you decide, make sure your team is bought in to your vision and the ‘why’.”
As a retailer, there are plenty of ways to take a stand and support amazing causes. You can, for example, donate a portion of your sales to charity.
A great example of a retailer engaging in CSR is Francesca Jewelry. Francesca gives back in two ways: they have a charity collection that features products whose proceeds go directly to non-profit organizations. The shop also gives customers the opportunity to donate to charity at checkout. The organizations they currently support include:
You could also encourage customers to give back through product donations. Stage & Screen FX, a beauty and cosmetics store, does ‘wandraisers’, where they encourage shoppers to donate old mascara wands to the Appalachian Wildlife Rescue. They award customers with loyalty points for every successful donation.
- Determine your values by articulating your Four Ps: Purpose, Principles, People, and Pisses you off.
- Once that’s ironed out, share your values with your team and strive to become a company that lives and breathes your values – your customers will notice this, and you’ll naturally attract the right audience.
- Consider engaging in CSR to support your values. Are there charities or nonprofits you can team up with? Find them and strike up a partnership that makes the world a better place!
Loyalty Strategy #3: Have a winning product assortment
Another way to keep customers coming back? Always sell products they love. Be thoughtful with your assortments, and, as much as possible, stock items that shoppers won’t find anywhere else.
Merchandising success in this day and age isn’t about stocking more products, it’s about having the right items. Think of yourself as a curator who handpicks styles specifically for your target audience.
Have the right data
Having an amazing assortment starts with the right data. Arm your business with a retail management system that has strong reporting capabilities so you can get insights into your inventory movement.
Dig into your reports to identify and forecast trends. For example, if a particular product type is selling well, you may want to consider stocking more of it. Or, if you discover that your customers love a certain brand, see if you can order more from that supplier.
In addition to inventory information, it also helps to analyze customer data and behavior. This is where having a great CRM comes in.
As Lisa Vitaris, Head of Brand & Acquisition Marketing at Tyro, puts it, “wrangling customer data can be tricky for many businesses, but is absolutely critical to their success. Being able to mine data insights in order to make better business decisions is vital, as is being able to communicate in the right way at the right time, so a good CRM used in the correct way and marketing automation software is paramount.”
Gather direct feedback
Valuable information doesn’t always come from reports or analytics dashboards. You’ll often experience ‘a-ha moments’ by getting direct feedback from your customers. So, talk to them. If you have a brick-and-mortar store, walk the sales floor to get a feel of how shoppers are doing. Chat them up at the checkout counter and ask about the items they liked and whether or not they found what they were looking for.
Another tactic that works great for both online and offline retailers is gathering feedback from customers. Consider setting up a system that automatically prompts shoppers to review your store’s products and experiences. Doing so will help you get to know them better so you can make informed decisions around your merchandising, customer service, and more.
Let product and customer insights drive your merchandising decisions
Once you have enough insights, put that information to good use. Make data-backed decisions when you order products and stock your shelves, and then keep collecting data so you can refine your assortments even more.
If you’re an eCommerce retailer, you’re in a great position to further personalize the merchandising experience of your customers. Think about how Amazon makes relevant product recommendations based on items that you or other shoppers have viewed and bought.
Can you implement a similar practice on your site? Sure you can! There are numerous plugins and solutions in the eCommerce realm that enable you to make better merchandise recommendations. Explore your options and see what works best for your website.
- Look into your product and customer reports to find merchandising trends and insights. What products or styles do shoppers like best? How can you surface more of those items in-store and online?
- Gather feedback directly from shoppers. After each purchase or visit, drop them a line and ask for their comments. Hint: connect your feedback collection to your loyalty program and reward your customers for sharing their thoughts!
- If necessary, explore merchandising solutions for your store. If you’re in eCommerce, this could be in the form of a platform that lets you make relevant product recommendations.
Loyalty Strategy #4: Create delightful shopping experiences
Retail is so much more than buying and selling merchandise. The experience people have when shopping with you plays a significant role in customer retention and loyalty.
When shopping with you is a breeze, customers are more likely to choose you over your competitors and to keep coming back. That’s why it’s important to ensure that shoppers have a delightful experience when they’re browsing and buying from your shop.
A big part of accomplishing that will come from your staff. As we mentioned earlier, it’s essential to have a team of customer service superstars who can wow your shoppers.
Ensure that customers have a smooth shopping journey
In addition to providing remarkable customer service, you need to establish smooth and seamless processes for your customers. Make it easy for them to find, buy, and get their hands on their purchases.
This requires looking at the shopping journey of your customers and making sure it’s as smooth as possible. Map out their journey from product discovery to fulfillment, and then identify bottlenecks or pain points you can address.
For example, if you’re running an eCommerce website, you may discover that the checkout experience is cumbersome and causes people to bounce. Use that insight to improve. Or, if you have physical and digital shops, you may want to connect your online and offline stores so shoppers can do things like buying online and pick up in-store.
Running a loyalty program? Make it easy for people to join, earn, and redeem rewards. A great example of this in action comes from Avanchy, a shop that sells sustainable, eco-friendly, and functional baby dishes. Avanchy enables its program members to earn rewards in multiple ways, thus making their loyalty program experience much more delightful.
Their loyalty explainer page is colorful, user-friendly, and fun – they have plenty of images displaying their products and a clear outline of how their loyalty program works, including how to earn points, what you can redeem points for, and their loyalty program FAQs.
Having a mobile-friendly shopping experience is crucial, as more and more of your customers are shopping on the small screen. That’s why, if you don’t have a mobile commerce strategy, you’re missing out on sales and engagement opportunities.
Editor-in-Chief at BigCommerce, Tracey Wallace, says, “for brands of all sizes, a mobile-friendly site is so important it's almost not worth mentioning (except so many people aren't doing it). Beyond that, though, you also need mobile-friendly payment options like Apple Pay, Amazon Pay, and PayPal One Touch. These are one-touch experiences that remove the need for consumers to type in all their info on a tiny screen – which most just won't do.”
“Also, think through mobile image optimization and AMP,” she continues. “We know Google will be altering their mobile algorithm in July 2018 to account for this. And Google isn't just doing it for the sake of it. They are doing it because slow-loading mobile sites are a bad experience. So, speed yours up.”
“For brands with larger catalogs, faceted search and dropdown menus are incredibly helpful for navigating. Think through how this typically desktop experience can translate over to mobile as well.”
Keep the brand experience consistent
As a modern business, you likely have a presence on multiple channels (i.e., eCommerce, brick-and-mortar, social media, mobile, email, etc.).
Here’s the thing: consumers often move from one channel to the next, so you should ensure that the experience they have with your brand is consistent, no matter where or how they’re shopping. A disconnected brand experience is confusing and won’t win you any loyalty points with shoppers.
Be very clear about your brand identity and have it come to life beautifully across multiple channels. You can do this by using similar color palettes and imagery on your website, social accounts, and other customer-facing assets.
Have a look at what Francesca is doing. Their team works hard to create a consistent brand experience for their customers across both their online store and brick-and-mortar stores. They run their loyalty program across both to make sure their members earn for purchasing however they choose and to make it easy for them to redeem rewards.
- Figure out the shopping journey of your customers from product discovery all the way to fulfillment. What actions or steps do they take at each stage of the process? Map out everything, and find inefficiencies.
- Once you’ve identified those inefficiencies or bottlenecks, solve them. Be it a slow checkout process, a disconnected online, mobile, and offline store, or slow customer service, identify the issues and fix them ASAP.
- Focus on the customer. Before adopting a new program or technology, be certain it’s something that truly adds value to the shopping experience.
- Keep your brand experience consistent across multiple channels. Use the same assets and technologies so your customers can interact with your brand on different places or devices without feeling disconnected.
Loyalty Strategy #5: Craft customer-friendly (but fair) policies
Your store policies can have an impact on shopper retention and loyalty. Consumers hate jumping through hoops, so if your policies make it difficult for them to do things like return products or redeem rewards, you’ll be hard-pressed to get people to come back.
Now, this isn’t to say that you should be too lenient and allow consumers to take advantage of you. The key is finding the right balance between being customer-friendly and protecting your business.
Here are some tips to help you do that:
Run the numbers
When crafting your store rules or guidelines, determine the costs associated with certain tasks. For example, if you’re writing your returns policy, you may want to figure out your business’s return rate, as well as the costs that come with processing returns.
If the numbers are manageable, consider adopting customer-friendly policies to give shoppers more confidence in their purchases. However, if the costs are too high, you may want to err on the side of caution and be more strict. You should also establish measures that prevent people from taking advantage of your policies.
For example, some businesses take note of the return rates of their customers. If a shopper returns items too frequently, the retailer could flag that customer and restrict future purchases or returns.
Be more fluid with your policies
Your store policies don’t have to be set in stone. One thing you can do is empower your staff to use their judgment when dealing with customers.
Let’s say a customer is trying to redeem an expired gift card. Instead of automatically rejecting the request, you could take a closer look at the customer’s purchase history. If they’re a frequent shopper, you may want to give them a pass. Doing so can build goodwill and encourage them to come back.
Of course, you probably wouldn’t do the same thing if the customer has a history of frequent product returns or fraud.
Check out what your competitors are doing
Having trouble ironing out store policies? Do some competitor research to find out how they are structuring their rules and guidelines.
While you wouldn’t want to copy them exactly, being aware of your competitors’ policies could give you some inspiration on how you can craft your own. You can also make sure your policies differentiate your shop from similar retailers.
- Be thoughtful about your policies. Come up with guidelines that are customer-friendly, yet also make business sense.
- Although it’s a tricky balance, you can craft the right policies by first looking at your numbers.
- Also, consider empowering your associates to be more flexible with your policies and deal with situations on a case-by-case basis.
Loyalty Strategy #6: Be relevant with your customer interactions
Interacting with customers in relevant ways not only differentiates your brand, it also strengthens shopper relationships and loyalty.
Wunderman’s study found that among their respondents, “56% said they feel more loyal to brands who ‘get me’ and show a deep understanding of their priorities and preferences.”
The best way to show shoppers that you ‘get’ them is to communicate with them in the most relevant way. This can be as simple as using bilingual copy if you’re catering to shoppers whose first language isn’t English.
Paris-based shoe and accessory retailer JMLeGazel does this really well. Their website can easily be translated to both English and French, and they even use bilingual copy for their loyalty program.
Adopt RFM segmentation
If you have a large customer database, you should consider implementing personalization at scale. The last thing you want is to ‘batch and blast’ your customers when they have different profiles, histories, and preferences.
If it makes sense for your business, consider implementing Recency Frequency Monetary (RFM) segmentation when communicating with your shoppers.
Here’s a quick look at what the RFM method entails:
R stands for Recency, and it pertains to the amount of time that has elapsed since a customer interacted with you or completed a purchase.
F, which stands for Frequency, is all about how often a shopper engages with or purchases from you.
M, which stands for Monetary, pertains to the amount of money the customer has spent at your store.
The RFM method is an effective way to slice and dice your customer database. It helps you identify your best customers, the ones with potential, and the shoppers who may need a little nudge to engage with your brand.
Try to apply RFM segmentation to your database, and then craft campaigns accordingly. For example, you can use this method to figure out who your top spenders are, so you can send them exclusive content or offers (and improve loyalty even more).
Or, you could identify shoppers who haven’t purchased from you in a while and run a campaign to re-engage them.
Whatever the case, see to it that your messages are relevant and personalized.
- Be as relevant as possible when communicating with your customers. For example, if you have customers in non-English-speaking countries, consider offering translation options on your website.
- Segment customers using the RFM method. Use the practice to identify key customer groups (VIPs, slipping away, etc.), and then craft campaigns accordingly.
Loyalty Strategy #7: Build a community
Community can be a powerful driver of loyalty. People love connecting with like-minded individuals, and brands that enable those connections are often rewarded by having a solid and loyal base.
As Jason Bowman, Asia-Pacific Team Lead at Shopify Plus, puts it, “any business building a Brand should aim to connect with customers via shared visions and passions. This can turn a customer into a supporter – someone that has the motivation to help the business grow beyond just buying a product.”
Cook up ways to bring people together through your business. Chances are, your customers all have something in common (i.e., shared values, common hobbies, love for the same products). Leverage those commonalities to build a community around your brand.
Need inspiration to help you accomplish this? Check out what the team at NaturallyCurly is doing. More than just an online store that sells hair products, NaturallyCurly is a community and beauty content platform that promotes healthy discussions on everything from hair care to self-acceptance.
NaturallyCurly has the ‘Style Nook,’ a place for their customers to share inspiring stories, photos, practical advice, and more.
They even have their very own paperback book titled The Curl Revolution. The book tells the stories of the curly hair industry and their customers, and features many of the leading curl innovators. It's available to purchase in their store and has rave reviews.
Another amazing way to build a community is to host events. The K.A. Artist Shop, an all-around space for art supplies, stationery, and more, executes this strategy incredibly well.
They host loads of art events to bring the creative community together and showcase local talents to keep people inspired.
- Find commonalities among your customer base. These could be shared values, common hobbies, or love for the same products.
- Bring people together using those commonalities. Consider holding events, setting up online forums, or creating Facebook groups where people can congregate and connect.
We just shared a ton of loyalty-centric information and strategies with you, and we hope you’re inspired to take your customer retention and loyalty efforts to the next level. Where you go from here depends on your business situation.
We don’t recommend you try to implement all seven strategies at once. The best thing to do is figure out the areas in your business that need the most improvement and start there.
For example, are you getting a lot of complaints about customer service? If so, you may want to tackle that first. Are shoppers having a hard time interacting with your brand across channels? Then the first order of business should be to create that seamless brand experience.
And if you require assistance implementing any of these strategies, know that there are powerful tools out there. From eCommerce management and retail analytics to tools that promote customer loyalty and retention, there are numerous solutions that can make your business life easier.