In times when fierce competition and consumer volatility are commonplace, loyalty plays a vital role for every marketer. Loyalty is a surefire way to help you differentiate yourself from your competitors, solidify your brand community and increase customer lifetime value. Your customers should be at the core of everything you do, it’s about creating the most meaningful and connected experience ever so that they come for more. An Accenture report from 2017 describes that 66% of consumers spend more on brands that they’re loyal to.
Importance of customer loyalty in 2021
For any profitable and successful brand, loyal customers provide the foundation. Not only do these valuable customers help a brand grow when times are good, but they also help the brand stay afloat when times are tough.
The turnover and profits of brands are positively influenced by loyalty. Unlike a non-loyal customer, a loyal customer is a revenue generator. 93 percent of the surveyed companies claimed loyalty was a strategic benefit for them. More specifically, while loyal customers account for an average of 20 percent of your company’s overall customer base, 80 percent of total profits are paid for by these same loyal customers.
Loyalty programs provide the data and the incentive to curb customer churn. The two most expensive churn points for a B2C organization are 1) between the second and fourth transaction and 2) with your best customer set. For the first group, the loyalty program creates a way for a brand to capture the customers information and start communicating with and even rewarding them from the start. For the second group, a loyalty program provides the communication mechanism to listen to these best customers. By listening and watching their behavior a brand is more likely to know when a customer may be leaving. Plus with a loyalty program, the brand has tools to recognize and/or reward this best customer, giving them reason to stay.
If customers are delighted with your services, they will positively portray your brand and are likely to be your brand advocates. They will share their experiences with family and friends. They will share on social media. They will rate and review products on your website. All of these actions will enhance your brand image. At the same time, a happy customer will bring repeat business and referrals. Advocate referrals tend to be the most profitable acquisition segment, most mirroring the advocate that brought them in.
Loyal customers equate to long-term, sustainable business success. Customer loyalty is the best strategy to ensure that your business not only survives but thrives during challenging times. According to the White House Office of Consumer Affairs, on average, loyal customers are worth up to ten times as much as their first purchase. If you can successfully build an emotional bond with your customer through offering positive experiences and a sense of belonging, you will experience higher CLV.
Brands these days focus on intelligent loyalty which is establishing a long lasting relationship with your customer based on lucrative value propositions and proposals that adapt to varied profiles and preferences in a profitable way. Don’t forget to place customer intelligence at the heart of this relationship.
Annex Cloud’s Loyalty Experience Manager, an advanced digital-ready customer retention and loyalty solution, helps businesses maximize average order values (AOV), increase frequency of purchase (FOP) and is designed to engage and reward your most valuable customers. Since 2010, Annex Cloud has provided more than 250 leading organizations with the ability to engage tens of millions of their customers one-to-one at scale.
To further illustrate this point, here’s an actual customer loyalty performance benchmark; Mackenzie Childs, an artisan home furniture supplier, has implemented our tiered customer loyalty program with omni-channel and referral marketing capability. They have been able to boost the subscription base as well as its average order value by over 20% as well as increase purchase frequency from loyalty members by 42%.
Drive your business performance today with us. Call for a demo.