Most of Your Profit Comes From Existing Customers. Are They Loyal Enough to Stay?
by Jonathan Biri
CEO @ Conversion Bear
Bonus Material: 50 Customer Loyalty Program Case Studies
New customers won't make your ecommerce business more profitable.
Surprised?
If you are, this article will help your business increase its profits up to 95%... Without chasing new visitors and new customers.
Yep, you read that right. 95%.
If you're already making around 100k per month, this means your shop could finally reach the $2m target per year.
Oh, did we mention this won't cost you too much either?
New customers won't make your ecommerce business more profitable.
Surprised?
If you are, this article will help your business increase its profits up to 95%... Without chasing new visitors and new customers.
Yep, you read that right. 95%.
If you're already making around 100k per month, this means your shop could finally reach the $2m target per year.
Oh, did we mention this won't cost you too much either?
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The road to this profitable result is simple: it's about going beyond customer retention (that is, returning customers) to drive customer loyalty. This means creating a scenario in which your existing customers keep returning to your shop, spend more each time, and share your business with their community.
If it sounds like a golden opportunity, it's because it is.It's cheaper than acquiring new customers, and it'll get you more results in the long-term.
In this article, we'll show you when it's time to bet on customer loyalty, and what strategies you could use to achieve it. We'll also tell you how it can benefit your business (yes, there's more to it than just profit).
Remember: 65% of a company’s business comes from existing customers.
Not investing in customer loyalty strategies should give you a severe case of FOMO, and we'll tell you why.
If it sounds like a golden opportunity, it's because it is.It's cheaper than acquiring new customers, and it'll get you more results in the long-term.
In this article, we'll show you when it's time to bet on customer loyalty, and what strategies you could use to achieve it. We'll also tell you how it can benefit your business (yes, there's more to it than just profit).
Remember: 65% of a company’s business comes from existing customers.
Not investing in customer loyalty strategies should give you a severe case of FOMO, and we'll tell you why.
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Most of Your Profit Comes From Existing Customers. Are They Loyal Enough to Stay?
Let's start from the beginning (and by stating the obvious): traffic is key to your ecommerce site's success. Without new visitors, you can't generate new customers.
That's why business owners invest in paid traffic strategies. But as you know, it doesn't end there.
You can have new visitors that don't buy anything: enter conversion rate optimization strategies. Because you need to get visitors to find your shop and buy there (aka conversion).
That's why business owners invest in paid traffic strategies. But as you know, it doesn't end there.
You can have new visitors that don't buy anything: enter conversion rate optimization strategies. Because you need to get visitors to find your shop and buy there (aka conversion).
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But what happens next?
Once you get a new customer, you wouldn't just thank them and abandon them forever, would you?
Unfortunately, that's what happens if you don't set up a customer loyalty strategy for your ecommerce site.
After all the time and money you put into converting them in the first place, don't simply let them go!
You have to keep them coming back. You have to gain their trust so they can spread the word about the great experience they made with your business.
Once you get a new customer, you wouldn't just thank them and abandon them forever, would you?
Unfortunately, that's what happens if you don't set up a customer loyalty strategy for your ecommerce site.
After all the time and money you put into converting them in the first place, don't simply let them go!
You have to keep them coming back. You have to gain their trust so they can spread the word about the great experience they made with your business.
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Customer loyalty strategies allow you to keep those high-priced new customers coming back to shop with you.
If you want your business to succeed and become more and more profitable in the long-term, you need to make sure your existing customers are happy. You want them to love your brand.
(Spoiler: the biggest takeaway from this article is that loyal customers are a free, self-perpetuating marketing tool.)
And we'll teach you how to do that.
If you want your business to succeed and become more and more profitable in the long-term, you need to make sure your existing customers are happy. You want them to love your brand.
(Spoiler: the biggest takeaway from this article is that loyal customers are a free, self-perpetuating marketing tool.)
And we'll teach you how to do that.
Investment: New Customers x Existing Customers
By now, you know that most profitable customers are the loyal ones.
But if you still don't believe us: a new customer costs five times more than an existing one. And even though you've spent a lot of money trying to get that new visitor to come to your website, you still only have a 5–20% chance of selling to them.
Existing customers, on the other hand, have a higher likelihood of buying: 60–70%.
Don't you agree that's a pretty impressive probability?
But if you still don't believe us: a new customer costs five times more than an existing one. And even though you've spent a lot of money trying to get that new visitor to come to your website, you still only have a 5–20% chance of selling to them.
Existing customers, on the other hand, have a higher likelihood of buying: 60–70%.
Don't you agree that's a pretty impressive probability?
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It's an easy one to choose, and it follows a famous 80/20 principle that has been applied to many different scenarios, including sales and marketing.
Understanding the Pareto Principle (80/20)
Vilfredo Pareto was an interesting guy. He didn't have an ecommerce site, but unwillingly, in 1906 he created a principle widely used by sales and marketing teams to this day.
Pareto's 80/20 principle (or 80-20 rule) is simple: it states that 80% of results come from 20% of all causes. This way, you can identify what's working best, and prioritize those actions.
It's easy to see why this principle became famous: you can apply it to pretty much any topic.
Pareto's 80/20 principle (or 80-20 rule) is simple: it states that 80% of results come from 20% of all causes. This way, you can identify what's working best, and prioritize those actions.
It's easy to see why this principle became famous: you can apply it to pretty much any topic.
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When it comes to your ecommerce site, the Pareto Principle means that 80% of your sales come from 20% of your customers.
And when you know what works for your top 20% customers, you can use those strategies to boost your shop's sales.You'll attract similar people and increase your future profits!
And the main insight is: the top 20% will probably be your loyal customers.If you've never measured your customer loyalty levels before, it's about time you start to.
And when you know what works for your top 20% customers, you can use those strategies to boost your shop's sales.You'll attract similar people and increase your future profits!
And the main insight is: the top 20% will probably be your loyal customers.If you've never measured your customer loyalty levels before, it's about time you start to.
Customer Loyalty x Customer Retention: What's the Difference?
When we talk about a customer coming back, we're talking about customer retention.The term is self-explanatory: to keep a customer coming back to your shop.
But does that mean that a returning customer is a loyal one?
Absolutely not.
And if customer retention is about increasing the number of repeating customers and, consequently, their profitability, what's the difference anyway?
A returning customer is that on-again, off-again relationship. You know the person will come back (and consequently, leave), but you don't know when. Was it last month, last year? If only they know how much you miss them!
But does that mean that a returning customer is a loyal one?
Absolutely not.
And if customer retention is about increasing the number of repeating customers and, consequently, their profitability, what's the difference anyway?
A returning customer is that on-again, off-again relationship. You know the person will come back (and consequently, leave), but you don't know when. Was it last month, last year? If only they know how much you miss them!
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Frustrating, we know.
A loyal customer, on the other hand, it's true love – the fairy tale kind. Holding hands by the sunset, promising eternal companionship, telling everyone how amazing you are. Finally!
While customer retention strategies allow you to keep the customers in your existing customer base (and have a great customer experience), customer loyalty strategies are one step beyond that.
Eternal love for your brand.
A loyal customer, on the other hand, it's true love – the fairy tale kind. Holding hands by the sunset, promising eternal companionship, telling everyone how amazing you are. Finally!
While customer retention strategies allow you to keep the customers in your existing customer base (and have a great customer experience), customer loyalty strategies are one step beyond that.
Eternal love for your brand.
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Why Customer Loyalty Is Better
Loyal customers not only buy your brand again and again, they promote your shop on your behalf. They generate more profit, yes – but more importantly, they generate growth.
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While retention can mean a struggle, loyalty is your ecommerce site nirvana.To wake up everyday with new signups, constant referrals, and higher checkouts. You can't wait to start, right?
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Here are a few more compelling reasons to invest in customer loyalty strategies:
• It saves a lot of money. Customer acquisition is expensive, after all.
• Word-of-mouth is priceless. Personal trust – i.e. between your customers and their friends and family – is incredibly powerful.
• Engaged customers are easier to sell to. Most customers won't buy anything the very first time they visit your shop. However, they're more likely to convert if you're already in touch with them.
Unfortunately, though, it's not a strategy fit for every business – it has the right time in a shop's timeline.
First, let's check if your shop is ready and prepared enough to invest in customer loyalty strategies.
• It saves a lot of money. Customer acquisition is expensive, after all.
• Word-of-mouth is priceless. Personal trust – i.e. between your customers and their friends and family – is incredibly powerful.
• Engaged customers are easier to sell to. Most customers won't buy anything the very first time they visit your shop. However, they're more likely to convert if you're already in touch with them.
Unfortunately, though, it's not a strategy fit for every business – it has the right time in a shop's timeline.
First, let's check if your shop is ready and prepared enough to invest in customer loyalty strategies.
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How Do You Know If Your Shop Is Ready For Customer Loyalty Strategies?
We understand that the promise of customer loyalty, along with its profitability and low costs, is a shiny one.
Everyone wants to do it!
However, you might not be ready for it…It's very similar to being a kid – there are some things you simply are not allowed to do while you're small. You need to grow before you're able to go on wild roller coasters (that is, customer loyalty strategies).
Everyone wants to do it!
However, you might not be ready for it…It's very similar to being a kid – there are some things you simply are not allowed to do while you're small. You need to grow before you're able to go on wild roller coasters (that is, customer loyalty strategies).
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And that's because customer loyalty relies heavily on customer data. If your shop doesn't have enough traffic, chances are you don't have enough data to start implementing customer loyalty strategies.
You have to have a customer base big enough to invest in making it loyal. You have to be a certain size to make the most of it. Otherwise, it shouldn't be a priority just yet.
For example, if your shop is making anything between $10k and $100k per month, it's worth giving it a try.
If not – we're sorry to hear it. Don't lose hope!Here's what you should do instead:
• Increase your shop's traffic through paid-per-click (PPC)
• Invest in search engine optimization (SEO)
• Invest in conversion rate optimization (CRO)
• Gather customer data through research
You have to have a customer base big enough to invest in making it loyal. You have to be a certain size to make the most of it. Otherwise, it shouldn't be a priority just yet.
For example, if your shop is making anything between $10k and $100k per month, it's worth giving it a try.
If not – we're sorry to hear it. Don't lose hope!Here's what you should do instead:
• Increase your shop's traffic through paid-per-click (PPC)
• Invest in search engine optimization (SEO)
• Invest in conversion rate optimization (CRO)
• Gather customer data through research
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On the other hand, if your shop is:
* Growing quickly: it's time to study your customers (e.g., with A/B testing, quantitative and qualitative research) to make sure they'll come back.
• Established, but not growing anymore: customer loyalty strategies could increase the lifetime value of each client, thus promoting growth again.
• Successful and profitable: well, the sky's the limit! Customer loyalty might show you that your shop could be growing even more.
But how big is the impact that customer loyalty can have on your business?
* Growing quickly: it's time to study your customers (e.g., with A/B testing, quantitative and qualitative research) to make sure they'll come back.
• Established, but not growing anymore: customer loyalty strategies could increase the lifetime value of each client, thus promoting growth again.
• Successful and profitable: well, the sky's the limit! Customer loyalty might show you that your shop could be growing even more.
But how big is the impact that customer loyalty can have on your business?
Customer Loyalty: a Bigger Splash
A sad fact: 50%-60% of new customers never return.
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What? How depressing is that?
All of your traffic acquisition investment (and time) has gone to waste if you're not ready to keep those customers returning to your shop.
While traffic acquisition means investing in the now, customer loyalty means preparing your business to be profitable in the future.
The focus is on greater lifetime value.
(Remember that lover analogy again.)
Let's try again with numbers:
All of your traffic acquisition investment (and time) has gone to waste if you're not ready to keep those customers returning to your shop.
While traffic acquisition means investing in the now, customer loyalty means preparing your business to be profitable in the future.
The focus is on greater lifetime value.
(Remember that lover analogy again.)
Let's try again with numbers:
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As you can see, a 5% increase in customer loyalty leads to fast growth. And that's difficult to match with new customer acquisition only.
Before starting to implement customer loyalty strategies, find out where your shop is with these measurements (but remember to measure them within the same time frame!):
Before starting to implement customer loyalty strategies, find out where your shop is with these measurements (but remember to measure them within the same time frame!):
1. Repeat Purchase Rate
This measures how much of your customers are coming back for more. You need to measure this to keep track of your success rate regarding customer loyalty. The higher this is, the more returning customers you have.
To measure it, simply divide the number of repeating customers by the number of unique customers at a time frame of your choice (e.g., one month).
2. Loyalty Program Redemption Rate
To determine the success rate of your loyalty program, divide your total number of customers by the number of customers enrolled (and participating!) in your program.
This measure only applies if you've already established a loyalty program, of course.
If not, keep reading to find out why it's important to build one!
This measure only applies if you've already established a loyalty program, of course.
If not, keep reading to find out why it's important to build one!
3. Average Order Value (AOV)
Are you ready to find out how much your purchases are worth? Then calculate your average order value (AOV).
This is one of the easiest measures to calculate: simply divide the total revenue of your shop by the number of orders placed.
This is one of the easiest measures to calculate: simply divide the total revenue of your shop by the number of orders placed.
If your business runs on Shopify, they will calculate this data for you.
4. Customer Lifetime Value
This is the final measurement to calculate – and the one that tells you how much each of your customers is worth.
Once you have your purchase frequency, multiply it by your average order value (AOV).
Once you have your purchase frequency, multiply it by your average order value (AOV).
And ta-da: this number is the indicator of your current customer loyalty power.
Unhappy with it?
Let's find out which strategies you can apply to your business in order to improve your customer loyalty.
Unhappy with it?
Let's find out which strategies you can apply to your business in order to improve your customer loyalty.
Finally: 4 Customer Loyalty Strategies to Apply to Your Business
Loyalty and referral programs, community building, excellent customer service, and genuine relationship building are only a few of common strategies used to develop and improve customer loyalty.
Here are a few examples (and a mini-case study for each one), so you can apply to your ecommerce site – and hopefully get the same results.
Here are a few examples (and a mini-case study for each one), so you can apply to your ecommerce site – and hopefully get the same results.
Strategy #1: Loyalty (or Reward) Programs (Aim to be as Successful as Starbucks)
Loyalty programs are one of the most popular ways of driving customer loyalty. It's simple and easy to implement: make sure customers can earn points every time they shop with you.
Once a certain number of points is achieved, customers can exchange them for free products, discounts, or even free samples.
(These are also known as reward programs).
Once a certain number of points is achieved, customers can exchange them for free products, discounts, or even free samples.
(These are also known as reward programs).
Why does it work? Loyalty programs reward customers according to the amount of money they spend with you. The more money, the more points… Which can boost the average order value (AOV), making your shop earn more money.
(Customers are interesting beings: they are willing to buy more if you offer them one thing for free).
Example: Starbucks
OK, maybe you don't have a famous coffee shop brand. But that doesn't mean you can't learn a lot from Starbucks' rewards program.
What is it? "Starbucks Rewards" is an app that offers discounts and free products to members, including birthday rewards, free in-store refills and double-star days (limited-time promotions where members earn twice the points).
The program is responsible for most of the brand's $2.65b revenue (between 2017–2019). During the same time, the program grew over 25%, reaching 16m members.
And here's the best part: 40% of Starbucks' sales in the US come from people who are members of the program.
People are not indifferent to Starbucks: they love it (and buy the mugs to show their love and support too).
(Customers are interesting beings: they are willing to buy more if you offer them one thing for free).
Example: Starbucks
OK, maybe you don't have a famous coffee shop brand. But that doesn't mean you can't learn a lot from Starbucks' rewards program.
What is it? "Starbucks Rewards" is an app that offers discounts and free products to members, including birthday rewards, free in-store refills and double-star days (limited-time promotions where members earn twice the points).
The program is responsible for most of the brand's $2.65b revenue (between 2017–2019). During the same time, the program grew over 25%, reaching 16m members.
And here's the best part: 40% of Starbucks' sales in the US come from people who are members of the program.
People are not indifferent to Starbucks: they love it (and buy the mugs to show their love and support too).
There are a lot of lessons we can take from this example, and another one of them is that revamping rewards programs should not stop.
Created in 2015, Starbucks has constantly updated and revamped their program to include new rewards, and offering customers more flexibility and options.
It's easy for a customer to forget about all the reward apps and programs they signed up to. Give your program a good polish every few years, and make sure it's still on your customer's mind.
Or, if you're still into the relationship analogy: if a partner stops putting effort into the relationship, chances are we will forget them soon.
How can you use it? Reward programs can be a great incentive for a customer to choose your shop instead of your competitor's.
Starbucks' coffee is generally premium-priced. However, when offered a reward, customers still choose the more expensive brand.
What are your competitors doing, loyalty-wise? What are they offering?
Find out and make sure your rewards are better and more worthwhile. Give your customers a reason to choose you.
Created in 2015, Starbucks has constantly updated and revamped their program to include new rewards, and offering customers more flexibility and options.
It's easy for a customer to forget about all the reward apps and programs they signed up to. Give your program a good polish every few years, and make sure it's still on your customer's mind.
Or, if you're still into the relationship analogy: if a partner stops putting effort into the relationship, chances are we will forget them soon.
How can you use it? Reward programs can be a great incentive for a customer to choose your shop instead of your competitor's.
Starbucks' coffee is generally premium-priced. However, when offered a reward, customers still choose the more expensive brand.
What are your competitors doing, loyalty-wise? What are they offering?
Find out and make sure your rewards are better and more worthwhile. Give your customers a reason to choose you.
Reward programs also allow you to get your customer better, gathering information that you can later use to personalize content and information to your customers.
Starbucks reminds us that a good marketing strategy is holistic, blending different approaches to connect to customers, driving loyalty.
It's a rewards program, yes, but also a gamification strategy and a method of qualitative research, collecting important insights for sales and marketing and driving more profit at the same time.
Starbucks reminds us that a good marketing strategy is holistic, blending different approaches to connect to customers, driving loyalty.
It's a rewards program, yes, but also a gamification strategy and a method of qualitative research, collecting important insights for sales and marketing and driving more profit at the same time.
Strategy #2: Share Your Customer's Environmental and Social Beliefs (Like Amazon)
Here's the thing about good relationships: we usually want to have things in common.
How wonderful it is to know that *that person* also enjoys that incredibly obscure Russian movie about vampires!
Customers are not that different. When your ecommerce site shares the same beliefs as them, sales increase.
For example: a GWI research found out that:
• 46% of internet users globally want brands to be eco-friendly
• 44% want brands to be socially responsible
• 28% want brands to support charities
How wonderful it is to know that *that person* also enjoys that incredibly obscure Russian movie about vampires!
Customers are not that different. When your ecommerce site shares the same beliefs as them, sales increase.
For example: a GWI research found out that:
• 46% of internet users globally want brands to be eco-friendly
• 44% want brands to be socially responsible
• 28% want brands to support charities
Why does it work? Sharing is caring, isn't it?
Being socially responsible, eco-friendly, and supporting charities should be obvious, but many brands don't do that.
And more than ever, customers want to support shops that also support good causes.
It works because it shows your customers that you're doing some good in this world. It means that their money is helping a specific charity, a responsible or eco-friendly brand.And when they know their shopping is doing good, they are willing to shop some more.
Just make sure to be genuine. If there's a thing customers don't like, it's greenwashing.
Being socially responsible, eco-friendly, and supporting charities should be obvious, but many brands don't do that.
And more than ever, customers want to support shops that also support good causes.
It works because it shows your customers that you're doing some good in this world. It means that their money is helping a specific charity, a responsible or eco-friendly brand.And when they know their shopping is doing good, they are willing to shop some more.
Just make sure to be genuine. If there's a thing customers don't like, it's greenwashing.
Example: AmazonSmile
If you want your online store to drive customer loyalty through environmental beliefs and charity work, learn from the biggest there is: Amazon.
What is it? You shop. Amazon gives. Experience feel-good shopping.
If customers ever felt guilty for shopping on Amazon, their AmazonSmile program put an end to that.
This simple program allows Amazon and customers to:
• Donate 0.5% of eligible purchases to a customers' charity of choice (and there are over 1 million charities to choose from)
• Donate products directly to charities through AmazonSmile's charity lists
• Read the stories about the charities they are supporting, and where they money was invested
It gives customers a chance to be part of something bigger, and support causes they believe in.
If you have to shop, might as well shop for something that helps more than one person, right?
If you want your online store to drive customer loyalty through environmental beliefs and charity work, learn from the biggest there is: Amazon.
What is it? You shop. Amazon gives. Experience feel-good shopping.
If customers ever felt guilty for shopping on Amazon, their AmazonSmile program put an end to that.
This simple program allows Amazon and customers to:
• Donate 0.5% of eligible purchases to a customers' charity of choice (and there are over 1 million charities to choose from)
• Donate products directly to charities through AmazonSmile's charity lists
• Read the stories about the charities they are supporting, and where they money was invested
It gives customers a chance to be part of something bigger, and support causes they believe in.
If you have to shop, might as well shop for something that helps more than one person, right?
How can you use it? What are eco-friendly programs, or charities that you can link your business to?
Tip: you don't have to think that big. Instead of having 1 million charities to choose from, pick something local.
Or, depending on the products you sell, offer to recycle them for your customers, simply allowing them to send it back to you. Can you offer refills, for example?
One of the big lessons from AmazonSmile is that storytelling is just as important as doing good. Show your customers where their money is going.
Tell them how much they are helping you to do good, and they'll shop with you again and again.
(And hopefully, tell their friends about you, too.)
Tip: you don't have to think that big. Instead of having 1 million charities to choose from, pick something local.
Or, depending on the products you sell, offer to recycle them for your customers, simply allowing them to send it back to you. Can you offer refills, for example?
One of the big lessons from AmazonSmile is that storytelling is just as important as doing good. Show your customers where their money is going.
Tell them how much they are helping you to do good, and they'll shop with you again and again.
(And hopefully, tell their friends about you, too.)
Strategy #3: Build a Community Around Your Brand or Product (aka the Polaroid fans) and Offer Great Customer Service
Whether with physical events or online platforms, building a community boosts trust and connection with customers.
Not only can customers interact with other fans of your business, but also share stories and ask questions directly.
Why does it work? Communities make people heard, and invite the community to collaborate, share, and participate in the business.
When you build a strong community around your brand, you let customers approach you and create a trusting, transparent relationship.
Not only can customers interact with other fans of your business, but also share stories and ask questions directly.
Why does it work? Communities make people heard, and invite the community to collaborate, share, and participate in the business.
When you build a strong community around your brand, you let customers approach you and create a trusting, transparent relationship.
Example: Polaroid Originals Community
Before Polaroid made its official comeback, there was The Impossible Project. (And Polaroid Originals in between.)
What is it? The Impossible Project – a company completely distinct from Polaroid – had bought the last remaining Polaroid film factory, and set up the ambitious task of bringing it back to life.
It was difficult, and their first attempts were almost ridiculous. (It turns out that making instant film from scratch is extremely complex.)
They weren't listening to the fans and brand supporters.That changed in 2014, when the brand decided to rethink their communication, creating one of most engaged, creative, and dedicated online communities a brand could possibly dream of.
They were listening to the good, the bad, and the ugly. They were replying to every comment, and liking every single post shared on Facebook and Instagram.
The early supporters were known as the Pioneers, and famously got to test batches of new film before they hit the shelves. The community was thriving.
They were open and honest about the complexity of the R&D department, and about their struggles to make the film that the community dreamed of.
When they finally became Polaroid Originals, in 2017, that community had tripled, and more and more people were excited about what was happening with instant film.
Before Polaroid made its official comeback, there was The Impossible Project. (And Polaroid Originals in between.)
What is it? The Impossible Project – a company completely distinct from Polaroid – had bought the last remaining Polaroid film factory, and set up the ambitious task of bringing it back to life.
It was difficult, and their first attempts were almost ridiculous. (It turns out that making instant film from scratch is extremely complex.)
They weren't listening to the fans and brand supporters.That changed in 2014, when the brand decided to rethink their communication, creating one of most engaged, creative, and dedicated online communities a brand could possibly dream of.
They were listening to the good, the bad, and the ugly. They were replying to every comment, and liking every single post shared on Facebook and Instagram.
The early supporters were known as the Pioneers, and famously got to test batches of new film before they hit the shelves. The community was thriving.
They were open and honest about the complexity of the R&D department, and about their struggles to make the film that the community dreamed of.
When they finally became Polaroid Originals, in 2017, that community had tripled, and more and more people were excited about what was happening with instant film.
How can you use it? Start a conversation with your customers, wherever they are. Share what they post about you on social media, and interact with them as well. Comment, answer messages, and listen to all opinions (even when they hurt).
A customer is your friend, and you wouldn't ghost a friend, would you?
Depending on your product, you can also invite loyal customers to an exclusive community. But keep it engaging and active, so it stays fresh on your customer's mind.
Be it a Facebook group, a secret Whatsapp group with the newest product drops, or a more advanced social media platform created for your business only. Offer discounts or other rewards to the customers who are the most active, for example, or even exclusive products.
Asking your customers for feedback, admit mistakes and address their questions. What are your customers saying about you online?
Depending on what kind of product you offer, you can also create in-person events such as meet-ups, trials, and more.
A customer is your friend, and you wouldn't ghost a friend, would you?
Depending on your product, you can also invite loyal customers to an exclusive community. But keep it engaging and active, so it stays fresh on your customer's mind.
Be it a Facebook group, a secret Whatsapp group with the newest product drops, or a more advanced social media platform created for your business only. Offer discounts or other rewards to the customers who are the most active, for example, or even exclusive products.
Asking your customers for feedback, admit mistakes and address their questions. What are your customers saying about you online?
Depending on what kind of product you offer, you can also create in-person events such as meet-ups, trials, and more.
Strategy #4: Use Personalization to Drive Customer Loyalty (easyJet's Personalized Campaigns)
Personalization is a strong marketing strategy, and amongst its many results, customer loyalty is one of them.
Everyone loves special treatment.
Amazon Prime shoppers spend 133% more per year, and Nike+ members shop 3x more than non-members. Loyalty programs can generate 12–18% more revenue per year.
And that's also because they depend on personalization.
Why does it work? Our brain loves rewards. It makes us feel special and loved. It gives some sort of approval that we'd been lacking, somehow.
Everyone loves special treatment.
Amazon Prime shoppers spend 133% more per year, and Nike+ members shop 3x more than non-members. Loyalty programs can generate 12–18% more revenue per year.
And that's also because they depend on personalization.
Why does it work? Our brain loves rewards. It makes us feel special and loved. It gives some sort of approval that we'd been lacking, somehow.
There's so much space for shops to improve on: only 25% of customers were happy with the personalization level they find in brands.
On the other hand, there's so much to benefit from too:
• Personalized offers make customers 8x more likely to use them
• When personalization is done well, there’s a 6.4x lift in satisfaction
• It drives brand loyalty and encourages more shopping
Example: easyJet and the Personalized DestinationseasyJet is a leader when it comes to customer loyalty. In 2018 (H1), 75% of its seats were booked by returning customers. That means 63 million passengers.
And you don't have to sell low-fare flights to learn their lessons on customer loyalty and personalization.
On the other hand, there's so much to benefit from too:
• Personalized offers make customers 8x more likely to use them
• When personalization is done well, there’s a 6.4x lift in satisfaction
• It drives brand loyalty and encourages more shopping
Example: easyJet and the Personalized DestinationseasyJet is a leader when it comes to customer loyalty. In 2018 (H1), 75% of its seats were booked by returning customers. That means 63 million passengers.
And you don't have to sell low-fare flights to learn their lessons on customer loyalty and personalization.
What is it? easyJet's website offers a personalized end-to-end experience. Both content and commerce are tailored to the user's history.
The messaging and funnels are also personalized to each customer. The end-user is not always aware of that, but it delivers a smooth shopping experience.
But easyJet doesn't stop there.
To celebrate their 20th anniversary, the brand sent incredibly customized emails to their customers, telling a personal (and emotional) story to each one of them.
The result was a beautiful email marketing campaign that profiled all the destinations that customers had been, and suggested more relevant destinations.
They compared the travelled distances with the length of the Nile, for example, of the distance to the moon.
Not only do they make each visit to their website unique, but they also tell the story of each individual customer with attention and emotion.
How can you use it? You can start simple with purchase history, for example, and recommend the best products for them. Send customized newsletters that mark a special date like birthdays – and why not include a discount doce as a reward too?
Personalization can also be as simple as writing their name on a special tag or including a personalised note when you ship their order.
As customers, we treat brands and businesses like real people.
And we always like people more when they are thoughtful, attentive, and caring. Make sure that's how your shop is acting.
The messaging and funnels are also personalized to each customer. The end-user is not always aware of that, but it delivers a smooth shopping experience.
But easyJet doesn't stop there.
To celebrate their 20th anniversary, the brand sent incredibly customized emails to their customers, telling a personal (and emotional) story to each one of them.
The result was a beautiful email marketing campaign that profiled all the destinations that customers had been, and suggested more relevant destinations.
They compared the travelled distances with the length of the Nile, for example, of the distance to the moon.
Not only do they make each visit to their website unique, but they also tell the story of each individual customer with attention and emotion.
How can you use it? You can start simple with purchase history, for example, and recommend the best products for them. Send customized newsletters that mark a special date like birthdays – and why not include a discount doce as a reward too?
Personalization can also be as simple as writing their name on a special tag or including a personalised note when you ship their order.
As customers, we treat brands and businesses like real people.
And we always like people more when they are thoughtful, attentive, and caring. Make sure that's how your shop is acting.
Customer Loyalty Strategies: The Key Takeaways
We hope this article's helped you understand how customer loyalty can drive long-term growth and unmatched profitability.
Here are the main points to remember:
• Study your highest profitable customers – that is, your top 20% income generators.
• Increasing customer loyalty to at least 5% can increase your profits up to 95%.
• Don't ignore the power of personalization.
• Word-of-mouth is a marketing strategy you can't miss out on.
• It's OK to mix and match strategies to create a holistic customer loyalty strategy.
Is your store ready to increase its profitability and drive customer loyalty? Check out these examples to inspire your business to take action towards it.
Here are the main points to remember:
• Study your highest profitable customers – that is, your top 20% income generators.
• Increasing customer loyalty to at least 5% can increase your profits up to 95%.
• Don't ignore the power of personalization.
• Word-of-mouth is a marketing strategy you can't miss out on.
• It's OK to mix and match strategies to create a holistic customer loyalty strategy.
Is your store ready to increase its profitability and drive customer loyalty? Check out these examples to inspire your business to take action towards it.