7 Loyalty Marketing Strategies to Keep Customers Coming Back

For most brands, the dream is a consistent, active customer base that makes regular purchases for years or decades. After all, repeat customers convert 9x more than new customers, so keeping this group happy can significantly increase your bottom line.

But how can you motivate customers to keep coming back again and again? The key is to invest in loyalty marketing strategies that engage current customers. Let’s take a look at why retention matters and how you can maintain long-term customer loyalty.

What is Loyalty Marketing and Why is it Important?

Loyalty marketing is the process of nurturing your existing customer base to drive repeat purchases and retention. While acquisition focuses on bringing new customers into the fold, this strategy prioritizes keeping current customers satisfied, engaged, and coming back for more.

Both customer acquisition and retention are critical elements of any good marketing program, but don’t overlook retention, as it’s a cost-efficient way of earning business. Since you’re working with customers who already know about your brand, retaining an existing customer can cost 5x less than acquiring a new one.

And nurturing current customers can bring in big rewards: just a 5% increase in customer loyalty retention can boost your bottom line by up to 95%, and satisfied customers are 87% more likely to buy upgrades or additional products or services. As such, brand loyalty marketing is a worthwhile investment for any company.

What is Customer Loyalty?

Customer loyalty isn’t just about who purchases more than once; it’s about long-term commitment. A customer who is truly loyal to your brand will:

• Consistently Choose Your Brand Over Competitors. Obviously, repeat purchases are a big signal of loyalty. Once you earn a customer’s support, you can count on them to return to your brand whenever they need your product or service.
• Engage with Your Brand. Loyal customers are more likely to interact with your brand, whether that means commenting on social media posts, filling out surveys, or subscribing to your newsletter.
• Share Your Brand with Others. Happy customers can become brand advocates, telling others about your brand and generating word-of-mouth buzz—for free!

Consider what happened to performance nutrition brand Gainful. Their student discount program led Kaylyn, a grad student, to try the brand’s personalized nutritional products. Kaylyn fell in love with their products. Now, she vocally supports the brand, encourages others to try it, and plans to continue her subscription even after she graduates and no longer qualifies for their student discount. As Kaylyn put it, “if there comes a time where I’m not using it anymore, someone should probably check on me.”

That’s the kind of consumer loyalty you can see if you implement the right strategies.

7 Loyalty Marketing Strategies to Try

The key to any loyalty marketing strategy is making your customers feel genuinely valued. Here are some effective methods to incorporate into your customer loyalty program:

Gather Customer Feedback

Want a surefire way to give your customers what they want? Ask them. Surveys allow you to refine your offerings and marketing strategies according to the thoughts of actual customers. Not only will customers be glad to see their concerns addressed, but incorporating their feedback makes people feel valued and appreciated.

At the start of the 2020 pandemic, shoe company Rothy’s surveyed its social media followers to see how they could help. Most customers wanted to see them make masks, so Rothy’s donated 100,000 masks and listed them on their site for purchase. They also offered discounts to groups affected by the pandemic, including first responders, medical workers, and teachers.

Create a Loyalty Program

Loyalty programs in marketing do a great job of engaging customers and giving them a reason to continue buying from your brand. These programs give frequent customers rewards such as discounts, free merchandise, or early access to new products. Additionally, when you give customers the option to sign up for a loyalty program, it shows that you value them and want to build a relationship that goes beyond a single purchase.

Personalize Content and Product Recommendations

Personalized marketing is a must in this day and age. That’s why 85% of marketers say that using consumer-provided data to build personalized experiences is important, and 65% of consumers are willing to share their personal data to get more tailored offerings. To provide the personalized experience customers crave, you can ask a few questions in order to serve up targeted product recommendations or content. For example, Gainful features a quiz that asks about current fitness habits, diet, and nutrition goals. Based on your answers, it recommends a custom nutrition system, taking the guesswork out of shopping.

Build a Referral Program

Encourage sharing even more by inviting current customers to tell friends and family about your brand in exchange for a discount or other reward. For example, Rothy’s refer-a-friend program gives customers $20 when they refer a friend while also offering that friend $20 off their first order.

In addition to formal refer-a-friend programs, you can take advantage of informal word-of-mouth recommendations through identity marketing. Identity marketing is geared towards a specific consumer community, like teachers or military members, often by personalizing deals and communications for them. These communities often tell others about these discounts; over 90% of military members, teachers, and students would share an offer with their peers.

Use Zero-Party Data for Re-Engagement

Zero-party data is data that a consumer willingly provides in exchange for something of value, such as a discount. It’s considered the highest quality data available because it comes directly from the customer and is inherently high intent. And once you collect zero-party data, you have a goldmine of information you can use to guide continual re-engagement efforts.

Since customers willingly hand over zero-party data, it’s a privacy-friendly way to get information. This is critical in the current environment, where consumers are more concerned about privacy than ever and restrictions are limiting the use of third-party cookies. Over 70% of consumers say they would stop doing business with a company that gives away their private information. By prioritizing privacy-friendly forms of data collection, you build trust with your customer base.

Extend Exclusive Offers

Offering a discount is the perfect way to engage customers while also gathering zero-party data. Identity-based discounts geared to a specific consumer community–such as healthcare workers or teachers–make customers feel particularly valued since you are recognizing an attribute that is important to their identity. For example, 66% of military members feel valued when a brand offers exclusive military discounts. This creates an emotional connection that stokes loyalty. And when you require customers to verify their identity to get the discount, you protect against fraud and gather zero-party data that can be used to offer more personalized experiences.

This approach has paid off for many brands. Consider these customer loyalty program examples:

• Shady Rays’s military discount program increased revenue and engagement by 5x.
• NFL Sunday Ticket’s student program drove a 75% renewal rate.
• Michael’s combined personalized offers and a loyalty program to verify 200k customers.

Loyalty marketing companies like SheerID can help you build these targeted discounts and establish fast, seamless identification verification.

Celebrate with Special Rewards

In addition to more regular discounts, you can offer special rewards throughout the year or at relevant times. One tactic is running an identity marketing sweepstakes contest. When you limit the contest to a certain consumer community, such as healthcare workers, people will be more excited to enter since the odds are better. Mattress brand Purple ran a Heroes Week sweepstakes that resulted in a conversion rate 12x higher than prior sweepstake conversion rates.

Alternatively, you can launch special discounts during certain times of the year, such as back-to-school or Military Appreciation Month. Refurbished electronics brand Back Market started out with back-to-school promotions and then expanded into campaigns focused on graduation and US holidays. In 2021, their back-to-school campaign increased student orders 5x.

How to Measure the Success of a Loyalty Program

There are several metrics you can use to judge whether your loyalty marketing strategy is effectively retaining customers, including:

• Net Promoter Score: The Net Promoter Score (NPS) measures customer satisfaction by asking customers to give your company a score between 0 and 10. The higher the number, the more satisfied your customers are and the more likely they are to recommend your brand to others.
• Referral Rate: You can find this metric by taking the number of referrals and dividing it by the total number of purchases. Happy customers are more likely to tell their family and friends about your brand.
• Churn Rate: This is a metric used by subscription services that tells you how many customers you lost during a time period. If your churn rate is high, that’s a telltale sign that you need to rethink your loyalty strategy.
• Repeat Purchase Rate: The repeat purchase rate can be found by dividing the total number of customers for a given period by the number of customers who made a purchase more than once. This gives you a quick look into how many customers are coming back.
• Customer Lifetime Value: Customer Lifetime Value (CLV) is one of the best indicators of customer loyalty. This metric predicts the total worth of a customer over the course of the brand relationship. Your goal should be to increase CLV by keeping customers happy and engaged.

Earn Loyal Customers with Personalized Offers

After considering the different loyalty marketing strategies, it is clear that zero-party data and personalized content for consumer communities resonate with customers. By integrating SheerID’s Identity Marketing Platform into your loyalty marketing strategy, you can take advantage of both of these.

Identity marketing allows you to reach valuable consumer communities—such as healthcare workers, the military, or students—with exclusive offers just for them. These discounts programs are an excellent way to nurture loyalty and show your customers how much you care. See how SheerID’s Verification Platform provides instant identity verification while helping your brand gather zero-party data you can use to continuously engage your customer base.