Loyal customers often make the loudest spokespeople for your brand, with proven savings to marketing budgets. After all, it’s more cost effective to retain customers than to recruit new ones. Customer loyalty is an important consideration for any brand strategy, but understanding the different characteristics of loyalty is key to keeping those customers engaged.
There is no one-size-fits-all solution. Loyalty can only be built through trust, and trust can’t be bought — cultivating customers takes time. Recognizing the root of what keeps your customers coming back is the core component to developing an effective retention strategy. Here are five main types of loyal customers, and what marketers can do to keep them that way.
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1. Loyal to the Price
Price is always a factor in a customer’s decision making process. For many, competitive pricing is the main reason they’ll keep coming back. This type of loyal customer is earned through a consistently competitive price point compared to the competition. Brands find this pricing sweet spot by conducting a competitive price analysis. According to Competera, the steps to implementing a competitive price analysis are as follows:
- Determine the quality of the data. Only accurate data will reveal meaningful insights, so this is a crucial first step.
- Define the data parameters. Which factors will you consider in your competitive analysis? Review competitors’ price indexes, recent promotions, and general product availability.
- Organize your competitors into primary, secondary, and tertiary categories to enhance your focus.
- Use machine learning and automation to model pricing. These tools improve accuracy and process data at a much more efficient rate.
2. Loyal to the Product
You believe in your product — so let it sell itself! Many customers stay loyal because they value what you are selling, regardless of the price point. Your product will build loyalty by consistently meeting the needs and expectations of the customer. Brands can achieve this by keeping an open dialogue with their customer base and paying close attention to quality control and customer feedback. One strategy is to conduct a customer focus group to gather feedback right from the source. Before launching into this process, be sure to do the following:
- Select market-representative participants. Use screening questions to determine their current level of engagement with your product or service.
- Lead the session like a discussion, not a roll call of question and answer.
- Avoid leading questions. Ask follow-up questions for clarity, but do not lead the participant to an inauthentic answer.
3. Loyal to Benefits & Rewards
How does your brand demonstrate that it values its customers? Some customers remain dedicated to a brand simply because it offers stellar rewards, perks, or other benefits. This type of customer loyalty is earned by making the customer feel valued through creative and constantly improving incentives. Though promotional marketing is a time-tested strategy, personalization is the key to building loyalty in the modern age. Slisha Kankariya, CMO of With Clarity, sums this up nicely:
“Personalized outreach via email, social media remarketing, and having a dedicated representative are the best ways to keep customers coming back. [Make sure you’re] constantly reminding customers of the great service and products as well.”
Curating direct, personalized outreach campaigns to the customer is an emerging method to create incentives and effectively retain customers. Fortunately, the modern marketer has a full suite of tools at their disposal for structuring effective incentive programs.
4. Loyal to the Customer Service
Often, what customers seek is beyond just the product. Customer service is key to meeting customers’ needs and expectations. Cultivating a strong customer service model can help build a trust and satisfaction that will keep customers coming back. Trust is an emotional response to the satisfaction customers receive by having their needs and expectations met by your company.
One way to focus your customer service is through an empathy model. This type of customer-centric paradigm empowers staff to better serve customers by teaching them to place themselves in the customer’s shoes – rather than just sticking to a script. Your CS model should encourage staff to build these relationships. Customers must be able to rely on a great experience every time they engage with your company.
5. Loyal to Data Security
Loyalty is largely based on trust, and customers are understandably cautious about entrusting their personal information online. Today, companies collect more and more customer data for marketing and analytics. As a result, data security is becoming a key driver in customer decisions. If your brand requests customer information on a regular basis, it’s essential to implement strong data security practices.
Planning out your company’s data collection policies and data security practices will ensure compliance with federal regulations – and by extension, your brand will be perceived as trustworthy. Some companies are going so far as to hand over the keys to personal data to the customers themselves. Putting control in the hands of the customer enables brands to collect data transparently and build trust. Not only will customers feel more comfortable providing their information, they will continue to stay as customers because they know their personal information is secure.
Brands ought to leverage the above tactics in tandem to drive their customer loyalty strategies. While competitive pricing may be important to some, others will zero in on their customer service interaction or tally up their rewards. Each type of loyal customer is different, so marketers need to take a personalized approach to making them stay that way.