Increasing customer retention rates by just 5% can raise profits by between 25% and 95% but not all businesses are sure what methods to incorporate into their marketing to see that return.
You frequent the same restaurants, swipe your store rewards card at the grocery store, shop online for exclusive discounts, and visit your local coffee shop to order that free latte you’ve been waiting to redeem.
These are all forms of loyalty marketing that reward customers for their regular patronage at different establishments and boost customer retention. Consumers are more willing to sign up for rewards or even shop at specific stores that offer some form of incentive.
What is Loyalty Marketing?
Loyalty marketing is a strategic marketing approach that uses incentives like rewards and discounts to acquire and retain customers. It encourages customers to make repeat purchases with your company and often leads them to recommending your company over competitors.
Marketers use strategies that incentivize repeat purchases to build customer loyalty and trust. By building loyalty through rewards programs, you can see an increase in profits, more engagement on social media platforms, and strengthen relationships with current customers.
In addition, loyalty programs can encourage customers to write reviews, send referrals to friends and family, and share your business on social media.
It’s important to remember that outstanding support and service go a long way with customer retention. 77% of customers are more loyal to companies that provide a good customer experience when issues arise. As a result of good service, 78% of customers are willing to do business with a company after a mistake as long as customer service is excellent.
Here are four strategies to boost customer retention.
Show Your Gratitude
There is a lot of competition out there, so you need to differentiate your company from the rest. One way is showing appreciation to long-time customers. There are several approaches you can take to show gratitude, but one of the simplest is handwritten notes or holiday cards that offer a personal touch. If you rather go the digital route, that’s okay too! Just remember to personalize it for the individual customer. To extend thanks, you can include a discount on their next purchase.
Other approaches include featuring customers on social media, implementing customer feedback, and just saying ‘thank you’ to them directly through personalized emails or automated messages.
Use Gamification to Keep Customers Invested
Gamification incorporates common game elements such as levelling up, point systems, challenges, progression tracking, and rewards into marketing campaigns to motivate customers and drive conversions.
It makes activities on platforms feel like they are games and enhances the user experience as well as participation.
Common examples of gamification include streaks for completed daily lessons, points for money saved, a progress bar for profile completion, rewards for frequent purchases, and leader boards for performance or engagement.
Humanize Customer Service
The human touch remains essential in business. After all, customers are people first and foremost. Customers feel like brands lack transparency and authenticity, so it’s no surprise that they are sceptical and less trusting, which is why humanizing the customer experience needs to be prioritized.
People define the customer experience, especially when it comes to supporting roles. To differentiate your business and customer service from others, you need to consider your customers at every step.
You should emphasize being direct and empathetic when addressing issues that arise. Customers want clear information and a resolution when they contact your business.
Offer Incentives Before Cancellations
Think of free trials or introductory pricing that’s set to expire. You plan to cancel ahead of time so you aren’t charged again but often find an offer you can’t refuse before you confirm cancellation. We’ve all been there.
If your business offers memberships or subscriptions, providing incentives before a customer terminates their account may mitigate it before it happens.
Options can vary depending on your business, but pause features, switching products, discounts, and offering two free months are all incentives that create a call-to-action and encourage customers to remain subscribed.
When a customer is in the process of cancelling their membership or subscription, it is a great time to present them with the option to detail why they are cancelling. You can list pre-written options that can be selected, but providing an optional field for written responses may give greater insight into areas of your business that could improve customer satisfaction and retention.
If you are looking to reinvent your customer experience, contact our marketing team to talk about how we can bring innovative strategies to your digital marketing efforts, so you start seeing results.