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How do you make customers loyal and increase retention? 

By Arno Liesse

How do you make customers loyal and increase retention? 

By now, you’re likely familiar with BeBold’s unique approach to marketing, which is based on the inbound marketing model. We previously discussed the inbound marketing model in the first article of our series.

We then covered lead generation and lead nurturing in our subsequent pieces. Now, we’re delving into customer loyalty and retention programs!  

In this article, we will explore what customer loyalty really means. Is it the same across all markets and for all customers? And what exactly can you expect from a customer loyalty program? Keep reading to find out! 

Customer loyalty and customer retention 

What is customer loyalty? 

You may have heard that customer loyalty is all about influencing attitudes through loyalty and affinity programs. But recent research by the University of New South Wales and London Business School tells a different story.  

In markets where customers frequently interact with brands, loyalty is less about actively choosing a brand and more about passive acceptance of it. In other words, customers may not have strong beliefs about a brand, but they will continue to purchase from it simply because it’s familiar. 

What can you hope to achieve with your program? 

Customer loyalty is key to building a successful brand. There are two main objectives to focus on when it comes to loyalty: increasing sales revenue and fostering a stronger relationship between your customers and your brand. Achieving the latter can also help you achieve the former.  

But the strategy you choose will depend heavily on your product and market. Niche products may rely on lifelong fans, while interchangeable products may appeal more to price-sensitive shoppers. Most products and services, however, fall somewhere in between.  

In this blog, we’ll hone in on the repeat-purchase market, where there is fierce competition between branded products and gaining customer loyalty is no easy feat. Are you ready to learn more? Let’s dive in! 

Marketing is H2H 

How your therapist would look at your relationship 

When it comes to increasing sales revenue and building stronger customer relationships, there are two approaches to consider.  

The first one is the “attitude approach,” which aims to boost brand beliefs and create an unbreakable bond between customer and brand. Think of it as the fairy tale romance that we all aspire to. It’s the most common philosophy in marketing and CRM, and for good reason.  

The second approach is the “behavioral focus,” which assumes that customers have divided loyalties to several frequently purchased brands. This means that intrusive advertising is viewed more as an annoyance than a fundamental driver of behavior and attitudes towards brands. As inbound marketers, we prefer relevant, targeted, and timely content that takes the time to get to know our audience properly.  

But there’s also a third approach, the “contingency approach,” which takes a more direct approach by using price promotions, deals, and special offers to attract customers of competitor brands. For brands in these types of markets, responding directly to competitors’ programs can offer more return than focusing intently on brand-building programs.  

Knowing yourself only increases your chances of success

In a highly competitive market with similar products and comparable marketing budgets, choosing the right approach is essential. In most markets, repeat purchases and intense competition are the norm. This means that the second model, the behavioral focus model, is the way to go.  

Let’s face it, people don’t want to be limited to just one streaming service, one takeaway restaurant, or one bottle of wine for the rest of their lives. Do you? That’s why we have to steer clear of relationship metaphors, as it’s not quite the same level of involvement. Some brands try to position themselves at this level, but few succeed.  

That’s where “customer brand acceptance” comes in, which is the standard way of building customer loyalty in a typical market. We accept multiple brands in our lives because, really, aren’t they all virtually the same? And don’t they all tell more or less the same story? 

Don’t despair just yet, my friend. Realizing that customers have divided loyalties actually helps you focus on what really matters in building a relationship with them. Studies have shown that when people have easy access to different brands, their satisfaction with previous interactions becomes the primary factor driving their behavior. It’s only in exceptional and unexpected moments that customers’ actual brand choices are influenced. 

 This is where inbound marketers can make a difference. By focusing on delivering exceptional experiences and offering what customers need when they need it, we can build strong relationships with them. And when the time is right, we can offer them something truly extraordinary. 

What can customer loyalty and retention programs actually do for you? 

1. Reinforce brand equity to boost brand acceptance

You want to keep your customers coming back for more? Then it’s time to roll out the loyalty program and show them some love! By tapping into existing levels of customer brand acceptance, you can build on those connections and turn one-time buyers into loyal fans. But don’t get too carried away with the rewards – your customers might start to fall in love with the offer instead of your brand. To avoid this, always stay true to your brand’s voice and values. Authenticity is key! 

2. Get into the customers’ portfolio of acceptable brands 

In the dating world, we know that repeated positive interactions can help sway a potential partner over to your side and keep them interested. It’s the same in the business world, where the aim of your loyalty program is to improve the accessibility and top-of-mind awareness of your brand. This will give you more chances to interact with customers and, hopefully, more sales opportunities. Your program should position your brand as one of the possible acceptable choices in your customer’s collection of brands. Once you’ve achieved this, you can start the courting process and work towards building a stronger, long-term relationship with your customers. 

Taking the leap 

In summary, it’s essential to understand the meaning of loyalty in your specific market to determine the approach that suits you best. Building the brand, offering competitive deals, or driving brand acceptance, loyalty programs have a variety of ways to cultivate the relationships you want. A practical approach to the market is crucial to implement effective customer loyalty programs.  

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