Lessons in Building Loyalty From Retailers

A retail-focused Yes Marketing report finds that building value is more important to increasing long-term loyalty than simply adding something that everyone else has, like free shipping.

It’s useful to think about association membership in terms of retail because many of the industry’s customer-engagement strategies translate, such as those used in loyalty programs.

So  it’s worth noting what the 2019 Customer Lifecycle Report [registration], from Yes Marketing, has to say. The report examines how consumers get pulled into loyalty programs, what they consider good value, and what keeps them coming back. Generally speaking, retailers know what they’re doing: Nearly three-quarters of consumers surveyed said they’re “adequately rewarded” by their favorite retail brands.

One key takeaway: A good acquisition tactic shouldn’t be mistaken for a good loyalty strategy.

“It takes so much more to deliver on the different expectations customers have for retailers at each stage of their journey,” Yes Marketing President Jim Sturm said in a news release. “Smart brands must differentiate between effective acquisition tactics and effective loyalty strategies.”

For example: free shipping. While 40 percent of new consumers consider it important when they’re first buying from a retailer, just 3 percent said it’s important from a loyalty standpoint. The reason? Everyone else does it, so it’s treated as a given.

Likewise, price becomes less a factor when loyalty kicks in. (Though it’s still up there—discounts are one of the biggest factors that make customers feel rewarded, at 39 percent.) Instead, the most important factor is product value and quality, which should be emphasized in messaging to already-on-the-hook consumers.

“Frame it in terms of your customers’ own personal experience with your brand and reassure them they are making the right call,” the report states. “Phrasing like ‘As one of our most loyal customers, you know and love the quality of our products …’ can go a long way in reminding loyal customers why they became loyal in the first place.”

Exclusivity is also powerful. Nearly a quarter of respondents (23 percent) said that early access to new products makes them feel most rewarded, while 18 percent said exclusive promotions and discounts also do the job.

If you’re looking for ways to improve your loyalty approach, the report recommends making sure you know how customers engage with your service or buy things—and if you have questions, ask.

“Don’t be afraid to reach out to them directly to solicit feedback through surveys or focus groups,” the report says. “Ask them what would make them most happy with your company and more importantly, what would keep them around for life.”

(Tetiana Lazunova/iStock/Getty Images Plus)

Ernie Smith

By Ernie Smith

Ernie Smith is a senior editor for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. MORE

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