Customer loyalty is more important than ever in today’s competitive business landscape. With consumers having endless options, companies must work hard to earn and retain loyal customers who will continue purchasing their products or services. According to a 2022 report by Deloitte, 80% of consumers say customer loyalty programs influence their purchasing decisions. This indicates that loyalty initiatives can significantly impact a company’s bottom line.
In 2023, there are several key ways companies are striving to boost customer loyalty:
Loyalty programs that provide meaningful rewards and benefits are essential for brands wanting to increase customer retention. For example, Starbucks Rewards members earn points (“stars”) with each purchase that can be redeemed for free drinks, pastries, or cake for 100 stars. Sephora’s Beauty Insider program has tiers that unlock birthday gifts, free samples, and early access to sales. Similarly, online casinos launch special promotions https://www.bestuscasinos.org/bonuses/no-deposit/ for their loyal and frequent members. These VIP rewards allow gamblers to use bonuses without deposit limits. Players can earn free spins, bonus cash, free bets, or credits to wager on a game of choice. They can begin a gaming session without building a bankroll using a dedicated No Deposit Bonus.
These programs incentivize customers to spend more to earn greater rewards. In 2023, more companies are developing tiered programs that offer differentiated benefits and VIP treatment to hook the most loyal devotees.
High Levels Of Personalization
91% of customers are more likely to shop with brands that recognize and provide relevant recommendations, per a 2022 SmarterHQ report. Brands use data analytics, AI, and machine learning to deliver personalized engagement. For example, Starbucks app users receive customized product suggestions and location-based offers.
Fashion retailer Stitch Fix applies algorithms to its users’ style profiles and purchase histories to curate individualized boxes of clothing. The more a brand can tailor communications and recommendations around each customer, the stronger the loyalty they can build.
Optimising Mobile Experiences
Mobile apps that are intuitive, seamless, and integrated with loyalty programs incentivize customers to use the brand’s app over competitors. Starbucks Mobile Order & Pay allows customers to order ahead, pay, earn rewards, and get personalized deals.
Retailers like Target and Walgreens simplify shopping, scanning items in-store, refilling prescriptions, and more via mobile apps. Providing an excellent mobile experience where customers manage their loyalty benefits keeps the brand top-of-mind.
Focusing on Value
Today’s consumers are more value-conscious, scrutinizing their spending, especially amid inflation and economic uncertainty. Brands respond by providing greater value through loyalty programs, discounts, bundles, free shipping, and more.
For example, Amazon Prime members get free two-day shipping on over 100 million items and streaming entertainment benefits. Walgreens offers cash rewards that members can apply to future purchases and free shipping with no order minimums.
Bettering Customer Service
Stellar customer service boosts satisfaction and loyalty. To deliver better service, brands simplify contact options, reduce wait times, and leverage technology like chatbots and AI. For example, Starbucks customers can use mobile ordering, drive-thru pickup, in-store, curbside or delivery.
Options like virtual agents and 24/7 call centers make it easier to resolve issues quickly. Training staff on hospitality and de-escalation establishes positive brand interactions. Going above and beyond on service quality enhances the customer experience.
Offering Flexible Options
Today’s consumer expects flexibility in how, when, and where they purchase. Curbside pickup rose by 88% in 2019, according to Adobe Analytics. Brands accommodating varied customer preferences by offering BOPIS (buy online, pickup in-store), curbside, delivery, subscription, self-service, and other omnichannel options provide greater convenience.
Athleisure brand Lululemon recently launched same-day delivery to compete with fast fashion for orders submitted within 12 p.m. CET. Pet supplies retailer Chewy provides 24/7 customer service and auto-shipping subscriptions of pet food and medications. Flexible fulfillment and purchasing reinforce loyalty.
Facilitating Social Connection
Consumers increasingly expect brands to facilitate social connections and communities. This is evident in the rise of brand-specific Facebook groups and influencer collaborations. For example, DTC brands like FIGS and Fabletics nurture community engagement on social media. Retailers host in-store events and classes to foster community building. Brands that successfully link customers with shared interests, identities, values, and passions help drive meaningful loyalty beyond transactions.
Building Direct Relationships
Some brands are pivoting from relying on third-party retailers to selling directly to consumers. By owning the entire customer experience end-to-end, brands can offer personalized service and strengthen loyalty.
For example, the athletic footwear brand On Running turned to direct-to-consumer stores to complement sales through wholesalers. Casper and other digitally native brands built awareness online and opened physical stores to allow customers to test products.
Beauty brand Glossier and apparel brand Everlane have remained direct-to-consumer from their inception. Building direct relationships with shoppers allows for greater customer data collection and feedback while avoiding competing against third parties selling the same products at discounts. Though the DTC model involves greater upfront investment, brands deepen engagement and loyalty when they own the customer relationship.
Launching Loyalty Apps
Dedicated loyalty apps provide a one-stop shop for customers to access rewards, coupons, exclusive content, and more. App notifications keep the brand top of mind while enabling seamless purchases and fulfillment. Brands launching or improving loyalty apps include Lululemon, Sephora, Urban Outfitters, and Cracker Barrel.
While apps require an initial download and adoption hurdle, they present tremendous opportunities to boost engagement once customers start actively using them. Seamless app experiences deliver convenience that substitutes can’t match.
Focusing on Sustainability
A 2021 study by Capgemini found that 79% of consumers said sustainability is more important to them now than before the pandemic. Brands are responding by highlighting sustainability efforts like using recycled materials, committing to reduce emissions, and supporting ethical manufacturing.
For example, luxury fashion brand Stella McCartney is well-known for its animal-friendly, leather-free designs. Outdoor retailer Patagonia openly discusses its supply chain and asks customers to buy only what they need. Brands that back up sustainability claims with transparent action earn loyalty from eco-conscious consumers.
Even small steps like avoiding excess packaging materials demonstrate alignment with customers’ values around social responsibility and environmentalism.
Earning customer loyalty requires a holistic approach encompassing loyalty programs, personalization, superior service, and convenience. While implementing all initiatives may not be feasible for every company, analyzing customer data and focusing on the key drivers of loyalty for their target audience is the path to success.
The brands that win customer loyalty make customers’ lives markedly easier, more enjoyable, and more fulfilling through digital and real-world experiences. While fostering loyalty takes ongoing effort, the long-term profits generated by having a stable base of devoted customers make the work well worth it.