Let’s face it, the cost of acquiring new customers is rising, and the budgets allocated to doing so are diminishing. In a buttoned-up market where consumers are becoming discerning frugalists, attracting new business is no small task. In fact, simply keeping your existing business has become an increasingly tall order. But as the price tag attached to customer retention is only a fraction of that of new business acquisition, there’s a clear benefit to making brand loyalty your bottom-line booster.
More and more, companies are relying on loyalty and retention programs as a staple in their business-building strategies. Because customer loyalty translates into greater spend for a brand, these types of initiatives are often woven into the fabric of overall marketing plans. But beware, assembling a punch list of perks and points or handing out little plastic cards like candy won’t necessarily garner the long-term loyalty a brand needs to keep customers coming back.
In a recent research survey conducted by SAS and Loyalty 360, the number one priority of customer retention and brand loyalty programs among respondents (executives in B2C and B2B companies from a cross section of industries) was to get customers to spend more (47%). Improving churn (19%) and developing customers into brand evangelists (16%) were a distant second and third. The stats say a lot about how businesses view the role of brand loyalty programs, and this perception may be exactly the reason why the value of programs like these is weakening day by day.
The research shows that greater importance is being placed on eliciting short-term ROI than on building brand ambassadors. With billions of loyalty memberships permeating households nationwide, there is a real desensitization in effect. Rather than making an emotional connection to the brand at hand, consumers are dazzled by bargains, deals and discounts, which makes their loyalty short lived and far from lucrative.
More than ever, it’s imperative to put the brand first. Your brand has something unique to offer, and if you can identify that and make it the focus of your communications, you’re on the way to promoting greater brand loyalty. Just like any successful relationship, fruitful loyalty and retention efforts happen over time, not in the blink of a campaign.
In the end, keeping customers coming back is not about luring them with loot. It’s about making a place for your brand in their hearts. It’s not about “buying” the customer, but knowing the customer’s needs and learning to fulfill them. What does your business stand for? What message does it communicate? These are the elements that will resonate with your target audiences and turn them into not only repeat customers, but also brand champions.