The Secrets of Creating a Loyal Customer Base

The Secrets of Creating a Loyal Customer Base

Table of Contents

As we’ve said already—probably more than once!—it’s easier to sell to an existing customer than it is to convert a window shopper to a first-time purchaser. That fact is showing up a lot in this book because it’s so important and is a foundational element of lifecycle marketing.

Remember how we started this book with a gardening metaphor? Let’s return just a minute to that object lesson. When planting flowers, you often choose from perennials and annuals. Here’s the main difference:

  • Annuals grow fully during a season, budding and blooming to present beautiful flowers to the world. Then they die. You’ll only get those types of flowers growing again the next season if the ones that grew this season dropped seeds that become new plants.
  • Perennials have roots that survive, even when the plant above appears to die off. The next season, the flowers that grow and bloom in that same place aren’t from seeds and new plants. They’re from that same plant you tended carefully the season before.

When it comes to lifecycle marketing, you want to grow perennials. You want satisfied customers that keep coming back—a loyal base—while also dropping seeds to help bring in new “plants” via word-of-mouth marketing and brand ambassadorship.

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Brand ambassadorship occurs when a customer is so happy with and loyal to your brand that they’re constantly talking about it and pointing people your way. It’s a relationship that can occur organically, but also one you can cultivate. Read on to learn more about brand loyalty and ambassadorship and other ways to create (and benefit from) loyal customers.

Support a Great Customer Experience

The first step in creating loyal customers is to show that you care about them by creating an enjoyable and functional experience.

Customer experience is incredibly important to the success of any business, and certainly critical for an online store. Consumers have hundreds if not thousands of retailers to choose from, so a poor experience can drive them away from your store and into the arms of a competitor. More than half of consumers will leave a brand after a poor experience, and a third will talk about that negative experience with others in person or on the phone. Others say they will leave a negative review online or post on social media about the experience.

So, what makes customers feel valued and ensures they have a good experience? First, make sure your website works well and is easy to use. That helps you convert the window shopper into a customer in the first place. Then, once the person enters the first-time-buyer or repeat-customer part of the lifecycle marketing process, take actions to continue to make them feel valued.

MarketingCharts published data from Ometria in 2019 that indicated some of the best actions for making customers feel valued. Here’s a look at the actions customers ranked in the top five:

  • Promos and perks for loyal customers (i.e., things that aren’t offered to the general public)
  • Ensuring emails and promos are relevant to the consumer (i.e., segmenting your audience so you’re not sending the same general communication to everyone)
  • Follow-up emails after purchases that contain content related to the purchase
  • Asking for feedback after interactions with your company, including customer service calls and purchases
  • Product recommendations that line up with the customer’s individual preferences and purchase activity

The research shows close to or more than 50% of consumers ranked each of these as activities that made them feel valued.

Create and Manage Loyalty Programs That Work for Your Customers

The first item from the list above is “promos and perks that aren’t offered to everyone.” Consumers like to feel special and enjoy getting a first look at products or offers that are slightly exclusive. One of the ways you can do this is by creating and managing a customer loyalty program.

Before we get into some how-to and tips related to loyalty programs, let’s look at a few statistics that make it more obvious how important these programs can be.

  • You’re more likely to sell to customers you already have. Statistically, you have a 60 to 70% higher chance of selling to an existing customer than a new one. That doesn’t mean you shouldn’t chase window shoppers and first-time purchasers—you need a constant influx of new customers to grow. But it does mean you should invest in your current customers too.
  • In fact, if you go by the Pareto Principle, a small section of your existing customers—the loyal customers—will account for a large percentage of your overall sales. The Pareto Principle is a statistical analysis tool that says 80% of the outcomes in a process are dependent on 20% of the inputs. That’s some fancy math verbiage, but in this case, what it means is that around 80% of your sales will come from 20% of your customers. That makes it obvious you need to invest in those loyal customers.

Here’s a step-by-step quick guide to creating a loyalty or rewards program that invests in customer satisfaction and repeat business.

  1. Understand what your loyal customers want. A program that doesn’t serve their needs is useless to everyone. Do they want the first look at new products, discounts for referring people to you, or just a few promo codes that are exclusive to your list?
  2. Name your program. A fun, exclusive-sounding name helps remind people that you value them and entice others to want to join in on the program.
  3. Let people know what the program is about. It’s not about persuading people to buy more—that’s just an enjoyable perk you benefit from. Your program should be about rewarding loyal customers, demonstrating your appreciation, and building customer relationships.
  4. Create rewards structures. Use a variety of rewards. You want to walk a balance between what customers want and need and what your business needs. For example, you might want more reach on social media; you could incentivize your loyal customers to engage with and share your content. Examples of rewards can include exclusive promos, referral content they can share online, or savings based on the number of orders or products they’ve purchased.
  5. Add some non-monetary perks. Build customer loyalty by pulling these repeat customers into the community with you by offering them a chance at more personal engagement. Give them the first look at new products, ask them to participate in exclusive feedback or focus-group polls, or offer a Facebook group or other forum where they can chat with you and each other.
  6. Invite people to join. You might do this in shopping cart processes or follow-up emails.
  7. Stick with the program and don’t leave your customers hanging. You can design whatever loyalty program you want, but make sure it’s one that you can manage well long-term. You may need to keep it simple, especially at first, but it’s better to have less but have it consistently than to do more one time and forget about the entire thing within a few weeks.

Use Email to Forge a Personalized Connection

A program as described above lets you show that you value groups of loyal customers. But you can use email to forge more personal connections and demonstrate value for individual customers. One of the best ways to do this is with birthday emails. Here’s how:

  • Ask for birthdays wherever it makes sense to do so for you and your customers. It might be an optional field along with email in a shopping cart process or a required field for your loyalty program. Pro tip: You don’t need the year for this purpose unless you need to qualify adult recipients for certain products or offers. Otherwise, you can typically go with month and day.
  • Create an automated email campaign for birthdays. Trust us, you don’t want to do this (or any of your email marketing campaigns) manually! It’s tedious and takes a lot of time, which means you’re likely to put it on the back burner and forget these important connections with customers.
  • Send birthday emails a few days before the person’s birthday. You might think you should time these emails to arrive on the day of celebration. But people who are celebrating may not be minding their inboxes. Plus, if you’re providing an offer, you want to give them time to use it on or around their birthday—they might get a gift card or birthday money and decide to spend it with you!
  • Make the email exciting and about the customer. Of course, you’re hoping the birthday email reminds someone to shop with you. But that’s not the primary reason for the email. You’re writing to let the customer know you care and to celebrate their day—don’t make the email completely about you.
  • Do include an offer. It’s a birthday party. You should come bearing gifts. That gift could be a 20% off coupon, a freebie offer, or another great deal for your customer.

Depending on how much you know about your customers, you could do the same thing with anniversaries or other events. Here are just a few times you might consider sending out celebratory emails with offers:

  • On their anniversary with you as a customer. This is great because it shows that you value them so much you celebrate the date you first connected.
  • On family birthdays. Depending on your brand and products, you might include kids’ or spouse’s birthdays as something loyal customers can provide you. Then you can reward the entire family with birthday offers.
  • Holidays or other special events. If you sell things people might need for going back to school, for example, send your loyal customers with kids a special offer in August. And, depending on your brand, you may want to send fun emails wishing people happy holidays or celebrating other times with them.

Regularly Run Re-Engagement Campaigns for Existing Customers

Not every customer makes that loyalty list or signs up for the program. After all, if every person that purchased with you automatically made it to the loyal customer echelons, how exclusive would that be?

However, the goal of lifecycle marketing for business owners is to get as many people there as possible. You do that by constantly shepherding and re-engaging with existing customers.

Segment your list so you know who is already in the loyalty program, receiving those emails and benefits, and who isn’t. Then, design email campaigns specifically for those people you want to re-engage with or herd into the fold of your loyal audience.

How you do this depends on your brand and target audience, but here are a few ideas to get you started:

  • Use some of the emails from our article on turning window shoppers into customers, including promotional emails.
  • Send a check-in email to let customers know you noticed they hadn’t been around in a while and that you miss them. Consider sending a promo code or other offer to entice them back.
  • Use news about new product lines or changes to your shop as a reason to connect with people. Send out an email announcing the news—it’s authentic and valuable while also reminding people to return to your shop (without having to say they seem to have left you).

Encourage Brand Ambassadors

You might consider creating a top-tier rewards structure for the most loyal customers. These are the people who buy with you consistently, share your social posts, and are always happy to tout your brand online or off.

Brand ambassadorships can work similarly to a referral network. Those most-loyal customers get perks for sending you more customers and talking about you online. The perks can range from free products to include in their social posts to monetary commissions on referrals that make purchases. How you choose to run such a program depends on how much work and other resources you put into it.

But just having this type of program gives loyal customers something to work toward, increases customer engagement, and helps them partner with you to plant more seeds in your metaphorical garden. It’s a great example of how lifecycle marketing really is a cycle.

Unfortunately, loyal customers are on a coin with a less positive flip-side. Turn that coin over and you have the lost customers—the ones who have gone on to purchase elsewhere or nowhere at all.

Let’s look at how you can win-back those lost customers, so you have a chance at making them loyal, perennial customers in the next article.