Loyalty Marketing: 7 ideas for retaining acquired customers

Everything revolves around the customer! A company’s success is guaranteed by customer loyalty! Loyalty marketing is the most widely used incentive system today to get customers to return to buy from a particular company, creating special bonds directly with the brand. The closer a customer feels to a brand, the more inclined they are to purchase the product, which is why the company must always strive to satisfy any customer need. Building customer trust and maintaining it over time is the real secret to a brand’s success.

By implementing a loyalty marketing strategy, the benefits are almost immediate, from increased sales to word-of-mouth and building closer ties, but we will look specifically at all the advantages of loyalty marketing. If you want to be able to outline the best digital strategies to grow your business enroll in the Digital Marketing Program.

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Loyalty marketing: what is it?

Don’t be alarmed; the definition of customer loyalty marketing is not as complicated as it sounds. It represents the set of actions aimed at customer retention and loyalty. Adopting a loyalty marketing strategy means using incentives aimed at enticing customers to make continuous purchases over time or to try out new products, with the aim of increasing profitability and extending the duration of the loyalty relationship


We are, therefore, in the business of marketing strategies aimed at building lasting relationships with valuable customers in order to keep them loyal over time.

Loyalty marketing: why do it?

Retaining the loyalty of a customer means, first of all, satisfying their needs and requirements for a product or service, but after a purchase, it means maintaining and cultivating a relationship of trust and communication with them. This process has been the basis of marketing since time immemorial and still plays an indispensable role today for any business, whether it is a customer in the flesh or a virtual customer.

Why perform customer loyalty marketing? There are two main advantages:

Loyalty marketing is cheaper

One of the main advantages of investing in customer loyalty marketing is that it is cheaper to retain a customer than to seek a new one. This is because, thanks to online retargeting tools, it is easier to profile acquired customers than to implement campaigns on new potential customers whose response is not predictable.

Obviously, both activities must be kept active, but often companies do not take advantage of the fact that they have already gained the trust of users who have become customers and whose data (e-mail and often telephone number) they already have to keep “warm”. This is not to say that it is easy to keep a customer.

Customer loyalty enhances web reputation

One would immediately say that we retain a customer in order not to lose him, to hold on to him and make him buy from us again. Right, but there is more. How does a customer who is happy to have bought from a company behave? He speaks well of that company. On the web translates concretely into leaving good reviews, which means wanting to share their experience with their circle of friends online, which means, in the end, receiving valuable free publicity.

Here, “pampering” the customer is the best method to find new customers: brand reputation is consolidated spontaneously through word of mouth.

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Strategies for loyalty marketing

It is certainly not easy to retain a customer, especially nowadays, where everyone is bombarded with offers from all sides. The modern customer is demanding and fickle; he is no longer the one of the past who remained faithful to his trusted baker but searches, surfs, informs himself, and looks for the best offer on Amazon after having been in the shop: retaining him is no easy task.

loyalty marketing pyramid

One has to experiment, find the right way, and have the winning strategy and the courage and ability to change it because that strategy will not be the best forever.

Sales Techniques

The most frequently used strategies for building customer loyalty are cross-selling, up-selling, and trading-up. Let us now see what these terms mean:

  • cross-selling: consists of selling a second product after consolidating the sale of the first one;
  • up-selling: consists of proposing to the customer an offer superior to his initial idea;
  • trading-up: this is a strategy whereby an attempt is made to increase sales of a more expensive and higher quality product, compared to another of the same line already on the market that is cheaper and of lower quality.

Online loyalty marketing programs

Using an automated reward app is one of the best ways for SMEs to quickly set up a loyalty program to reward long-term customers. For example, you can offer discounts, coupons, cashback, gift cards, points, or customized gifts for a group of customers (people who have purchased a specific product) or for an individual customer (birthday gift or reward for reaching a certain level).

You can also offer rewards to new customers through advertisements and geographical targeting.

Companies will want to establish a loyalty program that rewards customers who continue to shop. Loyalty programs are very cheap to implement but can dramatically increase customer lifetime value. An effective loyalty program will also improve loyalty by decreasing the value of purchases made through competitors.

Most popular online loyalty programs

1. Belly: is a loyalty program offering customized rewards, email campaigns, social visibility, and integration for loyal customers. This system offers three different plans depending on the functionality required by your company.

Each plan includes a digital loyalty program that integrates with Apple Passbook and Google Wallet, a customizable iPad for your customers to sign up for, in-store marketing materials, and inclusion in the Belly mobile app where potential customers can discover your business. Regardless of the plan chosen, Belly assigns a Merchant Success Manager to each merchant to facilitate strategy, positioning, and product.

2. Spendgo: offering customized customer engagement programs, this tool emphasizes the food and catering industry. With Spendgo, you can create campaigns focused on generating new customers, retaining existing customers, and winning back abandoned customers with loyalty programs that you can use in-store, online, or on mobile devices.

3. Foursquare: when you claim your business on Foursquare, you can offer incentives, including discounts, freebies, or upgrades. With Foursquare, you can reward both existing and new customers who search the app for local business offers. To redeem, customers simply show the offer on their phones.

Effectiveness of online loyalty programs

According to The Loyalty Report, the average consumer is involved in 14 loyalty programs but has the ability to interact with only seven. Companies lose money in terms of time and effort, and customers no longer get value from the companies they are “loyal” to. So how do you keep your business out of that segment? How do you add enough value to your programs to keep customers coming back?

Loyalty programs: 7 ideas for creating them

It is time to look beyond complex reward systems and offers real value to customers who use their loyalty program. Here are some ideas for customer loyalty programs that could work for your company.

Using a loyalty points system

This is the most common loyalty marketing methodology. Frequent customers earn points, which translates into some kind of reward. Whether it is a discount, a free gift, or a special treat, customers work to earn a number of points to redeem their reward. If you choose a loyalty program using points, make conversions clear and simple.

Even while a points system is possibly the most popular type of loyalty program, it may not be appropriate for all kinds of businesses. Businesses like Boloco that promote frequent short-term purchases benefit from it the most.

Case Study: Sephora’s Beauty Insider Program

Sephora, a cosmetics brand, is an example of a company that does its loyalty points program well.

sephora program case study

Customers swipe their elegant Beauty Insider Card with every purchase, and the card keeps track of the amount of money spent.

Every dollar spent equals one Beauty Insider point, and shoppers can redeem the points at checkout to spend them on beauty items. Sephora speaks the language of its audience by measuring points in dollars and rewards for cosmetic items.

Using a level system

For most businesses creating loyalty programs, finding a balance between realistic and attractive rewards is a challenge in order to reward initial loyalty and drive more purchases. Implementing a tiered system that rewards initial loyalty and promotes more purchases is one method to prevent this. As a basic offer to join the program, provide tiny prizes; as a customer moves up the loyalty ladder, encourage recurring business by raising the value of the rewards.

This helps solve the problem of members forgetting their points and never redeeming them because the time between purchase and reward is too long. The biggest difference between the points system and the tiered system is that customers extract short-term value versus long-term value from the loyalty program.

Tiered programs may work better for a high level of commitment for companies with higher prices, such as airlines, hospitality companies, or insurance companies.

Charging an upfront fee for VIP benefits

In some circumstances, a one-off (or annual) fee that allows customers to bypass common purchasing barriers is very useful for both companies and customers. By identifying the factors that can cause customers to lose customers, a tariff-based loyalty program can be customized to address these specific barriers.

According to a study of 500 leading global brands, cart abandonment rates reached 75.6% among retail, travel, and fashion. This abandonment is often caused by a “shock”‘ after the application of taxes and shipping prices.

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Structuring non-monetary programs around the values of their customers

Truly understanding your customer means understanding their values and sense of worth, and shared appreciation has a significant impact on whether a customer will be loyal to a brand. Depending on your industry, your customers might find more value in non-monetary rewards or discounts.

Creating partnerships with another company to offer all-inclusive offers

Strategic customer loyalty partnerships can be very effective in retaining customers and growing your business. Which company would be suitable for a partnership? Once again, the decision focuses on analyzing the daily lives of your customers and their purchasing processes.

strategic partnerships among companies

For example, if you are a dog food company, you might partner with a veterinary office or pet care facility to offer co-branded offers that are mutually beneficial to your company and your customer. When you provide your customers with value that is relevant to them but goes beyond what your company can offer them alone, you are showing them that you understand and care about their needs.

It will also help you grow your network to reach your partners’ customers as well.

Organizing a prize competition

Who doesn’t love to participate in sweepstakes? Turn your loyalty marketing into a game to encourage repeat customers, and depending on the type of game you choose, it helps consolidate your brand image. With any sweepstakes, however, you run the risk that customers will feel like your company is playing them to win business.

To mitigate this risk, it is important that customers feel like they are not being cheated out of prizes. The odds should not be less than 25%, and the purchase-to-play requirements should be achievable. Also, make sure that your company’s legal department is fully informed and compliant before making your competition public. If executed correctly, this type of program could work for almost any type of company, even B2B companies.

What if I don’t use a loyalty program?

Considering the way many marketers offer loyalty programs, another idea is not to use a program. Rather, build loyalty by providing beginner users with fantastic benefits, connecting them, and offering these benefits with every purchase.

This minimalist approach works best for companies that sell unique products or services. This does not necessarily mean that you offer the lowest price, the best quality, or the highest convenience; instead, it is about redefining a category.

A loyalty program might not be required if your business is testing out a novel good or service. Customers will stay with you because there aren’t many other options that are as wonderful as you, and you’ve been communicating that value since the very beginning.


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