It’s no secret that with skyrocketing acquisition costs and competitors looming at every corner waiting to tempt your audience away, customer loyalty has become the Holy Grail of sales and marketing. It stands to reason, loyal customers spend more, more often, and are resistant to competitors’ offers. 

So, if you want to scale your business, maximize revenue, and increase customer loyalty, you need to create and deliver the kind of highly relevant, personalized customer experiences that turn fair-weather shoppers into loyal brand advocates. 

But what is customer loyalty, why is it important, and how can brands foster more of it? 

In this article, we’ll cover everything you need to know about this powerful retention strategy, complete with actionable advice on how you can start growing loyalty within your own customer base. 

What is Customer Loyalty?

Customer loyalty can be defined as a person’s willingness to interact with and buy from a specific company on an ongoing basis. If you can create memorable, positive experiences for your customers, you’ll increase the chances of them not only coming back for more, but spending more per purchase. 

Customer loyalty is more important than ever

The SAP Emarsys Customer Loyalty Index 2023 found that 52% of respondents left a brand behind due to a bad experience. When it’s 5x easier to retain a customer than acquire a new one, numbers like these are hard to ignore. 

This is why brands that focus on creating valuable experiences and stand-out service for their existing customers reap the rewards of repeat business and increased customer lifetime value.

In an over-saturated marketplace and tight economy where both brands and customers are feeling the pinch, loyalty matters more than ever.

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Customer loyalty vs customer retention

When building a digital marketing strategy to keep your customers coming back, it’s important to understand the difference between customer retention vs customer loyalty. While both concepts are crucial to your marketing success, they focus on slightly different aspects of customer engagement.

Customer retention is a company’s ability to retain its customers over a certain period of time, preventing them from switching to competitors. Customer retention is motivated by price, so strategies typically focus on short-term tactics to encourage repeat purchases such as promotions, discounts and loyalty programs. 

Customer loyalty, on the other hand, is a deep emotional connection and trust between a customer and a brand. Customer loyalty is a result of repeated positive experiences with a brand, as well as the perceived value of its products and services. Loyal customers aren’t just more likely to repurchase and choose your brand over your competitors – they’re also more likely to drive referrals by recommending you to their friends and family. 

Fostering customer loyalty takes more than discounts and incentives – you need to build trust through consistent, positive experiences, listen to your customers, and align your b

How to Increase Customer Loyalty

Looking to increase your customer loyalty? Here are seven proven techniques that leading brands use to bridge the gap between them and their customers and grow long-lasting loyalty.

Invest in customer engagement technology

Batch-and-blast marketing is a thing of the past. If you want to attract, retain, and win loyal customers, you need to understand who they are and what they want. The key to making this happen lies in your data, but in order to use that data, you need the right technology.
By using a customer engagement platform, you can connect your product, sales and customer data from multiple sources into a single, holistic view of your customers, giving you the data you need to create a personalized, seamless customer experience.

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Personalize your customers’ experience

24% of respondents in our research said they’re more loyal to brands that engage them with personalized content. So, if you want to foster loyalty and keep your customers coming back time and time again, personalization is your new best friend. 

Data powers personalization — and personalization drives loyalty. By taking the time to create tailored shopping experiences for your customers, you show that you understand them, helping to bring them closer to your brand and build trusted relationships. 

By consolidating and leveraging your product, sales, and customer data, you have the information you need to elevate personalization beyond first names in subject lines and create relevant, meaningful experiences that drive repeat purchases and cultivate customer loyalty. 

Remove friction from the customer journey

Nobody likes friction, least of all your customers. If you want to keep them coming back, exploring new product lines and recommending your brand to their friends and family, you need to make those processes as simple as possible. 

You can cut down on friction in your customer journey by following these three steps: 

  1. Map out your customer journey: Define your customer personas, and map out their paths to purchase across your core marketing channels. 
  2. Track how customers engage across key touchpoints: Use marketing analytics and customer insight tools like Hotjar to gather data on how customers interact with your content. 
  3. Identify areas for improvement: From emails to landing pages, highlight bottlenecks in your customer journey and create A/B split tests to work towards removing friction.

Decrease the friction in your user journey and you’ll increase engagement, acquisition, retention and customer loyalty.

Reward customers

Looking to strengthen your relationship with your customers and encourage repeat purchases? It could be as simple as rewarding them for shopping with you. Providing customers with rewards and perks for engaging with your brand is a proven strategy for enhancing customer loyalty and driving retention. 

Try out the following incentives for your brand: 

  • Discount codes: Offer percentage or fixed amount off future purchases.
  • Free products: Reward purchases with a free gift; for example, a complimentary item when a customer reaches a certain spending threshold.
  • Exclusive access: Provide early access to new products or sales.
  • Free shipping: Offer free shipping on the next order or for a limited time period.
  • Loyalty points: Implement a points system where points can be earned with each purchase and redeemed for rewards.
  • VIP experiences: Invite loyal customers to exclusive events or provide them with early access to sales.
  • Birthday rewards: Give special discounts or free products on a customer’s birthday.
  • Referral bonuses: Reward customers for referring friends who then make a purchase.

Personalization and automation takes this to the next level. By onboarding a customer engagement platform, you can tailor rewards to each customer based on key data points like Average Order Value, purchase frequency and product affinity, and automate them so they send out based on predefined triggers. The result? An always-on rewards strategy that makes your customers feel valued and understood on an individual level, giving them a compelling reason to return.

Prioritize customer service

Customer loyalty goes both ways — if you want to cultivate it, you need to show your customers that you’ve got their back when they need help or support. 

In our research, we found that an incredible 44% of consumers cite “excellent customer service” as the reason they stay loyal to a brand. These high standards give you an invaluable opportunity to set yourself apart from competitors. 

By focusing on a compelling, effective customer service strategy, you show your customers that you care about their business even when they aren’t 100% satisfied, and are committed to giving them a positive brand experience. 

Delivering stand-out customer service is an investment, but lackluster customer service will cost your business more. In fact, studies show that half of consumers will consider buying from a competitor after just one poor customer service experience — with that number increasing to 80% if their next customer service interaction falls short, too. 

When customer loyalty and long-term repeat business is at stake, investing time and resources in improving customer service is a small price to pay. Focus on making customer service a priority across all touchpoints, including social media, so you can engage your audience effectively, no matter where they need support.

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Create a consistent omnichannel experience

Consistency creates trust, and trust leads to loyalty. 

If you want to drive loyalty, you need to meet your customers on the channels they spend the majority of their time on.

This goes beyond simply being present on multiple channels – your content, brand and messaging needs to be consistent across all of them, too.

With the right personalization platform, you can create meaningful omnichannel engagements that drives sales, complete with marketing analytics to prove revenue contribution. 

However, with multiple teams, freelancers and agency members working across your channels, this can be tricky to achieve. Create a set of Tone of Voice (TOV) and brand guidelines that govern the language and design themes that should be used throughout. 

The result? Consistent cross-channel messaging, enriched with data that delivers a personalized experience – regardless of where your audience engages with you. 

Ask for feedback and act on it

Customers are loyal to brands who understand them and are receptive to feedback. Your ability to collect, analyze, and action this feedback can be the make or break of your retention and loyalty strategy. 

Some of the best places to gather feedback from your customers include: 

  • Email: Send out surveys via email to gauge customer satisfaction levels and identify key ways to improve them. 
  • Landing pages: Create feedback pop-ups on key customer touchpoints asking non-converters why they didn’t take action.
  • Loyalty programs: Build feedback into your loyalty programs to gather feedback from your most loyal customers, offering them rewards in return.
  • Live chat data: Use live chat analytics from platforms like Zendesk to surface customer feedback and improve satisfaction. 
  • Social listening: See what your customers are saying about your brand and its products online, and use this information to improve your offering. 

Act on the feedback you receive and you won’t just improve your core metrics, you’ll also build a deeper understanding of your customers and build valuable trust.

Provide support post-purchase

Once the customer completes their purchase, your job is done, right? Right? Brands that stop their customer nurturing here are making a crucial mistake. Post-purchase support shouldn’t be an afterthought, because it’s an essential stage of the buyer journey that has a huge impact on retention, satisfaction and loyalty.

So, when that sales bell rings, don’t stop – stay in touch with your customers. Here are some ideas to help you keep the conversation going: 

  • Send post-purchase emails: Send thank-you emails, ask for feedback, or provide tips on how to best use your products. Personalize these emails based on the products your customers bought. 
  • Double down on customer service: Offer easy access to customer support to resolve any issues with the product or service quickly. Ensuring a hassle-free resolution process strengthens trust and reliability.
  • Provide rewards and loyalty incentives: Use rewards and incentives to drive those all-important second purchases, and nudge your repeat customers towards your loyalty programs as a thank you for their business.
  • Ask for feedback: Reach out to customers directly to gather insights on their purchase experience. This not only shows you care about their opinion but also helps you improve your products and services.

Build a community

Building a community around your brand is a powerful way to grow your customer engagement and deepen loyalty. By creating a space where customers can connect and interact with one another, you help to foster a sense of belonging and commitment, increasing your customers’ emotional attachment to your brand. 

This can be achieved through various platforms such as social media groups, forums, or membership clubs where members can discuss products, offer advice, and provide feedback. 

These community groups don’t only enhance the customer experience and foster loyalty – they also provide you with invaluable insights in the form of organic customer feedback that you can use to refine your strategy and improve your product offering.

Why is Customer Engagement Important for Businesses?

Customer loyalty can take time to get right, but loyal customers pay dividends once dialed in. From increased engagement to reaching previously-unidentified sales opportunities, here are six of the top benefits you can achieve by focusing on customer loyalty.

Builds emotional connections

In a world where your audience sees endless competitor ads and marketing campaigns every day, you need to think differently if you want to stand out. 

This begins with switching focus from sales to loyalty and putting the customer at the center of your marketing strategy. By creating relevant content and engagements that go beyond simple discounts and incentives, you won’t just differentiate yourself from the hordes of competitors vying for your customers’ attention — you’ll build meaningful relationships that grab attention and build brand trust. 

By creating these strong emotional connections with your customers, you’ll foster long-lasting loyalty that keeps them coming back. 

Drives repeat business

Meaningful connections build brand trust, which is both a powerful sales driver and a robust defense against competitors. 

In a digital world, your customer’s journey through the buying stages will occur across multiple channels — giving competitors the opportunity to swoop in and steal them away with targeted advertising and well-timed engagements. However, when customers have tangible, loyal connections to a brand that they trust, they circumvent the consideration phase and jump straight to conversion, often spending more. 

This might be marketing theory, but it translates to practice, too. The numbers are there to back it up. 

Customer loyalty research shows: 

So, whether it’s down to a positive customer service experience, an emotional brand connection or simply a stand-out product range that they can’t live without, customer loyalty is key to keeping customers coming back.

Increases lifetime value

Most businesses agree that it costs 5x as much to attract a new customer as it does to retain a current one. In a climate where acquisition, manufacturing, and shipping costs are rising, this statistic is more relevant than ever. 

This is where the power of customer loyalty really starts to shine. 

Repeat customers who trust and are loyal to your brand are more likely to explore other product ranges that they might not have previously considered, as well as ordering their favorite products in increasingly large quantities. 

This has a substantial impact on Customer Lifetime Value, as loyal customers both purchase more frequently and spend more than non-loyal customers who might return but are likely to purchase infrequently and in smaller quantities. 

So, by nurturing customer loyalty, brands have a golden opportunity to dramatically increase the lifetime value of each customer, maximizing their revenue potential. 

Reaches new customers with brand advocates

Work on customer loyalty, and your audience won’t just keep coming back themselves — they’ll bring their friends and family with them, too.

From relevant online engagements to stellar products and positive customer service interactions, create positive customer experiences and they’ll spread the news via word-of-mouth marketing. 

Many people trust recommendations from friends and family more than online reviews, which means your biggest brand advocates can help you tap into new customer bases and attract buyers outside of your typical marketing reach. When 44% of loyal customers are willing to recommend your business to friends and family, that’s a lot of new potential customers.

Pro tip: Turn customers into brand advocates and drive more referrals with targeted incentivization. Build referral offers into your loyalty program with rewards that unlock at different stages, and add referral offer blocks into emails sent to repeat customer segments. 

Provides you with a competitive advantage

Getting first-time customers to return to your store instead of taking competitors for a spin is a challenge that many marketers lose sleep over. However, keeping first-time customers coming back couldn’t be more important. 

Studies have shown that even a 5% increase in customer retention can increase revenue by 25-29%. With today’s marketers being pushed to deliver more results with less budget, numbers like these are hard to ignore. 

Loyal customers stay around longer — and spend more per transaction. With this consistent, steady cash flow, you get the stability you need to scale your customer acquisition strategy and win more market share.

Improves resilience to market volatility

Modern customers are fickle. They’re also very price-sensitive. Unfortunately, while it’s an undeniable fact of human behavior, it can also spell disaster for your business in the wrong circumstances. 

In the event of economic downturns and depreciating market conditions, your business can find itself in hot water fast, forced to cut margins and offer deep discounts to keep customers coming back.

Loyalty helps you hedge against this. Not only are loyal customers less likely to be swayed by cost, they’re also much more likely to keep shopping with your brand even if your prices have to increase to cover tough market conditions. 

Innovations in Customer Engagement

Customer expectations are constantly increasing, and customer engagement technologies are never far behind. Here are some of the biggest innovations in customer engagement we’re seeing:

Predictive analytics and big data

If you want to engage your customers, you need to know who they are. This starts with data, and the right customer engagement technology can help you unlock it. Customer engagement technologies helps you get to know your customers better by collecting, analyzing, and processing significant amounts of information by using advanced analytics and big data technologies. 

Predictive analytics then leverages this data to forecast customer needs and behaviors, allowing you to proactively target them with personalized experiences, product recommendations and offers. 

For example, e-commerce platforms like Shopify use predictive models to suggest products that customers are more likely to purchase based on their browsing and purchase history.

Mobile apps and loyalty programs

Mobile loyalty apps are redefining traditional loyalty programs by harnessing the power of smartphones to deliver increased convenience and a more agile, engaging customer experience. 

These apps allow you to send personalized content like offers and coupons directly to customers’ devices, meaning you can capture them when they’re walking past your store, or seal the deal with an in-app purchase. 

With mobile loyalty programs also comes valuable data insights and analytics, which are gold dust for refining marketing strategies and deeper, more accurate customer segmentation. Plus, with the integration of mobile wallet, you can offer seamless reward collection and redemption, increasing customer retention and providing a competitive edge over traditional mobile loyalty experiences.

Grow Customer Loyalty with an Omnichannel Customer Engagement Platform

If you want to maximize the revenue potential of your business and increase customer satisfaction, it’s time to set your sights on customer loyalty. However, delivering customer loyalty-building experiences across multiple marketing channels can be a challenge for businesses. 

This is where Emarsys comes in. 

The Emarsys Customer Engagement Platform helps you create and deliver seamless, personalized experiences to customers throughout their entire lifecycle, ensuring more satisfied customers and long-lasting loyalty. Discover what Emarsys can do for your brand. Watch the 3-minute demo now.