Why Customer Loyalty and Retention is Your Most Profitable Strategy [+ 3 Real-World Examples]

You’re standing at a fork in the road. One path leads you on an expensive treasure hunt for new customers. The other takes you back to your existing customers – who already know, like, and trust you.

Which path would you choose?

Here’s a shocking truth that will make your decision easier: It costs 5 to 25 times more to acquire a new customer than to keep an existing one. Yet most businesses keep pouring resources into hunting new customers while their existing base sits like an untapped gold mine.

Think about that for a moment. Would you rather spend $500 trying to convince a stranger to trust you, or $100 to keep a customer who already does?

The math is simple, but the business opportunity is immense. Business leaders must adopt effective loyalty and retention strategies tailored to their specific industry and target audience. By understanding the unique needs and preferences of their customers, they’ll be able to develop personalized experiences that keep customers engaged and returning. 

Here are a few must-have strategies for your loyalty and retention toolbox. 

Stop treating your customers like numbers in a spreadsheet. Modern technology lets you track their preferences, purchase history, website interactions and social media engagement. By creating precise customer segments, you can craft campaigns that speak directly to each group’s specific desires, challenges, and motivations. 

Imagine you’re running a coffee shop. What if you could promote your new dairy-free options to those who’ve previously ordered almond or oat milk. Or perhaps you send an SMS reminder notification to occasional visitors about your seasonal specials right when their favorite flavor returns. Now that’s the kind of personal touch that perks interest and encourages repeat business.

Your customers don’t think in channels – they think in experiences. Whether they’re on their phone, laptop, or in your store, they expect the same seamless experience. Here are a few key considerations when creating your perfect omni-channel experience:

• Unify your brand voice: Ensure your messaging and writing style is consistent, whether a customer is reading an email, browsing your website, or chatting with support. 
• Create a centralized knowledge base: Develop a comprehensive, easily searchable repository of product information, FAQs, and troubleshooting guides. Make this information accessible, regardless of the channel.
• Offer channel flexibility: Allow customers to start a purchase on mobile and finish on desktop, or begin a support ticket via email and continue it on social media. This flexibility caters to diverse customer preferences and lifestyles.

A loyalty program without clear rewards is like a game where no one knows the score – why even play? Your program should offer rewards that customers actually want and can easily understand, such as points, discounts, exclusive perks, or early access to new products. 

Pro tip: When running a points-based system, consider sending regular, strategic communications about points balances and redemption opportunities. These do more than track rewards—they create ongoing engagement that keeps your brand top-of-mind. 

These real-world examples showcase how brands are breathing life into the loyalty strategies we’ve explored. From fashion retailers, to airports, to theme parks, each example reveals a universal truth: Exceptional loyalty isn’t about transactions. It’s about creating moments of unexpected delight, understanding individual customer journeys, and making people feel genuinely seen and valued.

City Beach’s loyalty program success

City Beach, Australia’s iconic surf and street fashion retailer, has successfully ridden the wave of customer loyalty with its innovative points-based program. Since its implementation, the retailer has seen a significant boost in customer retention and purchase frequency, with a 10% increase in conversion rates attributed to the loyalty program.

How they did it:

• Omni-channel Execution: Expanded communication channels to include email, web, Digital Ads, SMS, and Mobile Wallet.
• Rewards System: Offered points-based rewards system (1,000 points = $10 coupon) and provided 20% discount for new loyalty program sign-ups.
• Seamless Integration: Captured and tracked customer behavior across online and in-store channels.
• Targeted high-engagement segments: Identified highly engaged customer segments and created more personalized campaigns and incentives based on data insights.

By allowing customers to earn and redeem points both online and in-store, City Beach has created a frictionless experience that keeps customers coming back, regardless of how they choose to shop.

Village Roadshow Theme Parks’ personalization

In the entertainment industry, Village Roadshow Theme Parks sets new standards for personalization. Jarrah, Village Roadshow’s Marketing Manager, highlighted the importance of making experiences more meaningful and personal through deeply understanding their data. 

How they did it:

• In-depth Profiling: Unified data from various sources such as ticket sales, app usage, and park interactions to create a 360-degree view of each guest.
• Advanced Segmentation: Used relational data to segment visitors based on factors like visit frequency, preferences, and family size, delivering targeted offers and communication.
• Personalized Omni-channel Campaigns: Engaged guests across email, SMS, and mobile apps with real-time personalised offers, recommendations, and park updates. For example, they sent parents with kids under 12 a birthday reminder with a special offer.

By leveraging these strategies, Village Roadshow Theme Parks has transformed the guest experience, driving higher customer satisfaction and increased revenue.

Brisbane Airport’s data-driven personalization

Brisbane Airport has revolutionized its customer experience through a sophisticated, data-centric approach. At the helm of this transformation is Claire Williamson, Brisbane Airport’s Commercial Marketing Manager, who champions a strategic and purposeful data collection strategy.

How they did it:

• Persona-based segmentation: Created distinct profiles for business travelers, leisure travelers, and FIFO workers. This allowed them to tailor messaging and offers to match each group’s specific needs, such as promoting time-saving parking options to busy executives. 
• Real-time contextual messages: Tracked customer behavior across touchpoints and triggered personalized messages at critical moments, like sending fast-track security information to business travelers during peak hours. 
• Progressive profiling: By integrating data across web, mobile, email, and SMS channels, they created a consistent experience while gradually learning more about each customer’s preferences. 

This comprehensive strategy not only enhanced the traveler experience but also drove significant increases in active customers and revenue.

As we’ve seen from the success stories of City Beach, Brisbane Airport, and Village Roadshow Theme Parks, the future of customer loyalty is being shaped by the convergence of artificial intelligence and deep human understanding. The landscape is shifting dramatically, with AI and machine learning not just enhancing loyalty programs, but completely reimagining them.

In 2025, we can expect to see hyper-personalized rewards adapting in real-time to customer behavior, predictive analytics anticipating needs before they arise. This shift from reactive to proactive engagement is already yielding impressive results.

To stay competitive in this new era of loyalty, businesses need robust tools that can harness the power of AI while maintaining a personal connection with customers. At SAP Emarsys, we offer a comprehensive customer loyalty solution that combines advanced AI capabilities with intuitive personalization features. Our platform helps brands seamlessly launch omnichannel loyalty experiences that reward, retain, and nurture repeat customers.