5 Ways to Reward Loyalty and Drive Life Time Customer Value

1st July 2014Business Development

Uncovering ways to drive customer loyalty

Today more than ever customer loyalty is a precious and priceless asset.

So how should you reward your most loyal customers, encouraging them to buy more and stay with you longer?

Here are five tried and trusted techniques:

1. Deliver exceptional quality and service

Consistent product quality and exceptional customer service are the hallmarks of companies with highly loyal customers.

Falling short on product quality or customer experience definitely means falling behind in today’s highly competitive markets.

Indeed, Sitecore’s report on “Building Loyalty and Driving Revenue in the Digital Age” cites a recent E-Consultancy survey where 89% of respondents identified providing a great customer experience as an essential requirement for driving brand loyalty.

Therefore, before investing heavily in reward programmes, it makes sense to ensure that you deliver your core product and service offering to the highest possible standards.

2. Provide exclusive offers for existing customers only

According to the Chartered Institute of Marketing, repeat customers spend on average 67% more than new customers.

It makes sense therefore to recognise their value to your business by encouraging them to buy further into your brand. There are several ways of doing this:

1. If you have a new product line, offer your loyal customers a pre-launch preview and an introductory discount.

2. If you have a premium service, let them have an upgrade for free.

3. Above all, encourage them to become advocates by offering them money back or benefits in kind if they recommend and sign up friends and family.

3. Value your loyal customers and personalise your communication

Fortunately, the days of broadcasting a one size fits all message and processing customers through the transactional details that they give are long gone.

In this digital age no consumer expects to be treated like a number.

For them to feel valued you must treat your customers with respect. Each one is an individual person for your organisation to learn more about.

In so doing, you can personalise the service you deliver and the offers you make. Moreover, you demonstrate that you are striving to accommodate their individual needs.

You can go further by inviting your customers to tell you how to improve your products and services. Armed with their feedback you can let them be the first to try out enhancements and reward them for their engagement with your brand.

Smart companies realise that every touch point is an opportunity to learn more about their customers. For this reason, they go out of their way to collect and share data to personalise their future communications.

Simple ways to do this include:

  • Online customer registration,
  • C-sat surveys,
  • Call monitoring, and
  • Social listening.

4. Know who your best customers are and target them with loyalty enticements

Getting to know your customers better, allows you to identify your best customers.

Indeed, the concept of sorting customers into profitability tiers (the so-called Customer Pyramid) has been with us since the 1990’s.

The holy grail of loyalty programmes is not only to reward those customers who currently buy the most from your company (the famed Platinum and Gold customers) but crucially to target those that have the potential to spend more if only you could entice them to do so.

Your loyalty programme should therefore promote heavily to this latter group of customers. For example, airlines offer tiered benefits and tempt customers with enhanced points earning offers to move to the next level, often coupled with an early taste of these benefits such as free business lounge access.

Retailers and restaurants frequently reward your custom with money off your next purchase. What does your business do?

5. Reward loyalty better and more quickly than your competitors

Savvy customers know that the power rests with the consumer. Their loyalty has to be earned and well rewarded.

Therefore,  it makes sense wherever possible not to put undue restrictions on the ability for your best customers to cash-in on their rewards.

So, if you are a hotel, don’t impose blanket black-outs on where and when reward nights can be taken.

Encourage your staff to “go the extra mile” at all times for your returning customers. Why not let them use their initiative based on what they learn about your customers’ individual needs?

After all, customer delight is tailored to an individual’s needs. It could be more spacious accommodation, a room with a view or even a free bottle of wine with the evening meal.

Finally, keep an eye on your competitors.

Are they offering something new?

Are their benefits more attractive than yours?

After all, your best and most loyal customers will more than likely be on their radar screens too.

NB: This post was originally in July 2014. It has been extensively updated in March 2020

If you enjoyed this article, please read https://www.chrisdunnconsulting.co.uk/what-price-customer-loyalty/