How to grow Customer Lifetime Value with a Brand-Loyalty Strategy

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How to grow Customer Lifetime Value with a Brand-Loyalty Strategy

Retailers can be left scratching their heads when it comes to earning customer loyalty in today's modern, hybrid-market. The answer is relatively simple, yet notoriously difficult to put into action, and that is:

Treat each customer as an individual, not just an order number.

Loyalty transcends goods and services by establishing a connection between customers and the brand — one in which customers feel truly appreciated. Customers revere brands that cater to their needs, provide personalised shopping experiences, and offer tailored promotions.

These types of personalised experiences transform customers into vocal brand advocates and to a certain degree, external influencers - driving even greater reach. Brands can learn from these customers to attract more consumers with similar value attributes to boost acquisition and retention.

  • 78% of consumers are more likely to buy from a brand with a loyalty program.

  • 53% of customers say they feel an emotional connection to the brands they buy from the most.

  • 7% increase in loyalty is all it takes to increase lifetime profits by 85% per customer.

Salesforce Research, 2019, 2020. "Connected Shoppers Report", "State of the Connected Customer Report". Corner speech icon

Implementing loyalty programs with a high-rate of customer acquisition/retention is difficult because a truly unique and personalised experience doesn't conform to the 'normal' value exchange retailers are accustomed to. Traditional loyalty schemes are transactionally focused and impersonal — customers earn points, redeem rewards, rinse and repeat.

However, brand-loyalty today is more than a singular strategy based on store credit or points — it's a comprehensive strategic initiative driven by retention across all touchpoints.

Free shipping, new product previews and personalised experiences all serve as key methods to boost customer loyalty.

How are retail loyalty strategies changing?

Traditional retail loyalty strategies made to brazenly harvest customer data are fast becoming tired and outdated.

  • Customers have member fatigue from belonging to over 14 loyalty programs.

  • Brands leave as much as $100 billion on the table in unredeemed points annually, reducing engagement and satisfaction.

  • Only 2 in 10 members are very satisfied with the level of personalisation in their loyalty programs.

  • The pandemic brought a new set of shopping behaviours and customer expectations that further put existing loyalty programs to the test.

Salesforce Research Corner speech icon

Following the relaxed policies of COVID governments, The 'Modern' Consumer is now a hybrid-retail connoisseur who's now traversing physical and digital realms of retail, along with a penchant for perusing social channels.

The modern consumer is becoming more brand-fluid; willing to switch allegiances when choices hinge on value, availability, and convenience. This means an expertly assembled loyalty strategy is more important than ever.

How can retailers increase customer loyalty?

Loyalty programs create the perfect mix of rational and emotional benefits. Customers agree to share their data preferences and information in exchange for personalised incentives and dynamic rewards. That value exchange drives some of the most successful loyalty programs today.

Fast-food giants, McDonalds send limited-time meal offers via email, Delivery services such as Just Eat and Uber Eats have in-app notifications regarding free delivery or money off codes. Your favourite coffee chains are likely to offer rewards for a set amount of purchases, as well as free birthday drinks, and even surprise offer drops occasionally.

Retailers such as BooHoo and ASOS even send discount codes to their subscribers offering as much as 50% off until midnight that very day - a huge financial incentive along with a time-limited offer = £££.

These experiential loyalty rewards cater to individual preferences to make each customer feel special, going above & beyond the traditional methods of existing retail loyalty programs.

"To meet expectations, retailers need to weave loyalty into the entire customer experience. Seventy-nine percent of consumers say the experience a company provides is as important as its products and services."

Salesforce Research, 2020. "State of the Connected Customer Report, Fourth Edition" Corner speech icon

How to build a data strategy for long-term brand loyalty

The successful retailers dominating the brand-loyalty acquisition/retention game are those with a strong foundational data strategy. They possess a unified view of their subscribers that enables them to reward loyalty throughout the entire customer experience.

Integration with front & back tech-systems is key for this unified view. Retailers need to connect behavioural data from retail loyalty programs with purchase data from point-of-sale systems, the eCommerce storefront, and mobile apps and tie it together with systems like inventory and order management for the most complete view. This strategy turns loyalty into a key principle running throughout the organisation.

Retailers need to understand their customer's requirements and create tailor-made experiences and interactions across each retail touchpoint. Collected data is scalable and readily available to retailer's marketing departments, that can be utilised behind the scenes in the office and on the shop-floor.

"Evolve your approach to loyalty. Peel back the layers of a successful retail loyalty strategy and offers ways to move from a transactionally focused program to human-centric experiences that improve customer lifetime value."

Salesforce Research "Connected Shoppers Report", "State of the Connected Customer Report". Corner speech icon

What is a successful Customer Engagement Strategy?

The most successful loyalty strategies provide their customers with unique, tailor-made experiences where they feel valued — not just as if they're another order number or assimilation of data.

However, the program itself is only a single cog of a comprehensive brand-loyalty strategy. It should comfortably align the entire business and enable the kind of engagement that makes customers feel like they're part of something exclusive.

With customer data as the foundation, retailers can make informed decisions on customer segmentation, reward loyalty with unique, tailored experiences that are relevant to each individual, and ultimately increase brand-loyalty rates — the true indicator of a successful customer engagement strategy.