Why Customer Loyalty Matters.

 

Why Customer Loyalty Matters.

Loyalty is become more important to companies now more than ever. Why? 75% of members of top grossing loyalty programs changed their behavior to create more value for businesses (in the US). For brands that can crack this, there are meaningful top line revenue driving implications that result because customers are 64% more likely to purchase more frequently, 50% more likely to recommend that brand to others and 31% more willing to pay a higher price to stay with a brand. How could a brand not want to take advantage of this? A solid loyalty program is complex and not easy to build, however. It takes time, money and investment in resources to do this successfully and many brands fail to connect the dots in a way that build real value. That said, the benefits are clear for brands we see thriving in this environment like Sephora, Costco and Airline miles programs like Delta and United that create an offer so compelling that they prevent customers from leaving to go to the competition. So why can't everyone do this? There are complex and varying considerations when building out a loyalty program including defining a clear target market, customer data and engagement metrics, personalization like birthday points or recommendations and a built out CRM systems to have a 360 deg view of the customer, which can be costly. All of this to say, loyalty is critical for success for top brands today, although the complexities and nuances to building one that's sticky can be harder than it sounds. It will be interesting to see as we continue to move out of the COVID-19 pandemic, how brands navigate this.