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How to Enhance Customer Loyalty: 6 Tips to Make Loyalty Great Again

Posted by Julia Morrissey on Feb 22, 2022

Last updated on April 6th, 2022 at 03:22 pm

The pandemic fundamentally changed the way we interact with businesses. Big meetings don’t have to be done in person. “Going to the movies” doesn’t necessarily mean you’re going into a theater. And patronizing your favorite restaurant could mean DoorDash delivery to your kitchen.

It also affected loyalty. As supply chains stretched, some favorite brands became hard to find. More than 60% of U.S. consumers experienced out-of-stock items in 2021. Consequently, just 13% waited for the item to be back in stock before buying, and 39% bought a different product or the same item from a competing brand instead. Disconcertingly, 32% switched retailers. 

Getting those frequent customers back into the fold means taking a hard look at the inner workings of your loyalty program and reclaiming those buyers who loved you in “the before times.” 

Below are six tips for how to enhance customer loyalty and get your program in sync with the post-pandemic consumer mindset.

6 Ways to Improve Customer Loyalty

1. Survey Says

Asking loyal customers to rate their shopping experience through email or text can give your brand a boost–as long as it’s done right. Surveying your brand ambassadors shows you’re interested in what they think and is an opportunity to showcase new products and services. 

Keep your surveys short. Don’t ask more than three to four yes/no questions, and avoid leading questions that allude to the answer you’d prefer to receive. Also, don’t be afraid to share your findings with customers. Someone who is interested enough in your brand to complete a survey is likely interested in the results. Share information, such as “16% of your fellow customers also bought Product A last month, and 6% included Product B with their purchase.”

2. Embrace Mobile

Digital wallet users are expected to increase by 70% from 2020 to 2025. This greatly affects the old ways of handling loyalty. Everyone remembers the painstakingly designed loyalty cards we kept in physical wallets. These have been increasingly replaced by an associate asking the customer for their phone number so they can look up their account at the POS. However, this practice is quickly becoming outdated.

Consumers are getting more comfortable using their devices to interact with associates in the store. The next step in this evolution is loyalty through an app that the customer shows at checkout. Mobile loyalty solutions allow the retailer to easily communicate personalized messaging and provide customers with promotional vouchers and coupons. 

3. Personalize the Experience

Consumers want something in exchange for their loyalty, and the best gift brands can offer is a personalized experience. Jeff Bezos, in a prescient quote from 2000 said it best: “If we want to have 20 million customers, then we want to have 20 million ‘stores.’” In other words, creating a tailored experience is key.

With the data collected from loyalty programs on customer profiles and tendencies, rewards can be customized. A recent Mastercard study showed that customers who receive personalized offers from a retailer increase their spending by 18%. This can be done with simple gifts, such as surprising a customer with 10% off at checkout on their birthday or on the anniversary of when they signed up for the loyalty program. 

For instance, the Nike fitness app, NikeFuel, encourages users to share fitness goals and results, allowing them to compete with each other or others in the brand community. Target had success several years ago with its “Kid’s Wish List” app that allowed children to select toys they wanted for the holidays and included an opportunity to write to Santa. Meanwhile, parents received the wish list as well as discount coupons on merchandise.

4. Add a Creative Touch to Experiential Rewards

Experiential rewards have been a part of loyalty programs for years, but it may be time to evaluate those that really intrigue your best customers. The best experiential rewards highlight the brand and promote interaction, as well as create a “fear of missing out” sense that encourages the customer to jump in.

Popular beauty retailer Sephora offers free custom makeovers and invitations to exclusive events to its best loyalty shoppers. Neiman Marcus’ Chairman’s Circle members get salon services, in-store dining invitations, and free valet parking. The point is to make the experience resonate with those repeat customers.

5. Engage on Social

Using techniques such as social listening, you can get a good sense of what people are saying about your brand and where, and use that to give you an idea of what social media is most popular among these best customers. If a big segment is on TikTok, that gives you a channel to reach them. A surprising 74% of consumers rely on their social media to make purchasing decisions, which means if you’re not engaging with loyalty members where they are, you’re losing sales. 

With so much creativity shown on social media, brands need to think just as creatively to use it for their loyalty programs. When Foot Locker rolled out a new digital loyalty program in 2014, it included a promotion that tied into its customer’s social media. “HORSE with Harden” invited loyalty members to post videos of themselves making difficult shots on a basketball court. They were instructed to post the videos on their favorite social media with the campaign’s hashtags. Foot Locker would then select the best videos and a live streaming event for members was scheduled where they could watch NBA star James Harden attempt the same shots.

Contracting with influencers to spread the news about particular items can also drive sales. Perhaps an even better idea is to create your own influencer. Use incentives to encourage loyalty members to share their brand experiences on social media. With 92% of consumers trusting what family and friends have to say about a product or service, word-of-mouth marketing is amplified through social media.

6. Add Depth to Loyalty

In the past few years, brands have had success with offering loyalty rewards that correspond to various levels of engagement. The more you shop at the retailer, the more rewards you receive by being elevated in loyalty club “status.” A classic example is Nordstrom’s “Nordy Club.” Those with top tier “Icon Status” receive a plethora of benefits, including early access to sales, unlimited free alterations, and a special 24/7 customer service number.

Engagement levels work because they not only offer a transactional gift, such as a discount, but they also create an emotional attachment. They’re saying, “You’re so special to us, we’re going to give you even more than what we give a regular customer.” It’s hard to turn down an offer like that, especially if it’s with a brand you like.

Make the steps of engagement gradually harder to reach, but not painstakingly difficult or so easy they are no longer exclusive. The customer should feel they’re making progress with their purchasing habits.

Ultimately, figuring out how to enhance customer loyalty is critical in today’s retail environment. A healthy, productive loyalty program keeps your best customers under your wing while reducing customer acquisition costs through other marketing methods. Plus, your loyalty program gives you exclusive data about those regular customers that help with future merchandising, marketing, and operations.

Create more loyal customers with a NewStore Consumer App, which can connect to your existing loyalty or membership program.

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