Customer retention: locking in loyalty makes for many happy returns

These businesses took the time to come up with interesting new solutions to one of the oldest challenges of marketing: customer retention

For any sector, attracting customers is only half the battle. The real trick is in how to ensure they keep coming back for more. Turning new customers into loyal customers is the kind of challenge that benefits from an innovative and flexible approach. And it doesn’t have to cost the earth.

Here we examine a range of businesses from very different sectors which have taken the time to come up with interesting new solutions to one of the oldest challenges of marketing: customer retention.

Credit Jörg Weingrill

French cosmetics chain Sephora is a relatively new entrant to the international boutique scene, and went to great lengths to land with a splash. The sophisticated Sephora customer loyalty program rolls out a raft of personalized gifts to loyal customers; and it is this personalization of reward which stands out as a highlight in a fiercely competitive marketplace. Customers who sign up to the scheme receive annual birthday gifts, and the opportunity to preview free samples of upcoming lines. In addition, they are awarded a status label based on their purchasing history, with a mineral-based reward scale that runs from copper all the way through to amethyst. This upscaling approach encourages customers to spend more to get more back from the company. It’s a superior variation to the reward points bonus system, but loyalty tiers are closer to the “levelling up” dynamic that underpins computer gaming, a trope immediately recognisable to the tech-savvy internet generation that Sephora aims to woo.

Indeed, it is within the burgeoning sector of iGaming that many similar parallels can be found, and thanks to the increasing number of players competition has encouraged more forward-thinking approaches to loyalty programs. Popular online casino site mFortune leads the pack here with a no-deposit bonus to entice visitors to return to a panoply of casino-based virtual games playable across a variety of platforms. Whether the customer is accessing the site through an app on their smartphone or via a regular internet browser, this offer applies equally to all entrants. Again, there is a high degree of personalization available to coax customers into a VIP loyalty program, including invite-only hospitality events such as sporting events and concerts. Dedicated VIP Account Managers are on-hand to ensure the VIP program runs as seamlessly as possible and the end product of all this activity is an iGaming experience which drums up a strong thread of repeat business in the face of stiff competition.

London Starbucks
Credit c0t0d0s0

The American coffee titan Starbucks is and always has been the heavy-hitter of loyalty schemes and one of the first corporations on the block to actively investigate ways to keep and hold customer interest. The Starbucks rewards plan sets the model for how to do it – customers collect reward stars with every item purchased, and these can be swiped onto a loyalty card, or registered directly during store transactions through the Starbucks phone app. “Gold status” customers are rewarded with two stars for every dollar spent in-store and additional perks such as a gold-coloured card, regular “double-star days” and free in-store refills. The advantages for the regular coffee drinker are evident; customers accumulate star points without really having to go out of their way to collect them, and the process becomes pain free and integrated into the daily routine of picking up that coffee.

These three examples are but a broad sample of the many loyalty schemes businesses offer, but they do illustrate the importance of keeping the customer engaged with the brand of their choice. Corporate culture inclines towards depersonalization, yet customers want to feel their custom is important, valued at a personal level. A company that strikes the correct balance here can reap appropriate dividends.

The views, opinions and positions expressed by all Troy Media columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of Troy Media.
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