Loyalty Leadership: 4 Tips For Creating Return Customers

To run a successful business, you have to develop a substantial customer base, but more than that, you need a pool of reliable, high-volume return customers. Clients who make an occasional purchase offer only an insignificant lifetime value, especially when you compare the onboarding costs; it’s the loyal clients who put you well into the black.

Of course, even your best customers won’t return time and time again, unbidden. You need to encourage and reward their patronage in order to make the relationship mutually beneficial.

If you don’t, a competitor will inevitably steal them out from under you. In order to improve your business model by increasing your numbers of return customers, here are four strategies that have been proven to work — and won’t cost a fortune to implement.

1. Offer Smarter Discounts

Discounts are one of the most well-established ways to develop customer loyalty, but you have to leverage them in such a way that customers don’t merely shop when they have a coupon in hand. One way to do this is to offer limited-time promotions, and there are several ways to enact this strategy.

The most powerful time-sensitive promotions hinge on an initial sale. If customers fill out a pop-up form when they come to your site to receive a discount on their first purchase, make sure the code is valid only for a limited time.

The restricted time frame can push potential customers to make an initial purchase, after which they qualify for future coupons. This keeps the cycle going.

Another useful thing to remember with discounts is that you need to establish a baseline expenditure. Everyone wants to get something for nothing, of course, but that’s not good for you.

When you offer a coupon such as those on the Sign Bliss site, it should apply to a minimum purchase that still allows you to turn a profit and makes processing an order worthwhile. Any experienced businessperson knows that processing a coupon on a $5 purchase is more effort than it’s worth.

2. Use A Points System

Another surefire way to encourage loyalty while focusing those benefits on your most reliable customers is to offer a points program. Points systems are great because you can scale them in a variety of ways.

For example, you can opt for the model that allows more active customers to accrue points more swiftly, or gives those points greater value through the establishment of tiers. Leading beauty brand Sephora uses a tiered program, as does its competitor Ulta.

As an alternative, if your points are awarded through a per-dollar system like Starbucks uses, more active customers will earn more points anyway. The switch turned out to be a boon for the coffee giant’s customers.

Before the switch, a customer who bought a tall coffee every day received stars at the same rate as someone who purchased a more complex and expensive blended beverage. You want to reward customers based on the extent of their purchases, not just the fact that they make one.

3. Rethink The Incentive

Not all rewards for loyalty need to be tied directly to discounts. For example, gift cards can be a great incentive for customers who frequent your business, offer their time for surveys, or talk up your products on social media.

This is especially true when you provide gift cards to other businesses or accompanied by spending opportunities. Gift cards acknowledge that your customers have lives beyond your operation, so you might opt to give them a Visa gift card that’s good anywhere, or fund their Starbucks fix.

Another way to encourage customer loyalty is to tie loyalty incentives to an improved level of service or access. You might give loyal customers early access to products, add bonus items to their orders, or go above and beyond to solve problems or simplify their sales experience.

Depending on the size and nature of the gift, you might even be able to make it a deductible business expense.

4. Create Brand Ambassadors

Many firms expend time and money trying to build relationships with influencers who honestly have no relationship with their brand. These companies’ efforts would be better employed building customer relationships.

You can do better than that and leave these hapless outfits in the dust by turning loyal customers into brand ambassadors. The beauty of creating brand ambassadors is that the setup is mutually beneficial.

Ambassadors typically have a closer relationship with the brand and receive freebies for talking about your company, while you get knowledgeable publicity from someone who knows your brand well and has a network of people who already trust his or her judgments. It’s a reciprocal relationship.

You already have what it takes to create loyal customers; now you just need to fine-tune the supports. Ultimately, customer loyalty grows when people feel appreciated. Treat everyone how you’d want to be treated if you were committing your resources to a business, and you’ll be set for success.