Brand Loyalty is Key to Driving Retail Business and Customer Engagement

Brand Loyalty is Key to Driving Retail Business and Customer Engagement


Connection is key to building repeat business with retail customers and extends beyond the in-store experience. Capturing customer data to reward purchasing behavior, understand buyer trends, and communicate your brand purpose is monumental, especially when business needs to shift. 

Watch our video to learn more about how to drive business with customer engagement and brand loyalty.

Loyalty programs, which offer incentives like discounts and rewards as a way to attract and retain customers, are a great way to build connection with your customer. If you want to succeed as a retailer, it’s important to understand which loyalty features are most effective for driving your company’s key performance indicators.                 

Generally, a loyalty program should help: 

  • Keep the customers you have already
  • Attract more of the right customers and increase retention
  • Understand your customers and their buying behavior  

The Benefits of Loyalty Programs

It’s important for retailers to be able to stand out from the competition. According to Bond’s The Loyalty Report, an average person is signed up for 14 loyalty program memberships – but is only truly active in 6-7. Customers are brand advocates and will stick with you even when the competition is offering a bigger discount. 

Loyalty programs can also be key to turning one-time shoppers into long-term customer relationships. Consider these statistics related to loyalty programs:

Incentives are not only for the new or existing customer. With data insights from your loyalty members, there is always an opportunity to win back a lost shopper. For example, with customer purchase history, you can run a campaign for the last time customers have shopped in a set criteria, such as the past six months in specific ZIP code, and then send a coupon or gift card to get them back into your store. 

Build Relationships with Your Customer

Building a solid relationship with your customers from the beginning can reap many benefits. Invesp Conversion Rate Optimization shows that more than half of surveyed customers shop once per month where they already have an existing relationship with a brand through a loyalty program. Brand Keys shows that even a 7% increase in loyalty can boost lifetime profit per customer by as much as 85%. 

Treating customers like your friends can improve loyalty and sales. According to the Friendship Formula, there are four aspects to developing a friendship:

  1. Proximity – Related to customer loyalty, proximity means that customers should be able to interact with your brand through all channels, including your store, website, social media, etc. These channels should be seamlessly tied together with a sound omnichannel strategy. Last year, Wirecard reported 91% of consumers think omnichannel experiences are important or critical. And almost 30% think that companies should be “where I want, when I am ready, and communicate how I expect”. That same report mentioned 70% of consumers are currently managing rewards and incentives on a mobile device or mobile application.
  2. Frequency – Increasing the frequency of how often your customers interact with your brand should be at the core of every loyalty program. Developing touchpoints outside of the buying cycle is important as well because true loyalty cannot be formed if customers are only engaged when they buy something.
  3. Duration – It’s important to design your loyalty program with longevity in mind. A common strategy is to start out with a basic loyalty program and then expand it to include gamification, customer profiling, and holiday campaigns. 
  4. Intensity – Customers typically remember the experience that preceded a purchase rather than an individual purchase transaction. These can be experiential rewards, VIP perks, special interest groups, etc.

Understand Your Loyal Customers

As discussed in ArcherPoint’s Retail Tribe Talk webinar, Pivoting to eCommerce, it is important to know what and when your loyal customers buy. Consumers are routinely shopping and socially engaging, which provides data insights into their purchases and behaviors, giving retailers the ability to forecast and sell more merchandise. 

This type of data also helps uncover shoppers who haven’t shopped with you in a while and allows you to encourage them to come back. You might even be able to adjust your stock and inventory to suit your repeat and more profitable customers. 

Data collection takes loyalty one step further by ensuring consumers are receiving relevant information based on their wish lists, purchases, returns, which store or channel they shop at most, etc. Messages or campaigns can then be tailored directly to that member. It provides a feeling that the retailer knows and is talking directly with the customer.  

Offer Loyalty Program Incentives

A customer loyalty program encourages customers to keep coming back to you. A loyalty incentive program goes one step further, offering them a reward for their repeat business. Incentives can include:

  • Simple transactions. For example, making transactions quicker and easier is becoming a staple of many loyalty programs. This includes free shipping, extended return periods, a point system, visit-based rewards, referral program and more. 
  • Personalization. According to online survey over 56% of consumers value personalized offers in the retail shopping experience.
  • Recognition. Recognition loyalty, which provides a highly personalized and curated customer journey, makes it difficult for your competition to offer the same reward.  For example, many airlines and hotels offer loyalty programs based on tiers. This approach is often synonymous with status. 
  • Badges & challenges. Like tiers, badges symbolize status, while challenges prompt. Great for driving small but incremental actions.
  • Rewarding hobbies and values. With the help of modern technology, retailers like sport and fitness apparel are able to reward customers who go for a run via Fitbit, or use smart tagging to identify members who actually wear the product, like Tommy Hilfiger.  

Regardless of incentive type, it’s important to keep the program simple for a seamless experience and easy understanding. It is vital for staff to understand the details of promotions and how to earn rewards and redeem accounts.

To learn more, join our quarterly retail newsletter group by subscribing via the form on this page or talk to one of our sales consultants today.

Trending Posts

Stay Informed

Choose Your Preferences
First Name
Last Name
Subscription Options
Your Privacy is Guaranteed