The cost of acquiring new customers can be jaw dropping. Brands often take a loss on a customer’s first (sometimes second!) order just to bring them into their ecosystem. This is why nurturing customer relationships to encourage repeat purchases is so important.
Getting existing customers to spend more with your brand is far easier than finding new customers. We’ll share 10 of our favorite customer loyalty strategies here in this guide so you can start increasing retention for your own brand. Here is a quick look ahead:
- Points-based rewards system
- Offer VIP tiers
- Personalize rewards based on purchase behavior
- Referral programs
- Omnichannel loyalty
- Gamification
- Exclusive access to events or products
- Offer subscription-based perks
- Reward non-purchase activities
- Flexible redemption options
We’ll share a few great examples of brands using strategies to increase customer loyalty as well if you’re looking for inspiration. You’ll also learn how you can actually put these tactics into practice yourself today with Rivo, the #1 Shopify loyalty program.
What is customer loyalty?
A loyal customer is one who consistently supports your brand after their first purchase. They choose you over the competition even if you aren’t technically the best option.
Despite pricing or product nuances, they align with you - and that has far-reaching implications and a real impact on revenue.
But true customer loyalty isn’t just about earning repeat purchases from a customer. It’s a deeper connection in which the customer advocates for your brand through word-of-mouth, leaves positive reviews, engages with different social media segments, and more.
Customer loyalty is sometimes confused with customer retention, but the two actually speak to separate things. Customer retention looks specifically at the rate at which your customers continue to use your products or services over time - it’s more monetary in nature.
This is to say that increasing customer loyalty leads to improved customer retention - along with an array of other benefits. Let’s take a closer look at why you should place an emphasis on improving customer loyalty.
Why customer loyalty is so important
You might already know how much more cost-effective it is to nurture existing customer relationships compared to creating new ones. If not, here’s an eye-opening figure: it can cost five times less to retain a customer than to acquire one!
Beyond cost savings, loyal customers spend more over the course of time. This is known as customer lifetime value (LTV) and it’s an important metric to keep an eye on as you start putting customer loyalty techniques into practice.
Loyal customers are a free source of promotion, too. They use your products out in the world and tell friends, family, and colleagues all about your brand. It’s hard to tie an ROI to this word-of-mouth, but make no mistake - it’s valuable.
Retention also provides stability in an increasingly competitive market where consumers have more options at their fingertips than ever before - not to mention how much more uncertain the digital advertising landscape is becoming.
We watched countless brands go belly up when iOS 14 transformed ad targeting and made it increasingly difficult to connect with new potential customers. Being able to turn to your existing customer base can keep you afloat in tumultuous times.
Our favorite customer loyalty strategies: 10 ways to increase customer retention for your brand
There are countless creative strategies to increase customer loyalty, from offering incentives for repeat purchases to rewarding referrals. Here are 10 of the top customer loyalty techniques we see used across the 7,000+ brands that trust Rivo as their platform of choice.
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Points-based rewards system
It doesn’t get much simpler and more effective than a traditional points-based rewards system. Customers earn points for every purchase or specific action, such as leaving a review or following on social media.
They can then redeem these points for discounts on future purchases, free products, or other perks. The system does a great job of keeping customers engaged with clear incentives for coming back and being an advocate for the brand.
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Offer VIP tiers
Loyal customers take pride in their standing with your brand. They want to be your best customer. You can play on this emotional desire by creating VIP tiers for your best customers. This adds a layer of exclusivity to the loyalty program.
Higher tiers can unlock more and more enticing benefits, from early access to sales, free shipping, or exclusive product drops that they don’t want to miss out on.
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Personalize rewards based on purchase behavior
One of the most important customer loyalty strategies revolves around personalization. We have found that customers who receive personalized experiences are not only more likely to purchase from you again, but they’re eager to spend more.
You can use this to your advantage by tailoring rewards and offers based on specific customer data. Rivo makes this easy by pulling all existing customer data from Shopify into the platform so you can start seeing how. From there, you can create custom rewards.
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Referral programs
Rivo isn’t just the #1 customer loyalty program, it’s also the most intuitive Shopify referral program. The two features go hand-in-hand, as referrals happen to be one of the most effective strategies to increase customer loyalty.
This incentivizes your loyal customers to spread the word about your brand by offering them points or discounts for every friend they refer. Not only does it build loyalty, but it brings new customers into your ecosystem simultaneously. Talk about two birds, one stone!
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Omnichannel loyalty
We see so many brands making the mistake of only rewarding loyalty on their storefront - you should incorporate customer loyalty strategies across every possible touch point.
This creates a seamless experience for customers as they can earn and redeem points whether they’re shopping online, in-store, or even via a mobile app.
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Gamification
Humans are drawn towards games, and this can make your loyalty program more engaging and fun. Translation: more lucrative! Gamification techniques can range from challenges to badges or milestone rewards.
Each of these tactics encourages customers to participate and feel accomplished when they reach certain goals. They’ll continue looking for ways to reach the next level. In other words, they’ll always be looking for more ways to support the brand.
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Exclusive access to events or products
People love feeling like they’re part of something special, and you can use this to your advantage in building out your customer loyalty program.
Offer exclusive access to limited-edition products, members-only events, or early sales to make customers feel valued and appreciated. This will slowly but surely build a deeper emotional connection between your brand and your customers.
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Offer subscription-based perks
One of the easiest customer loyalty strategies to integrate is one centered around subscriptions. It makes a ton of sense for brands that sell something customers need to come back for, like a supplement, service, toiletry, or any other disposable item.
It doesn’t have to be a discount on the item itself, either, although that is the most practical approach. It could be free shipping, for example.
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Reward non-purchase activities
Don’t just reward customers for spending money. You want to create a more authentic relationship with customers that extends beyond purchases.
This could entail offering rewards for actions like writing reviews, posting on social media, or even just opening your marketing emails.
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Flexible redemption options
This is an overlooked aspect of running a thriving loyalty program. You might be able to use data to assume what will make the most sense for a customer’s reward option - but why not give them the freedom to choose?
Whether they want discounts on products, store credit, or donations to charity, customers will love having more control over how they use their points.
Examples of brands using unique strategies to increase customer loyalty
There is no need to reinvent the wheel. You can try any of the customer loyalty techniques above or look to some of the most successful brands in the world as inspiration. Here are a few real-world examples we find particularly intriguing:
Kitsch
Kitsch is a global beauty powerhouse that uses the Rivo loyalty platform, and they’re doing a dang good job with it. Just check out their loyalty page and see for yourself!
You’ll notice how clear they make everything, from the sign-up process to what customers can do to earn rewards and what they can be redeemed for. They even provide links to encourage customers to take action right away.
Toms
Toms is a shoe brand on a mission to leave the world in a better place, using customer loyalty to make it happen. Toms donates a pair of shoes to someone in need for every pair purchased.
It’s known as the One for One® model and goes to show that when a brand’s values align with its customers, it can foster a deep sense of connection and loyalty.
Casper
This DTC mattress brand is famous for its 100-night sleep trial that allows customers to invest in a better night’s sleep with peace of mind. The program sets the tone for trust from the start, but it’s what Casper does after the fact that really makes a difference.
The company follows up with personalized content and product recommendations based on customers’ preferences, creating a loyalty loop that keeps people coming back for accessories and sleep products.
Sephora
One of the best examples of customer loyalty strategies at play for a retail brand can be seen in Sephora. The Beauty Insider program is a type of VIP system in which customers earn placement in one of two tiers: VIB and Rouge.
The perks become more enticing at each level. With more than 25 million members globally, the program is clearly working to keep customers engaged and coming back for more.
Figure out your current customer retention rate (CRR) to gauge performance
Before you start putting any of these strategies to increase customer loyalty to the test, it’s worth taking a step back and figuring out your current customer retention rate (CRR). This will help you gauge just how much your efforts are moving the needle.
CRR is a fairly simple metric to calculate. There are just a few pieces of information you’ll need:
- Customers at the start of the period
- Customers at the end of the period
- New customers acquired during the period
The equation is straightforward. Subtract the number of new customers acquired during the period from the total number of customers at the end. Then, divide that result by the number of customers at the start of the period. Multiply by 100 and you have your CRR.
Let’s say you had 500 customers to start the period and ended with 600 customers. You gained 150 new customers during the period. This would be a really impressive CRR of 90%.
Now, is 90% feasible for all businesses? Not necessarily. You should look up the benchmarks for your industry and business model to set more realistic targets. That being said, we have a solution that can help you boost CRR and implement any customer loyalty strategies.
While there are plenty of other solutions available, Rivo offers better capabilities at a more affordable price with better customer service. What more could you ask for? See how we stack up to the alternatives:
Start setting up your loyalty program with Rivo today to increase customer retention while building stronger, long-lasting relationships with the people who keep your business thriving.
Final thoughts on the top customer loyalty techniques
With countless customer loyalty strategies at your disposal there is no excuse for neglecting this aspect of your brand any longer. We’ve shared ways to nurture relationships with customers and start encouraging more purchases, all while turning them into your biggest advocates.
Our support staff is always available to walk you through setting up any customer loyalty techniques you have in mind, too. We’re here for you every step of the way.
