Understanding Customer Loyalty: Why It Matters
Every brand is vying for attention and scrambling for that elusive repeat business. I know Iâve got about a hundred loyalty cards wedged in my wallet - and yet, thereâs only a handful of brands that Iâd actually go back to. There are plenty of brands I visit once - even though the incentives were exciting, they didnât encourage me to make it a habit.
If youâre looking to nurture customer loyalty, you need to have a solid understanding of what it means and why it matters. You want your customers to come back with their friends or family in tow - armed with their favourite stories about your brand and why everyone around them must support you. And well, if you look at your bottom line, youâll realise why encouraging repeat visits is crucial: loyal customers spend more and get you more leads.
One thing that most customers appreciate is when brands actively listen to what they want - and create custom perks based on that. Thatâs why knowing your audience really matters, because blanket rewards schemes rarely ever work. But more than customising the perks, itâs how you personalise the experience of those perks that really sets you apart - so donât shy away from letting every touchpoint feel tailored. More or less.
I think fostering true loyalty comes down to getting creative with your ideas and weaving those into an unforgettable experience for your customer. Sure, buy X and get Y free works but no oneâs going to tell their friends about it unless it comes with a particularly memorable experience or interaction. Loyalty is built on trust so take time out to foster those connections - perhaps by letting people bring in their furry companions if they shop at your store or leaving little post-it notes along with every order you dispatch online - find ways to build an emotional connection by creating little moments of delight throughout the journey.
The Psychology Behind Loyalty Perks
I think you probably agree, but loyalty is reportedly a pretty strange thing. Itâs one of those invisible values that you somehow just feel. Itâs trust and connection and sort of being able to depend on someone even when things arenât perfect.
It also becomes one of the largest drivers of repeat business for fashion and lifestyle brands. Itâs about capturing attention, yes, but itâs also about holding onto it and finding ways to make people come back for more. Thatâs where loyalty perks come into play, because they sort of act as a reward for coming back. And then that reward can drive even more loyalty.
Whatâs odd is that humans are fairly predictable creatures when it comes to rewards. You get a good reward (however that looks for you) and it increases the chances of you repeating what led to it in the first place. This means that brands who offer some kind of perk for coming back are getting their hooks in because that reward encourages people to buy from them again. There are quite a few psychology principles at play here - the sense of belonging, a connection, feeling good about being rewarded (especially if it comes with personalised suggestions), and knowing your continued business is valued.
It's all quite fascinating. I mean, who doesnât want their favourite brand to let them know theyâre their favourite customer. People are motivated by rewards and recognition.
Even if itâs not something as big as money off or an extra birthday freebie - simple things like free shipping or offering early access also work. But what matters most is actually showing up for customers when they expect perks and benefits (without overpromising) because not following through would break any sense of trust the brand may have built up so far.
Top 5 Loyalty Perks That Drive Repeat Business
Itâs a bit of a clichĂŠ in fashion retail that everyone loves a reward. Except, well, itâs true â but only if you do it right. Thereâs quite a few more insipid loyalty programmes around than there are genuinely exciting ones, I think.
Letâs start with what really gets people going: early access. Shoppers get to feel as if theyâre part of the fashion glitterati and part of something exclusive simply by making the effort to be loyal to your brand. Itâs sort of nice too when they feel as if theyâre part of a secret club, because the sense of belonging makes them want to come back for more. Next on my list is rewards - obviously.
But what works best is when itâs really tailored, because then your customers know that you care about them and not just their wallets. That brings me to something else entirely - events. Nothing does brand affinity better than an event where your customers can connect with each other while building positive associations with your products - and these donât necessarily have to be offline anymore. Most fun online events are games-based or shopping-based or let participants interact with some aspect of the brand that helps them get to know it better.
Finally (and this seems like a no-brainer), but discounts work best when given exclusively to some segments - like students. Or employed mothers or nurses or anything else you can think of, really. In recent years, though, what has become more interesting are somewhat complementary rewards - such as an offer from a different brand that you can give for free without tying it to purchases on your own website or store at all.
I wonât lie; brands are starting to run out of ways to excite shoppers into repeat visits with loyalty perks that actually work now and I donât see a problem with it at all. Seems like weâve plateaued on creativity here (although experiential rewards are often unexpected and therefore fun) and perhaps soon enough weâll have something that shakes things up again.
Case Studies: Brands Excelling in Customer Retention
Loyalty perks can be a bit hit or miss, especially in fashion. Some brands seem to nail it though. Think The Iconicâs âPlayâ program, Seed Heritageâs VIP tiers or even thrifty-but-flashy Sheinâs points system - they all appear to have found what resonates with their shoppers and go all in.
The way I see it, the iconic is quite the modern leader in this space, curating an exclusive âplayâ program that gives members early access to sales and extra discounts, free delivery and returns, plus a $20 voucher just for signing up. More or less. Seed Heritageâs loyalty club has three tiers that give you better and better perks as you spend more and more - one of which is a coveted limited edition candle. Then you have Sheinâs points-for-engagement model where you get points for everything from shopping to reviewing products and even checking in on the app.
See. Quite the variety of approaches even when theyâre all trying to do the same thing - keep customers coming back for more.
I think itâs rather interesting how these programs work so well for different segments of the fashion market despite being so fundamentally different in how they work. It almost seems like most brands donât give enough thought to understanding who their ideal customer actually is or what they want from a rewards program. All that said, I find myself wondering if weâd be seeing more success stories if brands took their time to ask their customers what perks they want instead of running off with ideas the competition tried first. Or maybe that would backfire.
Either way, it seems like loyalty programs are hardly ever here to stay so long as brands listen up and play their cards right.
How to Tailor Loyalty Programs to Your Audience
You know when you enter a store and the rewards program screams âfor someone elseâ. Happens rather often, I think. Nothing disconnects a customer like a one-size-fits-all approach.
Seems like loyalty programs are best when they feel like theyâre made for exactly that customer. It appears sensible. People want to feel seen. And with so many options, programs need to feel as personal as possible.
Some businesses use data to collect information about their regular customers and create what looks like custom reward programs. This works better because people already know what perks theyâre likely to receive. But then thereâs also the fairly new way of asking customers what loyalty rewards they want. And then giving them those choices and preferences in the way of their own selection of reward perks.
This works because it feels like control and empowerment, which is usually so precious these days. So, all in all, tailoring a loyalty program comes down to knowing who your customers are and understanding what makes them tick. Of course, people can slightly be asked that but personalisation works because it says âI see you. â And thereâs just no denying how lovely that can feel - most of all in the context of an ongoing business relationship between a customer and a brand where delight is expected at every stage, whether or not the person shops very often or not at all.
Measuring the Success of Your Loyalty Initiatives
Itâs like this, isnât it - you put together the most thrilling loyalty perks you can imagine, roll them out with a bit of fanfare, then thereâs that tiny breathless pause as you wait for the results. Of course, we all chase those numbers - redemptions and repeat purchases are fairly the obvious ones. But after youâve crunched the numbers and raised your eyebrows at click rates and footfall, thereâs more to explore. The way I see it, the truth is that loyalty programs arenât just about cold hard profit margins.
Any half-decent operator knows that. Youâre cultivating a sort of closeness with your customer base, getting them used to a certain feeling in your shops or on your site - warmth, reliability, care. That doesnât show up clearly in the reports but it matters greatly when brand perception enters the picture.
You do get a sense when somethingâs working and when itâs not (unless youâre deep in denial). And no matter how many rewards you offer or gifts you send out, people will come back if they genuinely like what they see - not because of an instant discount but because they feel that sense of belonging each time they engage with your brand. Success is such a double-edged sword. You could have massive buy-in on paper but still lose out to competitors in terms of reputation.
Or you could measure revenue spikes but not realise just how much people are rarely talking about you to their friends or sharing details online - all indicators of successful loyalty perks that go far beyond statistics. At the end of the day (sorry), if it feels good and does good for both customers and your business, chances are sort of youâre winning at this game.