Loyalty Marketing: the Secret Regular Revenue

What is Loyalty Marketing?
Loyalty marketing refers to the tactics used by companies to attempt to secure returning customers by offering them promotional deals and free goods or services, or otherwise rewarding patronizing their business in a repeated fashion. In general, the idea is to show appreciation for customers who consistently use your brand. This might seem limiting, or like it doesn't put enough emphasis on reaching new customers, but studies have shown that although only around 12-15% of customers are loyal to one retailer, those customers make up between 55-70% of sales.


Why invest in loyalty marketing?
The most obvious reason to employ loyalty marketing is that it can potentially boost your sales. Lots of research has shown that putting at least some emphasis on retaining customer loyalty has a positive effect on a company's growth. Additionally, loyalty marketing is a lot less expensive than marketing aimed at new customers, which typically makes up a significant portion of a company's marketing budget. Finally, customers like loyalty marketing, and companies that use a lot of it often develop a positive reputation as the kind of company that treats their customers well.

Amazon Prime – Does It Right and Gets Paid for It
Amazon Prime is a great example of a company that has used loyalty marketing to good effect. The service gives users free two-day shipping with no minimum purchase for almost all items for only $99 per year. Amazon actually loses between $1 and $2 billion per year by featuring this service, but makes all that money back (and more) because the average Prime user spends more than twice as much money yearly than the average non-Prime user.

Smart to combine with social media, email, and gamification
No marketing tactic is perfect on its own, and loyalty marketing is best used when combined with other techniques of mass marketing, such as social media, email marketing, and gamification. The idea behind combining these with loyalty marketing is to build a consistent base of customers who are invested in your business and willing to subscribe to an email or social media service that allows you to deliver promotions and deals to them in order to secure more business.

Business Marketing success is a team activity. Any single marketing tactic alone won't make your business succeed, which is why you’ll want to combine it with other forms of web marketing. Search engine optimization and content management strategies and social media are effective methods of promoting your website and generating traffic for it. Additionally, analytics are an important tool for assessing the strategies you've employed and maintaining your web presence's competitive edge.

Customer Retention and Loyalty Marketing is one of our specialties’ at Visible Strategies Digital Marketing LLC.

We regularly include Customer Retention services as part of the CTO Services package we provide to our clients.

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