What is loyalty marketing?

In recent times, loyalty marketing has become hot topic amongst marketers worldwide. More companies are turning to independent research institutes like the Bond Loyalty Report and Gartner for insights into consumer behaviour and specifically into the drivers of brand loyalty.

Huge brands understand that customer loyalty is essential for business survival particularly in these times of intense global competition facilitated by the internet commerce and the huge conglomerates like Amazon, spearheading this revolution that has become a new normal moreso in a global pandemic. Smaller brands are also beginning to pick up on this and the push to customer retention has skyrocketed.

Loyalty marketing is an approach to marketing characterised by strategies, rewards, services and incentives aimed at improving customer retention and life time value.

Why implement a loyalty marketing strategy?

There are many reasons to consider a loyalty marketing strategy for a company, whether a sole-proprietorship, small, medium or multimillion company. First, consider the following stats:

  • Companies with elaborate loyalty marketing campaigns grow their revenue 2.5 times faster than their rivals in the same industry
  • Consumers who participate in loyalty programmes are 77% more likely to keep patronizing that brand
  • According to Hubspot, a business is 60-70% more likely to sell to an existing consumer compared to the 5-20% chance of converting a new prospect

Loyalty marketing strategies should be implemented for various reasons including increased sales, higher customer retention; they boost word-of-mouth (WoM) marketing, attract new clients, convince prospects and embellish your brand image.

What other benefits do you think a loyalty marketing strategy can bring? Leave a comment below

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