Cultivating customer loyalty has always been a key component of a retail marketer’s playbook. Brands that are able to successfully accomplish this goal see 306% higher lifetime value among loyal customers, reporting higher revenue and repeat purchases—even after a less than optimal brand experience. However, loyalty has been more challenging to build in the current macroeconomic climate. Let’s take a look at headwinds retailers are facing.

Brand Switching on the Rise

Customers are less loyal than ever before. Recent data shows that 71% of consumers say they switched brands at least once in 2022. Several macroeconomic factors have contributed to increased customer fluidity, creating a ‘perfect storm’ for retailers:

• ​The pandemic: Restrictions, shortages, and the shift to digital prompted customers to try different brands. Consumer behavior evolved, shifting from brand affinity to product availability.
• ​Supply chains: Disruptions during the pandemic led to prolonged out-of-stock merchandise. In the past three months alone, over 80% of consumers have bought from a new brand because the products they wanted were out of stock.
• ​Proliferation of choice: The shift to digital has made it easier for customers to find the same or similar products elsewhere.
• ​Inflation: Rising costs have forced some consumers to trade down instead of purchasing from preferred brands to save money.

Rising Costs of Customer Acquisition

The cost of acquiring new shoppers has increased in recent years, further validating the need to prioritize retaining and growing existing customers. In 2013, advertisers spent an average of ~$9 to acquire each customer; this has increased to ~$86 per customer across industries for e-commerce businesses.

The Loyalty Antidote

While retaining customers may be more challenging than ever, retailers that prioritize building brand loyalty through consistent personalized experiences will ultimately win out amongst their competitors.

How can retail marketers foster lasting brand evangelism that hinges on an emotional connection? It boils down to five tactics:

• ​Effective onboarding
• ​Consistent, bite-size reminders
• ​Highlighting innovative earn and burn mechanisms
• ​Pairing short-term loyalty wins with long-term relationship drivers
• ​Infusing personalization into every touchpoint

Optimizing the Loyalty Lifecycle

To leverage all five brand advocacy tactics, see how they can be applied to the loyalty lifecycle in these practical examples:

Post Acquisition

Best-in-class brands activate growth and loyalty strategies immediately after a customer opts into an email marketing program or makes a first purchase.

For example, a footwear brand might host a dynamic banner with clear tasks personalized to the customer’s stage in the loyalty journey. New customers are prompted to join the loyalty program; returning customers can validate their account or log into their dashboard to access benefits and free shipping.

Hit the ground running by driving loyalty from the very first send using personalized, updatable messaging.

Onboarding

As the loyalty landscape has matured, consumers are participating in more loyalty programs than ever, making it easy to forget the value to be gained from each program. It’s key for retailers to set the stage for a lasting customer-brand relationship by consistently educating consumers about their program—and how they can get more out of it.

For example, Barnes & Noble created a rotating benefits banner for their premium members to remind them of available benefits. Using time-targeting, they displayed a new option every day of the week, such as free shipping, free food or beverage from the in-store cafe, or exclusive deals.

Retention

After customers are fully onboarded, retailers enter the long game of retention. At this stage, effectively communicating program drivers—such as innovative earn and burn options—will help ensure that customers remain regular participants of your program.

For example, At Home added an animated progress bar to their campaign, driving customers to reach VIP status. Data visualization tactics like this are a simple but effective way to drive customers to the next milestone, whether that’s by offering an in-store reward or a higher loyalty tier.

Combining personalized recommendations with redemption options can show customers the enticing ways they can access their rewards. A brand might use their site API to send personalized product suggestions based on the customer’s balance, spend affinity, and trending redemptions.

Winback

No matter how successful your loyalty program is, the need for a winback strategy is inevitable. Whether your customer is at risk or lapsed, marketing messaging that nudges them in the right direction is sure to re-engage them.

Year-in-Review campaigns are one of the best ways to drive home unique brand value and reinforce loyalty. For example, New York Road Runners sent marathon participants a rundown of their personalized stats, including runs completed, miles raced, and distances ran, along with race locations displayed in a map of New York City.

Loyalty Love Loading

These are a few of the many ways retailers can build loyalty by making each step of the customer journey feel more human and intentional through personalization. It’s the combined effect of these thoughtful nudges over time that can help customers feel more connected to your brand.