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Buyer Loyalty: How to Build It, How to Keep It, and How to Destroy It

Loyalty, AI, brand marketing, Artificial Intelligence

Buyer Loyalty

Buyer loyalty starts with initiating a customer and involves understanding who your customers are and what they want and need. Buyer loyalty can be described as a binary concept – either you have loyalty from a customer, or you don’t. On the whole, buyer loyalty can be assessed in aggregate, but it is fundamentally a customer-specific trait. A marketer wants as many loyal buyers as possible.

The opposite of that is buyer disloyalty. In general, for consumer businesses, 20% of your customers, or buyers, will be loyal and contribute 80% of your sales and profits. The key is maximizing that percentage with the understanding that it will never be 100%. Even small percentage changes, such as converting enough customers from disloyal to loyal, can have a major impact on a company’s profits. That’s why so many companies are investing in loyalty programs. But do loyalty programs really create buyer loyalty?

CRM & Database Marketing

To build buyer loyalty, it is important to gain a deeper understanding of one’s customers or shoppers and the various data around a customer’s interaction with your brand. If you don’t have a customer database starting with names, emails, addresses and basic preferences, now’s the time to start. It’s the cornerstone for creating and building buyer loyalty. However, having a database doesn’t equate to buyer loyalty. It’s how you use the data to create better customer experiences, online or in your stores and in all possible marketing communications.

So How Do You Build Buyer Loyalty?

Most customers value time and money. If front-line employees can help them save both, that’s a great start to build buyer loyalty. Alternatively, there are examples of technology filling that role for people. Amazon.com would be an example of this, given it lacks any human touch whatsoever but drives buyer loyalty through easy-to-use shopping applications, great prices and wide product assortments. Furthermore, relationships are built and strengthened based on trust. If customers trust the advice of the brand or its employees, everybody wins.

So how can brands build trust with customers?

It’s all about personal touch, adding value, and solving customer problems.

Personalization of the customer experience goes beyond data, marketing and technology. Most retailers aren’t using their data to deliver personal experiences because they lack the human touch. It’s not that hard.

As a potential solution, retailers in certain categories have invested in personal shoppers to deliver this level of personalized service and experience. Nordstrom’s does a fantastic job at this. Hair stylists in beauty salons know intimate details about a customer that go way beyond hair color. In each case the customer trusts the people who represent the retailer. Beyond the interactions a customer has with a brand, buyer loyalty also exists where customers feel a shared value-system with the brand, often specific to a social or other cause. The emotional connection customers feel with a brand and the brand’s mission will also help fuel buyer loyalty. This, however, is not a replacement for delivering a great product or service that helps buyers feel smarter, save time or money, among other things.

Create Buyer Loyalty without Needing A Loyalty Program

Brands often thinking that the best way to build customer loyalty is to create and launch a loyalty program for customers. Customers can sign up and get rewards, such as points, for shopping. Loyalty programs are big business but don’t often solve the underlying problem. There are so many ways to build buyer loyalty without the gimmicks. If marketers focused on understanding what customers buy, what they won’t buy, and how they want to be reached (communication preferences like email, SMS, Facebook, etc.), marketers can expose customers to special offers and merchandise at the right time for that customer.

This is the big area marketers need to focus on getting right for building customer loyalty. Blasting coupons out to millions of people at a time is a far cry from what most customers want. You can reward loyal shoppers with coupons and offers and delight them by helping them save money when they don’t expect it. Even the best designed loyalty programs hurt buyer loyalty because they can be confusing to understand and make customers jump through hoops.

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Buyer loyalty can be created with genuine and effective application of basic principles that have been done by human beings for a long time. Technology, data and personalization solutions can help automate and scale these key principles, but only if applied the right way as part of the right strategy. Often, in most businesses, human beings are the difference-makers that create buyer loyalty. Technology and data, when applied thoughtfully to complement the human element, can drive profits and long-term business results.

Interested in more effective ways for building customer relationships?

If you are interested in discussing how CRM programs and customer loyalty strategies can be leveraged to personalize the customer experience and build buyer loyalty, please contact us today. We partner with forward-thinking marketers like you to bring strategic thinking and digital innovation that build the type of customer relationships that empower meaningful growth.