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Why brand loyalty is ultimately a by-product

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Why brand loyalty is ultimately a by-product


It’s no secret there are overwhelming benefits to retaining customers over acquiring new ones. However, research suggests two in five retail companies cite customer retention as their biggest challenge. Jamie Hoey of Wunderkind explores brand loyalty as a by-product.

With a looming recession, increasing cost of living pressures and interest rate hikes, Aussies are looking for cost saving measures and better deals. So – during these uncertain times, how can organisations remain competitive?

It actually may be useful to think about loyalty as similar to love. Love is a by-product of sustaining a relationship with healthy trust, intimacy, happiness and all of the other aspects of a healthy relationship. In the same way, loyalty is a by-product of offering great products and customer service, sustaining trusted connections, rewarding experiences, and personalised communication with your customers.

Knowledge is power 

Loyalty is a by-product of trusted connections. The more you know about your customers – from where and when they want to be communicated with, to how often and with what type of information – is key to turning one-offs into regulars. 

This might have been straightforward in the past, but data breaches, security nightmares, and concerns over the use of personal data have spooked consumers. 

Building a relationship with customers is now contingent on winning their trust and their data. Most customers are willing to give you their information if there is a clear value exchange, so don’t shy away from highlighting what’s in it for them, for example, a discount, free shipping, or access to exclusive content or events. The brands that build these relationships with their customers directly will reap the rewards. 

However, collecting and growing your first-party data is not enough — you need a customer identity solution that can activate it across channels and drive more revenue efficiently. For example, Identity-as-a-service (IDaaS) platforms enable marketers to drive revenue from your first-party data at an unprecedented scale. This works by allowing you to identify a greater proportion of your anonymous website traffic back to a customer profile in your CRM, so that you can then re-target them via owned channels with personalised, one-to-one messages.

Why loyalty programs are a by-product 

Loyalty programs are a great way to drive retention as customers are increasingly looking to these types of offers to help them through the cost of living crisis. Used right, loyalty programs not only drive revenue and sales, but assist marketers in gaining a wealth of approved first-party customer data to improve future communications. 

When an individual opts into a loyalty program, marketers can obtain detailed information such as a customer’s demographic, interests and location. Marketers can then leverage this approved data to offer hyper-personalised experiences, in-store and online. 

Towards the end of last year, The Australian Loyalty Association released its first-ever report looking into brand loyalty, the uptake of loyalty programs, drivers of loyal affinity and the perceived benefits. The report found members consider their loyalty program brands in the purchase journey (65 percent), shop more frequently (68 percent) and spend more with their loyalty program brands (60 percent). 

Points based programs are currently the most preferred loyalty program mechanism followed by spend based discounts. Additionally, the top benefits sought from loyalty programs are regular discounts, cashback based on spend, and full payment using points.

By understanding these key motivations, marketers can use approved customer data to nurture relationships and bolster loyalty. 

The role of personalised experiences

Gone are the days when marketers could use a one-size-fits-all approach to advertising and communication such as traditional ‘batch and blast’ or generic messaging. Not only is it inefficient from a conversion perspective, but irrelevant, overly frequent messaging can frustrate customers. 

Today, consumers have come to expect personalised communication, particularly via email, that reflects their product interests and preferences. Underscoring the value they get in return when sharing their data will ensure they sign up and stick around. Whether it’s an update to let a customer know their favourite shorts are on sale, or offering a two-for-one promotion on their favourite chocolate. 

Then, marketers must leverage the right technologies to connect the dots between the message and the customer. Your technology stack can deliver this hyper-targeted communication. Identity-as-a-service (IDaaS) platforms enable marketers to unlock unprecedented scale across marketing channels. Without being able to identify those customers with purchase intent, you can’t strategically tailor your messaging to the individual or close the sale – particularly if the customer doesn’t convert on the first visit. 

Exceptional brands stand out by maintaining deft messaging and a thoughtful understanding of their customer’s preferences and values. This experience creates a two-way value exchange, by which customers are getting what they want and organisations are increasing brand loyalty and ultimately driving sales.

With a looming recession, interest rates on the rise, and cost of living challenges, loyalty remains top of mind, and most customers will be shopping for fewer items, with fewer brands. 

Brands must keep in mind the necessity of truly listening to customers’ needs and wants. When faced with economic uncertainty, it’s more crucial than ever to ensure your marketing dollars aren’t wasted, so you can retarget and follow up with interested customers. 

Because ultimately, loyalty is a by-product of a successful performance marketing strategy.


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