Brand Storytelling Guide
Shiny new customers can come with a hefty price tag—six to seven times the cost of simply retaining current customers. Despite this, customer retention strategies often get sidelined in the alluring pursuit of attracting first-time shoppers. But, a CX strategy designed to win brand loyalty from all customers can serve as a potent tool for nurturing lasting relationships, maximizing customer lifetime value, and fostering a sense of trust that extends beyond the initial transaction.
While it's true that landing new shoppers is essential to growing your brand, one-time buyers don't carry the same value as loyal customers. In many cases, loyal customers are five times as likely to repurchase, four times more likely to refer others, five times as likely to forgive any brand mishaps, and seven times more likely to try a new product.
And today is the golden age of customer loyalty.
Amid the world's rapid changes during the pandemic, seventy-five percent of American shoppers altered their brand preferences, proving that good customer retention strategies are more important than ever.
COVID-19 disrupted customer experience as shoppers flocked to brands demonstrating they care about their well-being and offering personalized messaging. Instead of sticking it out with past brands, shoppers sought out brands showing empathy toward their customers. A recent study about brand loyalty and customer engagement during the post-COVID era found that seventy-four percent of consumers are more likely to turn to brands that showed concern and provided excellent customer care during the pandemic.
What COVID-19 proved was that brand loyalty is never guaranteed—it always needs to be earned. Here are five customer retention strategies to help you do just that.
If you want to improve customer retention, a rewards program is a straightforward way to attract new customers while strengthening your connection with loyal ones. One way to use loyalty programs is to incentivize repeat business by offering future discounts, exclusive access to new products, or freebies. And the best part is these reward programs can be tailored to fit any budget or business model.
Sephora's Beauty Insider Program is a strong example of this customer retention strategy. This popular program boasts more than 25 million members and offers reward points for every dollar spent. Once customers have earned enough points, they can spend them on free samples, gift cards, or discounts. Plus, Beauty Insiders get access to exclusive events and first access to new products.
Everyone likes free stuff, but loyalty reward programs also offer a chance to build customer relationships and make them feel valued for their business. And the Beauty Insider Program has paid off for Sephora, which reports that its loyalty club members make up eighty percent of its annual sales.
Sometimes, a sure way to encourage your existing customers to return is by offering them something extra to refer their friends. Like loyalty reward programs, referral programs are a great way to strengthen customer satisfaction and offer paid perks to your most loyal shoppers. Referral programs leverage word-of-mouth marketing and create a sense of community within your consumer base. Plus, they show that you value customer loyalty and are willing to reward them for it.
Take Dropbox, the online storage service, and its referral program. Customers that refer others receive an extra 500 MB of free storage space—plus the new users get 500 MB, too. Everyone wins something. According to founder Drew Houston, Dropbox's referral program increased signups by sixty percent in 2010, with referrals accounting for nearly thirty-five percent of their daily signups. Ultimately, referrals helped this scrappy startup transform into a publicly traded company worth over eight billion dollars.
It should be a no-brainer that customer experience strongly influences customer loyalty. But remember that an excellent customer experience doesn't require bells and whistles, just the basics of treating customers well. Eighty percent of customers say speed, knowledgeable help, convenience, and friendly service are the key elements to a positive customer experience.
So, make sure that your customers have a positive interaction at every touchpoint with your brand and are treated with respect and appreciation. Take a hint from a brand known for its amazing customer experience, the online shoe retailer Zappos.
Zappos has made speed and convenience an essential part of its CX strategy. Zappos' unlimited, 365-day free returns policy has been a hit with online shoppers. The returns process is easy and hassle-free, which has helped Zappos foster trust and loyalty. In fact, what they found out when they first launched their return policy was that their best customers had the highest return rates (and they were also the ones who spent the most money.) The lesson from Zappos is that investing in services that make customers' lives easier can go a long way in growing loyal clientele.
While the products and services you offer get customers in the door—research shows that eighty percent of customers report that the experiences they get from a company are just as important. Customer engagement serves as an arm of customer experience, helping brands build relationships and trust with their customers—leading to repeat purchases.
Marketing strategies for engagement can include social media contests, webinars that teach customers about a specific topic, and emails that tell stories and showcase customers' successes. Customer engagement means communicating in a way that's empathetic, genuine, and authentic—creating a sense of community around your brand.
Take Glossier as an example—the beauty brand engages its customers with an active presence on social media. It uses aspirational realness and shares user-generated content that showcases the importance of consumer-brand collaborations. Glossier also values receiving customer experience insights through social media and encourages customers to contribute ideas for new products. This engagement has built a strong, loyal following, leading to it becoming one of the top makeup brands among young women and a billion-dollar company.
Asking for feedback isn't simply about getting answers—it's about showing that you value your customers and their opinions. Plus, it can help you identify gaps in your services and ways to improve.
What's the best way to collect feedback?
You can use surveys, reviews, social media polls, interviews, and focus groups. But the most important thing is not to let your collected responses sit around and gather dust. Once you have this feedback, be sure to take action. Applying customers' suggestions can have a lasting impression and help in retaining customers.
Apple isn't just an innovative company—it's also a brand that's great at listening too. Which is why it consistently rates high in consumer satisfaction surveys. To quote Tim Cook, CEO of Apple, "I want the customer to be happy. We work for them.” It's from this devotion to improving the customer experience that Apple has developed a strategic approach to gathering customer feedback and applying it to improve its products.
One of the most visible ways Apple collects customer feedback is through the Net Promoter Score (NPS) system. The NPS asked customers one simple question, "How likely are you to recommend this business to a friend or colleague?" And customers are offered to rate on a scale of one to ten, with ten being the most likely. By concentrating on the specific metrics for improving the NPS, Apple gains valuable insights that it can use to improve the customer experience. By integrating customer feedback into its operations, Apple is able to create a brand that customers feel connected to and fiercely loyal to.
Building brand loyalty takes time, but once you have it, you'll have a customer for life.
Invest in customer retention strategies that make your customers feel appreciated, respected, and above all that, their needs are heard.
Looking for a little extra oomph in your customer retention efforts? We got you. At Rebel, we use customer research to get upfront and personal with your target audience to understand how they see your brand, why they use your services, and what's missing.
Ready to win lifelong customers? Let's chat.