Building Loyalty

Author

CPG MBA
October 17, 2023


Picture this: You've invested time and effort in establishing a compelling brand presence and delivering an exceptional product, and you’ve begun to attract customers. But, now that people have started to buy your product, how do you keep them coming back for more?

Enter loyalty programs.

Loyalty programs have become a central strategy for CPG brands looking to retain customers and build long-term relationships. These programs offer a win-win solution: consumers receive rewards, discounts, and exclusive benefits, and companies enjoy increased customer retention and brand advocacy.

But, is building customer loyalty worth the investment? After all, won’t consumers be quick to make the switch if a cheaper or better competitor comes along?

Let’s look at the data.

  • Nearly 40% of customers admit that they’d pay more for a brand they like, even if there’s a cheaper option.

  • About 55% of customers will tell a family member or friend about a brand they feel loyal to.

  • If customers form an emotional connection to your brand, they have a 306% higher lifetime value!

But, building customer loyalty isn’t an easy process. In fact, 37% of consumers need five or more purchases to become loyal to a brand!

So, how do you build a loyalty program that turns single-purchase consumers into loyal, repeat customers? Here are a few options:


Points-Based Rewards Systems

A points-based loyalty program is one of the most common methods for direct-to-consumer brands. Customers earn points for each purchase, engagement on social media, or referrals. These points can be redeemed for discounts, free products, or exclusive merchandise.

To make it effective, consider tiered levels of membership, with more benefits and rewards as customers advance.

Subscription Services

If your company sells subscription-based products, you can integrate a loyalty program into the mix. Subscribers can enjoy benefits like reduced pricing, early access to new products, or personalized product recommendations.

The longer customers stay subscribed, the more they have to gain, fostering loyalty and long-term commitment.

Referral Programs

Referral programs encourage customers to become brand advocates. Offering discounts or free products in exchange for referring friends and family not only expands your customer base but also rewards loyal customers for their efforts in spreading the word.

Customer Feedback and Rewards

Collecting customer feedback is vital for improvement. Loyalty programs can offer incentives like discounts or free items in exchange for valuable feedback. This greatly improves the customer experience, making them feel heard and valued and building brand loyalty in the process.

Remember: Loyalty programs are about more than just individual sales—they’re about establishing strong, long-lasting relationships with customers. Ultimately, taking the time to build these relationships is what will lead to high ROI and the long-term growth of your company.

Until next time,
— The CPG MBA Team

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