The most important tools of customer loyalty
Customer loyalty is more important than ever. But what kind of customer loyalty tools are available today? And how should they be used?
In this blog, we would like to explain the basics of the most important customer loyalty tools that can be used as part of an effective customer loyalty strategy. After all, effective customer loyalty measures not only lead to a more satisfied customer relationship, but also to a more profitable one.
Why use customer loyalty tools at all?
Every company knows the value of returning customers. A study by the Gartner Group even describes that 80% of a company's future revenue comes from 20% of existing customers. Every company should set itself the goal of strengthening customer loyalty in order to increase customer satisfaction and, consequently, future sales in the long term.
Below are specific examples and measures on how you can retain customers in the long term and proactively align your strategy with this goal.
In our article "Customer loyalty guide - and how your company benefits from it", we have described in more detail what customer loyalty is, how to effectively maintain and promote your own customer base and how important it is for a company to satisfy existing customers. In this article, we discuss the various customer retention tools and differentiate between traditional and digital tools.
Types of customer loyalty tools
Customer loyalty should have a high priority and be anchored in the company by means of a suitable strategy that elegantly brings together provider, offer and customer. This strategy combines departments such as sales, marketing, but also logistics and quality management.
Customer loyalty has been practiced by companies of various sizes for years. Just like the market, your customers themselves and the technologies used, the possibilities for customer loyalty are constantly evolving. We offer an overview and classification of the most established customer loyalty tools that you can include in your strategy.
Classic customer loyalty tools
These examples of classic customer loyalty tools are the "silver bullet" of customer loyalty. They have been around for a long time, but they are still as relevant as they were on day one, only the implementation has changed. The classic tools of customer loyalty include
Customer service
Bonus systems
Customer feedback
Customer journey management
Referrals
1. Customer service
The so-called customer journey, which is described in more detail in point 4, describes the journey of a user from the moment of the first interaction with a company to the purchase decision and far beyond. Regardless of where the user is, they should always be given the opportunity to get in touch with the company. Furthermore, it should be determined what problems the customer might have at each stage of the customer journey in order to make solutions easily accessible.
Complaint management is often neglected in this respect, as many companies often deliberately avoid complaints. However, successful complaint management can turn dissatisfied customers into satisfied customers, who in turn can strengthen your brand through word of mouth. Complaints are also an important source of experience for the further development of the product and processes.
Excellent service is a basic prerequisite for good customer loyalty and signals to customers that they are important to your company!
2. Bonus systems
Bonus systems have been around for years and offer a cost-effective marketing opportunity for any company. From simple stamp cards in the coffee shop around the corner to the complex frequent flyer system of an airline, there are various forms of bonus systems. However, the basic aim is always the same: To bind customers to the company in the long term.
In most forms, bonus systems offer a way to motivate customers to collect points in order to later exchange them for certain benefits, discounts or non-cash prizes.
A recent development in the area of bonus systems is based on game mechanics that have been used in video games for years. The buzzword gamification originated in the business context in 2008, but the underlying principles had already been applied in some CRM concepts - such as Lufthansa's "Miles and More" bonus program.
The aim is to support the customer in a playful way by collecting points and achieving a higher status. In computer games, these mechanics are used to create an emotional bond. These game mechanics include ranking lists, levels, challenges and points that the customer can achieve or collect.
3. Customer feedback
It is essential to understand why some customers remain loyal and why other customers leave the company. Direct customer feedback can serve as a valuable source for this. On the one hand, the customer can be integrated into the business development processes through feedback, and on the other hand, the feedback provides you and your company with valuable insights for the further development of individual processes.
It is important to set up feedback channels in which customers can actively contribute ideas and comments. Processing feedback quickly, professionally and appropriately is the key to loyal customers, whether by phone, email or social media.
4. Customer journey management
The customer journey defines the phases and their touchpoints that a customer goes through before making a purchase decision for a company's products or services. The customer journey also goes beyond this and deals with the touchpoints after the purchase.
Touchpoints are all contact points at which a user comes into contact with a brand or company. In the customer journey mapping process, all possible touchpoints are defined and assigned to the individual phases of the customer journey.
It is important to optimize the individual touchpoints in order to offer your customers the best possible customer experience throughout the entire decision-making process.
5. Referrals
The term referral marketing describes a marketing method in which existing customers are encouraged to recommend your offers and thus generate new customers. In German-speaking countries, these methods are known as customer-recruit-customer programs.
A key factor here is to offer attractive rewards for referring new customers. If your customer journey is optimized and your customers are satisfied with the product or service, this marketing method can lead to strong growth in new customer acquisition.
Digital customer loyalty tools
In addition to the classic "offline" customer loyalty options, the digital transformation offers new opportunities to build and strengthen relationships between companies and customers. Digital methods offer great potential, provided they are used and implemented correctly.
The following important digital tools can strengthen the bond between your company and your customers
CRM systems
Digital customer card
Customer engagement
Push messages
Email marketing
1. CRM systems (Customer Relationship Management)
At the heart of digital customer loyalty is usually a customer relationship management system, or CRM system for short. As the name suggests, this is used to maintain customer relationships and generally facilitate customer loyalty management. A successful implementation of a CRM system helps you to store all of your customers' important data in a central system. You can use this data to better understand your customers, document experiences and keep track of a customer's entire history.
For example, using a CRM system can help you identify your company's regular customers in order to analyze their purchasing behavior and increase sales with targeted marketing activities for these regular customers. Last but not least, this also increases the satisfaction of regular customers because it makes them feel valued.
2. Digital customer card
The customer card is a classic instrument of customer loyalty and describes a measure that can offer your customers decisive added value.
The classic plastic card is increasingly being replaced by the digital loyalty card, as it offers a number of significant advantages. In addition to being easier to use, the biggest advantages usually include simpler registration and a reduction in plastic waste. You can find a detailed comparison in our article on the comparison of digital and analog loyalty cards.
3. Customer engagement
Direct communication with the customer can have a positive effect on customer satisfaction and customer loyalty. New platforms and technological advances enable companies to easily get in touch with their target group. Not only can channels such as social media or other apps and services be used to interact personally with the target group, but valuable data can also be collected that can later be used in online marketing.
Interaction with the customer via digital channels and social media also increases customer satisfaction and subsequently customer loyalty, as the customer feels valued.
4. Push messages
The smartphone, our daily companion, increasingly offers companies new opportunities to get in direct contact with customers. These can be implemented without much effort and relatively inexpensively. We are talking about push messages, i.e. notifications that are sent to the user's screen via an app.
Due to the high open rates, push messages via app are a more popular and often more effective measure than traditional marketing emails.
Correct timing is the key to success and makes the difference between useful reminders and annoying distractions. Think about which messages the customer finds useful at which point in time and try to constantly optimize them. Automated push messages that are sent automatically under certain conditions are a more elegant option. You can find more useful tips in our article on the correct use of push messages.
5. Email marketing
Even though most people receive a deluge of emails every day, email marketing is still an important and effective measure for customer retention and acquisition. There are many ways to collect a customer's email address, whether it's through a form on your website, by entering a competition or through a personalized loyalty app.
Your email mailings can provide an opportunity for a direct exchange with your customers. As with push messages, it's often a question of timing. Through automation, personalized emails can be sent out when parts of your customer base have not purchased for a while. You can also use automated emails to wish users a happy birthday or to strengthen customer loyalty by sending out promotions.
Customer loyalty via app
There are many ways and instruments of customer loyalty, whether traditional or digital. Customer loyalty should be a high priority in any corporate strategy, as it is always cheaper to encourage existing customers to buy again than to acquire new customers.
You can find out more about the opportunities of digital customer retention in our whitepaper. The best way to reach your existing customers is directly via their smartphone using a personalized customer loyalty app. To simplify this process for you, we at hello again have looked into this topic extensively. Your individual loyalty app is completely tailored to you and your company's goals and combines all the functionalities of the classic and digital customer loyalty tools mentioned here. Start now - it's never been easier!
