How Retailers Can Boost Customer Loyalty

Today customer loyalty is much more than a rewards program. It’s about recognizing and reinforcing total customer value and creating sustained personal engagement with customers throughout every step of their brand journeys.

Traditionally, loyalty has been achieved through a series of rational benefits delivered to members in exchange for their business. But now emotional benefits have become more important.

It may sound simple, but brands need to put their customers at the center. This sounds cliché, but while most companies say it, only a few truly deliver.

Loyalty programs are becoming more sophisticated because brands seek to create personalized relationships with consumers. Customer experiences are becoming more personal, and the benefits of joining a loyalty program have evolved beyond discounts to provide additional value that helps establish an emotional connection between the customer and brand.

Brand Keys recently released its 2018 Loyalty Leaders list and, while Google, Apple and Amazon.com topped the list for a second year in a row, brands like TJ Maxx and Zara were among the top five to see the most significant loyalty growth. TJ Maxx and Zara jumped 38 and 32 spots, respectively, while their same-store sales grew 12 percent and 2 percent, respectively.

The key to sustainable customer loyalty that Amazon, Apple, Google, TJ Maxx and Zara have shown is their ability to both predict and exceed customers’ expectations that create emotional connections.

For example, Spain-based Zara, the world’s largest clothing retailer, introduced an augmented reality (AR) experience in its stores. Zara has taken experiential marketing to another level. Shoppers can use their mobile phones to see models wearing selected fashions when they click on sensors in the store or displayed on AR-enabled shop windows. With this new AR application, Zara draws customers into the brand and engages them in unique ways.

Zara focuses on the customer above all else. Through the unique and memorable experiences Zara offers customers, coupled with high engagement levels, the company creates brand evangelists. Shopper frequency at Zara is two to three times higher than in traditional women’s apparel. Zara has more than 25 million Facebook followers, 16 million on Instagram, and over 1 million on Twitter. Zara has found innovative ways to boost customer loyalty.

“Digital and tech brands have held their ground,” Robert Passikoff, Brand Keys founder and president, says in regards to this year's Loyalty Leaders report. “But traditional brands have worked harder to create the emotional value connections necessary to bolster the loyalty bonds necessary for keeping current customers, developing new ones, and making profits.”

Passikoff added that loyalty is a predictive leading indicator of future consumer behavior.

Meeting customer expectations on a consistent basis will be the biggest thing for brands to move forward with their loyalty strategies. Loyalty serves as both a motivator and a reward for moving customers along the continuum from unidentified consumers to engaged customers to advocates. Get to know your customers — what their days are like, what their pain points are, what motivates their actions, and how they define success. Once you know these things, you can work on solving customer issues with your offerings.

Tom Caporaso is the CEO of premium loyalty solutions pioneer Clarus Commerce, with over 24 years of experience in the retail, e-business and customer loyalty industries.