Marketing Strategies to Increase Customer Loyalty

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Loyaltyis a lot like love. They both come from creating a positive emotional connection with a person (or brand) through a series of positive interactions or transactions that build affinity and become habitual over time. So why is it so hard to get it right?

Marketers and retailers should focus their attention on integrating three core marketing strategies to increase customer loyalty. Marketers that operate programs integrating these approaches will see measurable increases in their rewards program enrollmentand a better lifetime value from their customers:

1. Limited-Time-Only Promotions:Get customers in the store with an effective promotional strategy (acquisition).

2. Rewards for Purchase:Incentivize customers to repeat store visits and increase average order value (growth).

3. Points-Based Rewards Program:Enroll customers in a simple points-based retention/rewards program that builds tangible value (retention).

Marketers continue to test various pricing promotion strategies, most notably the everyday-low-price policies. Some believe this is more effective than other pricing strategies because studies show that customers want it simple and want it now. Customers are motivated to purchase when they believe the promotional price is temporary (limited time only) and are unsure when they might see that product discounted in the future. Limited-time-only promotions do work, but they wont build a long-time bond.

In one test, one retailer compared a reward-for-purchase promotion with an instant-discount-at-the-register promotion. The reward-for-purchase scheme resulted in 14% lift.

The promotion strategy was initially intended to increase store traffic by having the reward-for-purchase offer redeemed at the same retailer. This strategy resulted in one to two incremental store visits within 30 to 45 days of the initial purchase, as compared to zero under the instant discount promotion offered at the register. And, it gets better.

The additional store visits led to an incremental 14% in revenue over the initial purchase (compared to 0% in the instant promotion), with 4 percentage points representing additional out-of-pocket funds from the consumer. The remaining 10 percentage points were initially funded by the retailer to the customer as a Reward for Purchase and then spent back at the retailer at full value. Interestingly, more than 50% of the rewards were spent back at the retailer within 60 days of the initial purchase. So, why wouldnt retailers bolster their promotional budgets if the funds are spend back at the retailer and drive additional customer out-of-pocket spend over the course of two to three transactions?

This strategy was also intended to generate two to three additional point-of-sale transactions, which allowed the retailer to enroll customers in its retention/rewards program and increase program stickiness. Rewards programs tend to increase stickiness when there is increased transaction frequency and recency.

Data collected in the additional P-O-S interactions can be used to:

Analyze customer data to create specific offers targeted to these newly acquired customers. The additional offers may increase product attachment or cross-category success to drive brand affinity or loyalty.

Build predictive models to determine the customer profile of individuals likely to accept limited-time-only promotions and increase one-to-one marketing efforts to other targeted customers who fit the models profile, but who may shop with a competitor.

So why is it so hard to earn a customers loyalty? Attention spans are shorter, patience is running thinner, and the competition is visible today more than ever.

Building a loyal customer base starts with acquiring the right customers from the start. Your chances of building a good relationship are greater from the outset because there are common interests. The key to long-term success lies in demonstrating value to the customer and building on the foundation established with a properly integrated engagement strategy.

This article was originally published in 2012 and is frequently updated.

Joe Custer is CFO at Trafficware (formerly president and CEO of Young America Corp.)

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How Do You Market To Customer Needs?

Your companys marketing strategy should address your customers needs. As consumers become more reliant on new technology,different types of marketing strategiesand touchpoint developments are the keys to improving customer experiences and earning huge profits.

Here are several common marketing strategies that use technology to connect your brands to larger target audiences than ever before.

Developing a marketing strategy is crucial for businesses looking to retain customer loyalty and expand their margin of profits. Whether your company is developing new products or undergoing new management, your marketing plan should take into account every opportunity for growth. There are many flexible strategies that utilizenew technologyto communicate the benefits of your business to your customers.

When trying to attract new customers, developing a new marketing strategy is vital to your success. While traditional marketing methods such as advertising on TV, radio, direct mail, and print advertisements are still a great way to reach local targets,digital marketinghas opened new channels for your messages and content to reach a wider audience. Here are a few successful marketing strategies designed to grow your business organically.

CMOs are as important as CEOs in leading their companiesup and to the rightwith successful plans. Your marketing strategy should focus on creating the best customer experience through service and quality. Digital marketingwhich can yield as much as70% more ROIthan traditional channelsallows you to connect with customers across multiple channels: emails, websites, social media, SMS, apps, SEO content, and more.

Define your companys success with these five types of marketing strategies:

1. Segmentation. The first step in any type of marketing strategy is knowing your customer. Segmentation divides a broad target market into smaller, more manageable sections based on needs, interests, and priorities to develop a more personalized campaign. This is done through surveys, data collection, and polling. The more direct your marketing strategy is, the more likely you will see positive results and growth in niche markets.

2. Email Campaigns.Once youve defined your target audience, a well-written email campaign can help spread your message. Newsletters, new product launches, press releases, website announcements, and more get your message out affordably and instantly. Cross-channel integration strategies include linking social media, websites, and customer service contacts to your email campaign.

3. Touchpoints.Your touchpoints are the point of contact between your customers and brands. Understanding the customer experience from every perspectivefrom mail, phones, and email, to billing, website chat logs, management, and morehelps companies improve all other areas of business.

4. Branding.Your brand is the most important aspect of your company. Your product may be strong, but without some type ofmarketing strategy to drive your brandinto new avenues, you risk losing to the competition. A solid brand reinforces your company value in the eyes of your consumers. An innovative viral campaign or a new website can be essential in carrying your brand forward.

5. Agile Marketing.Agile Marketing is ateam-based, iterative approach to marketing that uses data and testing to find the best strategies for success. Company marketing departments that utilize agile strategies arethree timesmore likely to increase their market shares significantly. CMG uses a holistic approach with itsAgile for Marketingplatform that transforms company cultures and operations so you can execute more efficiently, champion the customer, and achieve better performance through data-driven approaches. Every touchpoint and employee within a company is an opportunity for growth.

Everyone could use a little help when it comes to marketing strategy. At CMG, our strategic marketing consultants work with you to bring your great ideas to life.

Lets talkand get your business moving forward.

Lets talk about how we can accelerate your ability to create value. Were here to help. Get in touch with us today!

Since 1998, CMG has collaborated with some of the worlds fastest-moving companies to achieve an uncommon ambition: Potential Realized. Our work has generated over $1 billion in revenue for Fortune 1000 companies. With inventive thinking, collaborative execution and agile response to fast-changing market dynamics, we move our clients up and to the right.