The Pareto principle predicts that 20% of your current customer base will supply 80% of your future revenue. Maintaining close ties with your customer base is integral to your marketing strategy because it increases sales, reduces customer attrition, and creates better marketing experiences.
Prioritizing customer relationships is even more important in uncertain economic conditions. When brands face market turbulence, many look to budget cuts to prepare for upcoming challenges. In many cases, marketing and advertising are first on the chopping block. These drastic measures put those departments in a position to produce the same (or better) results and build a solid customer base, even in the face of shrinking budgets.
Companies that don’t prioritize building customer loyalty will inevitably lose those customers over time, forcing them to pay more to obtain new ones. Although it still takes investment, the lifetime ROI of an existing loyal customer is worth more than a one-off sale.
As companies look to build customer loyalty initiatives into their marketing efforts, they should consider seven main benefits of customer loyalty programs:
- Reduced attrition: Acquiring a new customer costs six to seven times morethan retaining an existing customer.
- Increased sales: Loyal customers buy more often and spend morethan new customers.
- Positive word of mouth: Repeat customers are more likely to refer friends and family, which increases the number of customers for little to no additional cost.
- More effective ad spend with better relationships:Brand familiarity makes it more likely that your ads will be well-received as genuine, helpful, and positive instead of annoying or unnecessary.
- Strong brand identity: Keep a consistent tone in customer interactions to generate brand authenticity and a loyal following.
- A better understanding of your sales funnel: You can create better customer experiences by investing in building your zero-party data and first-party data.
- Turning negatives into positives: It only takes one bad experience for a customer to leave negative reviews online that affect your business. Building rapport with customers humanizes your brand and reduces the likelihood and impact of negative reviews.
Where Brands Go Wrong
All of this is easier said than done. Establishing a group of loyal customers does not happen overnight. It requires an investment in technology, time, money, adequate staffing, and other resources. A customer’s relationship with your brand will evolve as they interact more with it. These interactions must be tracked and measured to create strong, long-lasting relationships.
However, you can’t expect to throw together a customer loyalty strategy without proper consideration. Consumers are savvy and can tell the difference between brands with a genuine tone and businesses that are just hoping to make a quick buck.
Authenticity matters. Whatever you say about your brand from a marketing standpoint needs to mirror how consumers feel when they interact with it on social media, during the purchasing process, when speaking to a customer service agent, and when going to a physical store.
Ads that leverage zero-party data are excellent tools for building this parallel and creating a seamless omnichannel strategy. But what is zero-party data? And how can you successfully leverage it in your mission for customer loyalty?
What Is Zero-Party Data?
- Data shared within their account’s preferences.
- Purchase intentions.
- Personal context.
- How they prefer to be recognized by a brand.
For example, when you confirm your age to enter an alcohol brand’s website, this voluntary data indicates whether you are a legally viable customer.
In today’s privacy-centric world, zero-party data is a great solution to support customer loyalty interactions. Customers allow brands to transparently and authentically access this information in exchange for a curated, personalized customer experience.
How to Get the Most Out of Data-Driven Customer Relationship Strategies
Using zero-party data enables you to fuel targeted and timely ads without coming across as invasive to your customers. Here are four ways to use zero-party data to improve customer relationships and boost loyalty:
1.Create personalized experiences.
Every touchpoint can create a personalized experience, from seeing a digital ad to attending an event or calling tech support. This data should be tracked, organized, and implemented promptly to create better customer experiences and ROI.
If a customer visited your website multiple times before filling out a quote request, you would want to send a personalized email about their quote and offer to answer any questions. Without this information, you might end up feeding them top-funnel experiences instead of working to drive them through the customer journey.
2. Ethically capture information.
Some brands stop learning about the customer after they finish their purchase. Communicating is better than staying silent and falling off the map completely, but it’s the personal, useful messages that keep customers engaged and coming back for more. Continue capturing customer data to ensure each touchpoint is relevant and timely.
When you continue thinking about customers after the point of purchase, you can more easily coax them back. Send a follow-up survey, ask for feedback, solicit suggestions, and keep learning about your customers to stay one step ahead of their needs to encourage multiple purchases and upsells.
3. Show appreciation.
Modern consumers are wary of how their data is obtained and stored, and they have countless options to spend their hard-earned money. Because of these pain points, brands must show appreciation to their loyal customers. Fortunately, reward and loyalty programs go a long way.
If your brand doesn’t have the means to create one, a referral program or simply sending a genuine “thank you” offering a discount on their next purchase is an excellent first step. This authentic action can even help your brand generate ROI in the long run.
4. Continue optimizing your strategy.
Your data collection paints a great picture of how your efforts are helping the brand’s bottom line. You need to justify the dollars spent on retaining customers, so consider tracking customer lifetime value, satisfaction scores, repeat purchases, yearly revenue, and purchases associated with promotions.
This information will showcase the program’s value while tracking the numbers to continue the learning and growing process for future customers.
Ready to Take the Next Step?
Marketers are facing pressure to perform better even with fewer resources. Balancing these pressures with growing consumer privacy concerns is a challenge. Add in the necessity to build customer loyalty, and marketers are faced with an uphill battle. Fortunately, data-driven omnichannel strategies can ensure your brand reaches the right people at the right time to keep them engaged. Consistent and relevant messaging can significantly improve how customers progress through your sales funnel.
If you’re interested in learning more about leveraging zero-party data or building customer loyalty-driven marketing campaigns, we’re eager to discuss our data-driven solutions. Contact us today to learn more.