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How to use a loyalty loop to win and keep customers

Customer relationship management (CRM) is often defined as identifying the stage a customer is at with you, so you can best meet their needs
A visualisation of the loyalty loop.

When you read about the management aspect of customer relationship management (CRM), it is often defined as identifying the stage a prospect or customer is at with you. This means you can provide the most relevant message, offer or support, in the right way, to meet their needs at that moment in time — because they won’t all need the same thing at the same time, nor for it to be delivered in the same way.

Loyalty loop

Using a loyalty loop helps you define core areas of a customer’s relationship from which you can then match key message and approach. Let’s look at each stage of the loyalty loop in more detail.

Stage one: Consider

At this stage, the primary objective is to get prospective customers to provide their data and feed into a nurture programme. It is the start of your relationship, but you need to be able to communicate with them directly and respond to their interactions relevantly.

The key focus here is the value the prospect will gain from giving you some initial information. You could provide them with access to offers, news, support and a guide to the benefits of choosing you via email, downloads or social channels.

Stage two: Evaluate

The primary objective is to create a first purchase or use. However, a key secondary objective is to keep the prospect referring back to your brand, to build and nurture this relationship developing trust that you are the right choice.

Below are some key considerations for ensuring the effectiveness of your loyalty loop:

  • Send key messages not just about your product and service, but how easy, simple, hassle-free and without risk using you is.
  • Gain trust and confidence with reference to review and testimonials (not just provided on your website, but link to external sources to increase the trust).
  • When you do talk about your product and service make sure your message is tailored to your prospect and what they were looking at. How relevant is your message to their specific needs?
  • Can you recognise when the prospect comes back to your website or reads your email? Can you adapt and change the message and product based on what they have looked at (e.g. browse abandon email)?

Stage three: Buy

The purpose of this stage is to create a second purchase or use. At this stage, engagement with your business is at a peak. Two factors will now influence the customer most: 1) How well the product or service performs against the promise and (2) how well you continue the relationship via your marketing with the customer.

Here are some tips for developing customer loyalty:

  • Don’t just send generic or buy/use again messages.
  • Say “thank you” – this is often overlooked at this stage.
  • Help the customer via a welcome series of ‘here’s how to get the most from your product’ and ways that your business can support them, e.g. customer service, online tutorials, and FAQs.
  • Recommend additional products or services that will add more value to the customer.

Stage four: Enjoy, advocate and bond

The longer a customer trades with you, the more you will learn about them. Continue to build this profile and use it to enhance your relevant, targeted and personalised marketing.

Four things you could:

  1. Take the opportunity to wow your customers from time to time with anniversary or birthday messages.
  2. Reward loyalty with special offers or promotions. This can both recognise past activity as well as drive future use. An example could be: 1 free for every 5 purchases.
  3. Promote other ways that the customer can engage with you. This includes your social channels, events, or your web app.
  4. Ask and reward your customers for recommending your products and services to their friends.

In a perfect world, this cycle would continue with loyal customers continuing to purchase from you across a number of years. Unfortunately, this is not always the case. Your CRM can also highlight and support when a customer starts to lapse (ie stops using you) and help you to win them back.

Lapsing and lapsed customers

The first point to note when considering lapsing or lapsed customers is that having clearly defined views of the status of different customer types and how to recognise them means you can do something to positively impact a negative situation.

  • The primary objective here is to win back this customer. What offers, reasons to reconsider, or new information can you provide to change this behaviour?
  • What might be the reason they are no longer using you?
  • How valuable were they to you as a customer? For high-value customers, you may want to make all efforts to re-engage these customers with strong offers or rewards for using you again.

Lower value customers may not be worth the extra revenue to win back, as the return in customer investment is too low.

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