The Five Types of Loyal Customers and How to Keep Them
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Did you know that the cost of acquiring a new customer is five times more than that of retaining an old customer?

And did you know that 86% of loyal customers will likely recommend your business to family and friends?

Customer loyalty increases customer referrals, builds more trust and improves your customer retention rate. As a business owner, you should retain your old clients while still looking for new ones.

That's why it's important to create a loyalty program to reward your loyal clients. After all, nearly 90% of businesses have some sort of loyalty program, and you may be losing a lot to your competitors if you don't have a loyalty program.

Here's a guide to help you explore the various types of loyal customers, and how to create personalized loyalty programs. Read on. 

What Is Customer Loyalty, And Why Is It Important?

Customer loyalty refers to a customer's willingness to make repeat purchases to your business. Loyal customers maintain a positive relationship with a brand, trust the brand, buy from it repeatedly, and recommend other people to the business.

Customers can remain loyal to you because of your quality products, affordable prices, or your brand's reputation.

Customer loyalty is important because it:

  • Drives more sales - loyal customers return for more purchases
  • Increases revenue - repeat customers tend to spend more than new customers
  • Facilitates marketing - loyal customers likely inform their friends and family about your business products or services
  • Provides valuable feedback - loyal customers are happy customers, and they mostly leave positive reviews about your business

What Are The Different Types Of Loyal Customers?

Here are the five main types of loyal customers you should know.

1. Product Loyal

Product loyal customers consistently buy the same product from you. They are loyal to you because of that specific product(s). 

For instance, customers may have tried different types of shampoos from multiple suppliers until they bought yours and loved them. So because they like the features and benefits of your shampoo, they will be making repeat purchases irrespective of the price.

2. Price Loyal

Price loyal customers are willing to keep buying from you because of your prices. Perhaps you offer the best prices for that product compared to your competitors, or you offer discounts and other perks that make the price worth it.

Price loyal customers might not consider your brand or the quality because the price is their main consideration and the sole reason they are loyal to you. Should you increase the prices beyond their normal expectations, chances are they may leave you to competitors.

3. Brand Loyal

Brand loyal clients trust your brand. They believe in your brand and its value, so they will keep buying from you irrespective of the price or the quality. They love any product with your brand's name or any subset of your brand.

4. Distribution Loyal

Distribution loyal clients like the convenience of your business location. For example, let's say you sell hair products in a certain city. If you have a Shopify store, loyal clients within your city will be shopping from your store more because shipping (distribution) is easier and cheaper compared to the other stores.

Distribution loyal clients may not consider the price or quality and will only stick to your firm because of the convenient location.

5. Program Loyal

Program loyal clients remain loyal to you because of the benefits they get from your program loyalty programs. They don't pay much attention to price or quality, but like coming back to you so that they can enjoy more rewards from the purchases they make.

How to Personalize Loyalty Programs For Your Shopify Customers Today

We are living in a customer-centric world, and customers expect attention. One good way to show customers you know them, care and value them is to personalize customer loyalty programs. 

A recent study found that 79% of customers engage with businesses that offer personalized services. So you have to personalize your customers' loyalty programs based on the data they provide when signing up.

Here is how to personalize loyalty programs based on customer personas.

Step 1: Collect the Right Information

You cannot get personal when you don't have the basic information about your customer. So, data collection is the first step.

Vital data to collect about your customers include:

  • Name
  • Email
  • Age
  • Gender
  • Profession
  • Location

You can ask for more details according to your business niche and the type of loyalty program you offer. However, you should avoid asking for excessive personal details to avoid losing your customers.

Ideally, you should collect customer data through profile completion when customers sign-up for the loyalty program. You can also introduce other interactive activities or quizzes which require the user to provide a few details before participating.

Step 2: Segment Your Customers

Now that you have customer details, the next step is to segment to create common groups. You can segment your customers according to characteristics and recent activity.

  • Characteristics - demographics, age, geographical location, milestones (birthdays) etc.
  • Recent activity- product usage, purchase history, time passed since the last purchase, etc.

The goal is to create groups of people with similar interests before moving to the next step.

Step 3: Personalize the Program According To the Information

Now that you have the data and the groups, the last step is personalization. 

In a loyalty program, you can use the customer's name in the following areas:

  • Sending emails or any other notifications
  • Sending personalized referral codes to invite their friends
  • On the customer's account page

Personalized communications have more click rates and open rates.

Step 4: Track Your Loyalty Programs

Loyalty programs need tracking to monitor performance and improve weak areas. The monitoring can either be manual or automated, although automated is the most effective solution.

Your main goal is to track the open email rates or click-throughs after the personalization. Are your customers' responding to loyalty programs more after personalization? If not, what could be wrong? Perhaps, you are not keen, and you have to start again.

While tracking the performance of your personalized loyalty programs, you will most likely recognize the most active customers. Those who always earn rewards are your loyal customers. Find new ways to motivate them while still encouraging the idle users of your customer loyalty programs to participate.

Build A Loyalty Program For Your Shopify Store

A customer loyalty program is a worthy investment for business owners. It is a great tool to appreciate your loyal customers and show them that you need and value them. If you would like to create an effective loyalty program for your Shopify customers, install the Glow Loyalty App today to reward your customers. You can also view a demo to learn the features and tools.

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