The 10 Levers of Customer Loyalty

The prerequisite for any customer loyalty strategy is a thorough understanding of your customers. This is true across all sectors, regardless of the size of the business, from small retailers to large corporations.

Knowing your customers allows you to:

• Develop offers, services, and products that meet their expectations and needs (aligning supply with demand).

• Implement targeted and personalized relationship marketing, especially through marketing segmentation.

The Two Pillars of Customer Knowledge

Improving customer knowledge is based on two pillars:

- Implementing mechanisms for collecting 'first party' customer data at various touchpoints. The main data to collect includes:

• Profile data, which encompasses socio-demographic information (first name, age, gender, address, profession) and psychographic data (interests).

• Transactional data: purchase history, products purchased, RFM (recency, frequency, monetary value)...

• Behavioral data, particularly website visits (web 'events': page views, clicks...).

• Consent data (the 'opt-ins').

• Relationship history: interactions with salespeople, customer support...

- Centralizing and, most importantly, unifying these data in a database, which can be built in a Data Warehouse or a Customer Data Platform (CDP).

A company that sells quality products but offers poor customer service will struggle to retain its customers. The quality of the contact center is a key factor in customer experience, customer satisfaction, and the ability to retain customers. If you operate in a sector where it's hard to differentiate through offerings, the main differentiator is in the quality of service you provide to your customers. How can you offer quality customer service? There are some golden rules. Here are 3 of them:

Respond Quickly to Customer Requests

Allowing several hours, or even days, to pass before responding to a customer request is the surest way to create dissatisfaction. The first golden rule is to handle customer requests quickly. It's no coincidence that one of the main metrics for measuring the performance of a contact center is the average handling time (AHT).

Here are some ways to optimize the speed of handling customer requests:

• Continuously train advisors to increase their ability to quickly process requests.

• Create documentation describing the main reasons for contact and treatment procedures.

• Implement a self-care system (like an FAQ) to allow customers to quickly find answers to simple queries.

• Use artificial intelligence to assist advisors in handling complex requests and automate the processing of standard requests (via a chatbot, for example).

• Use technology to optimize call flow routing and send requests to the right skills.

Be Friendly and Courteous

The friendliness and courtesy of advisors play a major role in customer loyalty. An exchange with a courteous, attentive, empathetic advisor can even turn an unsatisfied customer into a satisfied and loyal one, ready to recommend the brand to others.

One only needs to refer to personal experience to know that a difficult interaction with customer service can lead to a change of brand.

It's no coincidence that a significant part of advisor training focuses on attitude and posture.

Facilitate Returns and Refunds

The digitization of shopping journeys contributes to an increase in return and refund requests. And for good reason: we often buy products without having examined them closely or tried them out.

For an e-commerce company, the generosity of the return and refund policy is a key element of customer service quality. Beyond promises, it's the quality of execution that must be up to par. If you want to offer differentiating customer service, we recommend implementing an easy-to-follow return system to create happy customers who won't hesitate to repurchase... and become loyal.

A loyalty program, as the name suggests, is a program designed to reward loyal customers. There are several types of loyalty programs based on the nature of the rewards and the mechanisms used. Here are three:

The Points-Based Loyalty Program

This program involves awarding loyalty points to the customer for each purchase made - points that can then be exchanged for rewards: discounts, promo codes, etc. This classic but very effective mechanism encourages the customer to regularly buy from the brand. Below is an example of the program from our client Le Temps des Cerises:

The tiered loyalty program rewards customers based on their level of engagement or spending with the brand. Each new tier reached entitles the customer to new benefits and rewards. This loyalty mechanism offers progressive rewards depending on the customer's level of loyalty. Below is an example with the program of the company Intersport, which has adopted the tiered loyalty program.

Cashback involves offering customers a percentage discount on their purchases, credited in the form of real money or shopping vouchers. This is the approach chosen by our client Supermarchés Match, which offers to accumulate a 10% discount on the visit and purchases of their choice every 10 visits.

Referral programs are relational programs that encourage existing customers to refer people in their network in exchange for a reward. It's one of the few programs that simultaneously aims at both acquisition and retention.

This is a win-win program where the company offers a reward to both the referring customer and the "referee," i.e., the referred customer. The company, in turn, gains a new customer and encourages the referring customer to make repeat purchases from the brand through the reward given. Everyone benefits.

In the example below, the referral program of the company Dropbox involves offering both the referrer and the referee free storage space. This strategy not only helps acquire new users but also strengthens the level of use by the referring users. As a bit of background, Dropbox based much of its acquisition strategy on this referral program.

Subscriptions, as is well known, involve providing access to a service or product in exchange for a sum of money periodically deducted, usually every month. The subscription-based business model is a powerful lever for customer loyalty.

The subscription model symbolizes the shift from an ownership economy to an usage economy. We buy fewer CDs, increasingly subscribing to platforms like Spotify or Deezer. We buy fewer DVDs, more readily subscribing to Netflix or Amazon Prime. We no longer buy marketing software; we subscribe to it (triumph of the SaaS model: Software as a Service).

The subscription business model is expanding into new territories each year. The major innovation is that subscriptions are no longer limited to services but are now extending to physical products. For instance, the company Nespresso offers a subscription formula for its machines.

Decathlon has also decided to use this business model, as can be seen below:

By definition, the subscription model promotes customer retention. The classic act of purchase is a one-time event. A subscription is a repeated purchase that extends over time. Subscription programs are a powerful lever for customer loyalty: they invite the customer to envision a long-term commercial relationship.

It's worth noting that subscription programs are particularly suitable in sectors where recurring purchases are the norm. If this applies to you, it might be time to explore this avenue. The future looks bright for subscriptions.

A company that knows how to communicate with its customers in a personalized way across all channels is much more likely to retain them than others. And the reason is simple: customers demand personalization. A customer who receives personalized communications and offers, in line with their expectations and needs, will be a happy customer... and very likely a loyal one.

Available statistics confirm this observation. A study by Gladly, for example, shows that 75% of consumers are more inclined to buy from companies offering personalized recommendations.

To successfully implement personalized and omnichannel communication with your customers, several ingredients must come together:

Good Customer Knowledge

We return to our first piece of advice. It is not possible to personalize customer interactions if you do not know your customers well (who they are, what they do, what they like). Customer knowledge and the customer data that make it possible are the fuel for personalized relationship marketing.

Customer Segmentation

Segmentation involves creating segments of customers sharing common characteristics. It enables marketing targeting, allowing the right marketing campaigns, messages, and offers to be sent to the right segments.

Orchestration / Scripting of Communications

Customer dialogue can be scripted through marketing automation, which allows for automatic sending of communications based on customer actions or events. For example:

• Sending a birthday email on the customer's birthday.

• Sending a follow-up email for an abandoned cart to customers who have not completed their purchase on the website.

• Sending an email to notify about the expiration of loyalty program points.

This logic of scripting, based on marketing automation, allows to go even further in terms of personalization and targeting than campaigns based on segmentation.. It's the second stage of the rocket. Our Actito platform allows you to manage your marketing automation scenarios in great detail:

Loyalty programs are designed to reward and value loyal customers, in turn encouraging their brand preference and loyalty. It's possible to take this concept further by offering your best customers access to exclusive offers and private sales, making them feel like VIPs.

For these offers to be effective, they must truly be granted only to a select group of customers: the most loyal, the biggest spenders. The goal is to develop in the VIP customer the feeling that they are important to the company, that they are valued, pampered, and part of an exclusive club.

These VIP programs, whether they take the form of invitations to events, exceptional rewards, or (truly) private sales, contribute to developing a sense of belonging and attachment to the brand.

Below is an example from our client K-WAY, which offers private sales reserved for its customers by logging into their account.

Gamification is a marketing approach that involves integrating game elements into loyalty strategies to make the experience more fun, engaging, and even addictive. It's a powerful customer loyalty lever that taps into the mechanisms of human psychology.

A gamified loyalty program is one that rewards customers not only for their purchases but also for their participation in fun activities related to the brand: contests, quizzes, challenges, surveys.

For example, the brand Moulinex uses gamification with Qualifio to increase newsletter subscriber engagement and attract new enthusiasts. The member receives points to be eligible for additional games and prizes. When the customer reaches a certain threshold, the rewards can be exchanged for gifts.

Simply offering quality products and services is not enough to retain customers. We have emphasized this point by highlighting the importance of customer service and personalized communication. However, it would be a mistake to think that customer loyalty can be achieved by offering poor quality products and services.

The challenge is to offer products and services that meet the needs, expectations, and standards of your customers. This is primarily what we mean by "quality." The notion of quality is relative and depends on what your customers expect.

Listening to the Voice of the Customer

How can you improve the quality of your products and services? The answer can be deduced from the above: by learning to better understand your customers, their expectations, and their needs. This brings us back to what we said at the beginning of this article: customer knowledge is one of the main levers of customer loyalty.

To better understand your customers' expectations, we highly recommend distributing questionnaires to your existing customers. Also, take the time to analyze:

• Customer reviews posted on various channels: websites, social media...

• Customer feedback collected by customer support.

• Surveys distributed on social media.

• Etc.

By listening to the voice of your customers, you will most effectively improve your products and services. You can use the four-step approach called "Closing the Loop":

• Collect customer feedback.

• Analyze the feedback.

• Make decisions based on the analysis.

• Keep your customers informed about the improvements.

This approach effectively leverages the wealth of information contained in customer verbatims and feedback, transforming insights into actions.

It's no longer possible to write an article about customer loyalty levers without discussing social media. Today, social media platforms are powerful and increasingly essential for building and maintaining communities around products and brands.

Regularly publishing content on brand accounts, engaging the audience, sharing exclusive offers, creating contests, polls, challenges: there are several ways to use social media to develop an active, engaged, and loyal community. This could be the subject of an entire article...

A recent trend involves developing influencer marketing strategies to reach new audiences through partnerships with nano-influencers.

Social media is becoming a key channel for both acquiring new customers and retaining existing ones.

In a context of increasing average customer acquisition costs, customer retention is becoming more crucial than ever. We have seen that there are numerous customer loyalty levers, some traditional but still effective like loyalty programs, and others more recent like social media. Now, it's your turn to act!