Customer appreciation is not just about a one-time interaction; it's about fostering relationships that lead to a lasting bond between your brand and your customers. To achieve this, it is crucial to understand the different types of customer loyalty and the strategies to engage them. This article will explore customer loyalty types, equipping you with actionable insights to enhance customer appreciation and loyalty within your business.
Giftpack’s client gifting service presents a valuable solution that can aid in understanding the different types of customer loyalty and effective engagement strategies.
What Is Customer Loyalty?
Customer loyalty refers to a customer's willingness to return to a company to conduct business repeatedly. This is typically due to the positive customer experience, satisfaction with the product or service, and the value the customer gets from the transaction. It goes beyond simply being satisfied with their offerings. It’s about having a sense of belonging, trust, and connection to the brand. This occurs when:
- A business regularly fulfills commitments
- Treats clients personally
- Provides excellent customer service
- Meets expectations
Loyal consumers do more than simply return time and time again. They also promote the brand to others and urge them to make purchases from it. Because of this, companies that wish to expand and survive in today's market must concentrate on cultivating a loyal consumer base.
Why Should You Strive To Build A Loyal Customer Base?
1. More Frequent Purchases
60% of loyal customers will purchase more frequently from their preferred companies. The bottom line is that loyal customers will spend more with your brand. It stands to reason that if they make one purchase with you, they’re likely to make more.
Loyal customers don’t care if you have the cheapest products. If they like your brand, they’ll want to keep spending money with you. 93% of customers will likely make repeat purchases with excellent customer service companies.
2. It’s Cheaper
It costs five times more to attract a new customer than keeping an existing one. Retaining loyal customers just makes good business sense. Not only is it cheaper to retain customers than to acquire customers, but it’s also more accessible. If customers have bought from you once, they are much more likely to buy from you again. It’s much harder to convince a brand-new customer to take a chance with your business.
3. More Word-of-mouth Referrals
If your loyal customers are happy enough they might consider recommending you to friends and family. Word-of-mouth referrals are the most potent form of marketing and 88% of people had the highest form of trust in a brand when a friend or family member recommended it.
Word-of-mouth marketing costs nothing and can help you attract new customers who are more receptive to your business. If a friend or family member recommends a brand, you’ve already managed to win at least one person’s trust.
4. Provide Genuine Opinions
Loyal customers are more open to giving genuine opinions on your products and services. They’ve been using your products for a long time and will likely have detailed ideas for improving. New customers are doubtful to give feedback – they’ll probably just try your product and move on if they don’t like it.
Only one out of 26 customers will likely bring up their complaints, while the rest will just leave without saying a word. Your long-term loyal customers are a vital source of feedback that can help you solve problems with your service that you weren’t aware of.
5. Protects you from Competitors
When you have customer loyalty, you don’t have to keep lowering your prices to keep pace with your competitors. Customers will naturally buy from you because they feel a sense of commitment to your brand, and understand that paying more gets them great service.
37% of customers considered themselves loyal to a company after at least five purchases. It takes quite a while to earn a loyal customer, but it’s worth it once you do.
Effortless Personalized Gifting
At Giftpack, our driving force is to simplify the corporate gifting process while maximizing the impact of each gift. Utilizing our custom AI algorithm, we create highly customized scenario swag box options for you. We deliver globally and have an extremely user-friendly platform. We curate the most fitting gifts from a vast catalog of over 3.5 million products worldwide (which is ever-increasing).
By carefully considering an individual's basic demographics, preferences, social media activity, and digital footprint, we tailor each gift selection process regardless if the recipient is an employee, a customer, a VIP client, a friend, or a family member. With a wide range of locally and globally sourced gifts, we ensure that personalized gifting is accessible and achievable on a large scale, delivering meaningful connections across the globe.
Try Giftpack's client gifting service for free today.
Related Reading
• Customer Appreciation Day • Closing Gifts For Buyers • Customer Loyalty And Retention • How To Build Brand Loyalty • Customer Rewards • Thank You Notes For Customer Appreciation • Customer Appreciation Week • Customer Loyalty Program Ideas • How To Measure Customer Loyalty • Thank You Gifts For Clients
6 Types Of Customer Loyalty
1. Transactional Customer Loyalty
Transactional customer loyalty is the easiest of a customer's six different types of loyalty. A customer loyalty program provides discounts to attract repeat customers. It is a powerful tool, but it comes at a cost.
The good news is that discounts offered by loyalty programs are good for the next purchase. This is a powerful way to keep a customer. Every loyalty program must include this aspect in its offering, but it should never be the only focus.
2. Engagement Loyalty
To build stronger relationships, you want your customers to stay in touch with you through whichever channel works best. When customers interact with your brand on social media, by email, or on your website (and make purchases), we call this engagement loyalty.
This is a more profound relationship because it lays the foundation for an emotional connection. By engaging customers through:
- White papers
- Social media posts
- Competitions
- Newsletters
You’re delivering value to them while they’re showing you that they’re interested in what you’re doing.
3. Social Customer Loyalty
The next step to engaging repeat customers is through social media channels. A customer loyalty program simply awards points to customers for sharing specific posts on their social media platforms. Social sharing can be sharing, retweeting, or tagging a few of their contacts so the post can go viral—endless possibilities exist.
This can be customized with specific time frames to keep the points that have to be awarded in check. This provides another way for a brand to keep customers engaged.
4. Behavioral Loyalty
In an enduring customer relationship, you can begin to track (and change) customer behavior. Behavioral loyalty encourages customers to carry out a desired activity or action. This can take many forms. For example, you could nudge customers to try a new feature or purchase a new product. You could offer members of your rewards scheme a discount code on critical dates, such as in January, the slower month, or during a public holiday.
5. Emotional Loyalty
Emotional loyalty goes beyond discounts. Some of the best emotional loyalty initiatives use customer loyalty program software to provide deeper connections to customers that discounts can simply not do. Emotional loyalty helps you customize the offers and campaigns that can form a deeper connection with your customers.
Emotional Loyalty, if appropriately utilized, can be a powerful mechanism to ensure consumer loyalty. As the words suggest, this type of loyalty engenders after a customer reward program can form an emotional connection with the repeat customer.
6. Advocacy Loyalty
Like social sharing your customer reward program can award points for referrals. Statistics say people are 7X more likely to purchase from a brand when referred by a friend. The brand ends up acquiring a new customer without spending the high amounts required for customer acquisition. A repeat customer is more than happy to refer your brand. Rewarding this action with bonus points is the least a brand can do for them. After all, customer advocacy is a mini customer acquisition engine.
5 Different Types Of Loyal Customers
1. Satisfied Customers
Satisfied customers, also known as happy customers, genuinely like your products or services and consistently make purchases. While they may be satisfied with your business, they can easily be influenced to switch to a competitor if they offer a:
- Better deal
- Discount
- Experience
2. Convenience Loys
Convenience loyal customers shop with you because of your business's convenience. They may appreciate the ease of making a purchase, the location of your store, or the quick shipping speed. This convenience factor encourages them to stay with your brand long-term, and they are even willing to pay a little more.
3. Loyalty-Program Loyals
Loyalty-program loyals are customers loyal to your loyalty program rather than your brand. They make purchases just to avail of discounts or freebies offered through your loyalty program. If they see value in your loyalty or rewards program, they will continue buying from your business instead of switching to competitors.
4. Low-Price Loyals
Low-price loyals are customers who buy from you because your prices are the lowest or you offer the best deals compared to your competitors. While these customers will stay with your business as long as prices remain low, they will quickly switch to another brand if they find a better deal elsewhere.
5. Truly Loyal Customers
Truly loyal customers are your brand's biggest fans, and it is doubtful that they would ever leave you in favor of a competitor. These customers make frequent purchases, provide feedback, actively participate in your loyalty program, and, most importantly, recommend your products or services to their friends and family.
How To Identify Your Loyal Customers
To identify your loyal customers, you need to engage with them. This will help you build loyalty and generate interest and excitement about your products. Customer engagement will also help you build more relationships with customers who may not be your brand ambassadors but can contribute significantly to your revenues.
Customer engagement can be achieved through various ways such as:
- Personalized communication
- Offering loyalty rewards
- Sending surveys
- Providing a seamless shopping experience across all channels
Retaining Your Top Customers
You need to create a customer retention strategy to retain your top customers. This will help you explore ways to retain them and prevent them from churning. You should analyze their behavior and needs and create personalized strategies to retain them. Offering personalized discounts, priority customer service, and exclusive products can help retain your top customers.
Helping Customers Rise Up The Loyalty Ladder
Once you have identified your customers' loyalty category, you can help them rise up the loyalty ladder. Encourage repeat purchases, provide excellent customer service, and offer loyalty rewards to help customers climb the loyalty ladder. By engaging with customers and making them feel valued, you can help them become more loyal to your brand and increase their lifetime value.
What Are The 6 Stages Of Customer Loyalty?
1. Awareness
Customers become familiar with a product, service, or brand during this initial stage. They may have encountered the brand through:
- Advertisements
- Word-of-mouth
- Marketing efforts
At this point, they haven't developed a strong loyalty toward the company.
2. Consideration
In the consideration stage, customers contemplate the brand as a viable option when purchasing. They might:
- Research different companies/brands
- Compare them
- Read reviews
- Seek recommendations
3. First-time Customer
Once customers make their initial purchase, they enter the first-time customer stage. This phase involves trying out the products' services and assessing whether the product or service meets their expectations. The company must create a positive experience at this juncture to establish a lasting connection.
4. Satisfaction
After experiencing the product or service and feeling content with its features, a customer progresses to the satisfaction stage. Satisfied customers are more likely to return for future purchases and recommend the brand to others.
5. Loyalty
At the loyalty stage, customers have developed strong loyalty toward the brand, consistently choosing the company's product or service over competitors. These customers view the company as a trustworthy ally for quality services.
Advocates
The most loyal customers, advocates, go beyond making recurring purchases. They promote the brand through:
- Word-of-mouth recommendations
- Social media posts
- Reviews
- Referrals
Advocates are crucial in expanding the brand's customer base and enhancing its reputation.
AI-Powered Swag Boxes for Every Occasion
At Giftpack, our driving force is to simplify the corporate gifting process while maximizing the impact of each gift. Utilizing our custom AI algorithm, we create highly customized scenario swag box options for you. We deliver globally and have an extremely user-friendly platform. We curate the most fitting gifts from a vast catalog of over 3.5 million products worldwide (which is ever-increasing).
By carefully considering an individual's basic demographics, preferences, social media activity, and digital footprint, we tailor each gift selection process regardless if the recipient is an employee, a customer, a VIP client, a friend, or a family member. With a wide range of locally and globally sourced gifts, we ensure that personalized gifting is accessible and achievable on a large scale, delivering meaningful connections across the globe.
Try Giftpack's client gifting service for free today.
6 Strategies For Increasing Customer Loyalty
1. Personalized Customer Experience
Imagine walking into your favorite coffee shop, and the barista knows exactly how you like your coffee. Feels good, right? Personalization works the same way in business. Use data to understand your customers’ preferences and tailor their experience accordingly. Whether it’s personalized email recommendations, special offers on their favorite products, or a simple birthday greeting, these small gestures make customers feel valued and understood, fostering a deeper connection with your brand.
2. Exceptional Customer Service
Think about when you had an issue and a company resolved it quickly and efficiently. That’s the kind of experience that builds loyalty. Train your customer service team to be:
- Responsive
- Empathetic
- Proactive
Encourage them to go above and beyond to resolve customer issues. A happy customer is likelier to return and recommend your business to others. Good service can turn a negative experience into a positive one, creating loyal advocates for your brand.
3. Loyalty Programs and Rewards
Who doesn’t love a good reward? Implementing a loyalty program can be a game-changer. Offer points for every purchase that can be redeemed for discounts, free products, or exclusive perks. This not only incentivizes repeat purchases but also makes customers feel appreciated.
Make sure your loyalty program is easy to understand and use. The goal is to make your customers feel like they’re part of an exclusive club, enjoying benefits that regular customers don’t get.
4. Consistent Communication
Staying in touch with your customers helps keep your brand at the forefront of your mind. Regular communication through newsletters, social media updates, and personalized emails keeps your audience engaged.
Share valuable content to keep them interested, such as:
- Tips
- News
- Exclusive offers
But remember, it’s not just about selling but building a relationship. Listen to their feedback, respond to their comments, and show that you value their input.
5. Deliver Quality and Consistency
Customers come back because they trust your brand to deliver quality. Whether it’s the products you sell or the services you provide, ensure that your offerings are consistently excellent. Quality control should be a top priority, and any issues should be addressed promptly. Customers who know they can rely on you for quality and consistency will likely remain loyal.
6. Start a Loyalty Program
Customer loyalty programs can increase customer retention once an emotional connection is there. A customer loyalty or rewards program is a customer retention strategy that motivates consumers to buy from you instead of your competitors.
As part of a loyalty or rewards program, buyers receive discounts or freebies after reaching certain thresholds, like being a customer for one year. This incentive encourages shoppers to make more purchases.
Related Reading
• Customer Loyalty Survey • How To Reward Customer Loyalty • Customer Appreciation Event Ideas • How To Create A Loyalty Program • Customer Loyalty Program Examples • Customer Loyalty Programs For Restaurants • B2B Customer Loyalty Programs • Member Appreciation Ideas • Customer Recognition • Ideas For Customer Appreciation • Customer Appreciation Day Ideas For Banks • Complimentary Gifts For Customers • Customer Loyalty Ladder
How To Measure Customer Loyalty
Net Promoter Score (NPS)
The Net Promoter Score (NPS) is a reliable metric to evaluate customer loyalty. It starts with a straightforward question: "How likely are you to recommend our product/service to a friend or colleague?" Customers respond on a scale of 0 to 10, helping to categorize them into:
- Promoters
- Passives
- Detractors
By identifying Promoters who are loyal enthusiasts and detractors who can harm your brand, the NPS can provide insight into the proportion of genuinely loyal customers you have.
Customer Retention Rate
By measuring the customer retention rate, you can identify the percentage of customers who continue doing business with you over a certain period. It’s easy to gauge whether your customers are satisfied enough to stick around.
Calculating the retention rate requires simply comparing the number of customers at the beginning and end of a specific period and any new customers acquired during that time. A high retention rate generally indicates strong customer loyalty.
Repeat Purchase Rate
This metric examines the percentage of customers who make multiple purchases from your business. Essentially, it indicates how often customers return to buy more, showcasing their satisfaction with their experience and loyalty to your brand. You can pinpoint patterns and understand which products or services drive repeat business by tracking this rate.
Customer Lifetime Value (CLV)
Looking at the Customer Lifetime Value (CLV) provides a projection of the total revenue expected from a single customer account throughout their relationship with your business. It factors in elements such as:
- Purchase frequency
- Average order value
- Duration of the customer relationship
A higher CLV indicates that customers regularly make purchases and stay loyal over time, which is a positive indicator for your business.
Customer Feedback and Surveys
Engaging directly with customers through surveys, reviews, and testimonials is an invaluable measure of loyalty. Questions about overall satisfaction, likelihood to return, and areas for improvement can offer insights into customer sentiments about your brand. By interacting with customers and addressing their feedback, you demonstrate that you value their opinions, further solidifying loyalty.
What Are The Different Ways Of Rewarding Loyal Customers?
1. Personalized Gifts That Strengthen Customer Connections
Rather than offering generic discounts, brands can surprise customers with tailored gifts that reflect their preferences and purchasing habits.
- Sending thank-you gifts for milestones like anniversaries or lifetime spending thresholds.
- Curating personalized gift boxes based on customer preferences.
- Using customer data to deliver relevant and thoughtful rewards.
Example
A skincare brand uses customer purchase history to gift complementary skincare products, enhancing the customer experience while reinforcing brand loyalty.
A platform like Giftpack enables businesses to automate and personalize gifting, ensuring that each reward is meaningful and relevant to the customer.
2. VIP & Membership-Based Loyalty Perks
Creating exclusive experiences makes customers feel valued and strengthens brand commitment. Consider offering:
- Early access to new product launches or limited-edition collections.
- Personalized customer support for top-tier members.
- Surprise gifting to recognize high-value customers.
Example
A fashion retailer grants VIP members early access to an exclusive holiday collection, a personalized thank-you note, and a free styling session.
3. Experience-Based Rewards
Loyalty isn’t just about transactions—it’s also about memorable experiences. Brands can build deeper emotional connections through:
- Invitations to exclusive brand events, online masterclasses, or private sales.
- Personalized appreciation messages accompanied by a small, thoughtful gift.
- Perks that enhance the customer journey, such as priority service or curated product recommendations.
Example
A premium coffee subscription service surprises its long-term subscribers with an exclusive virtual coffee-tasting event and a custom coffee blend tailored to their tastes.
Giftpack allows brands to elevate their loyalty programs by integrating curated, experience-based rewards, making customer appreciation more engaging and impactful.
4. Smart Referral & Advocacy Incentives
Referral programs should reward more than just transactions—they should make loyal customers feel genuinely appreciated. Consider:
- Gifting high-value customers for their advocacy beyond just offering discounts.
- Rewarding referrals with personalized gifts rather than generic coupons.
- Creating an exclusive loyalty tier for repeat advocates.
Example
A wellness brand surprises customers who refer three friends with a premium self-care gift set, creating a more meaningful incentive than a standard discount code.
5. Recognizing Long-Term Loyalty with Thoughtful Rewards
Customers who have supported a brand for years deserve more than the occasional discount. Show appreciation by:
- Sending a personalized gift on customer anniversaries.
- Recognizing engagement beyond purchases, such as social media interactions.
- Offering unexpected perks to surprise and delight long-term customers.
Example
An online bookstore celebrates customers who have been with them for five years by sending a handpicked book based on past purchases, making them feel valued beyond their transactions.
Build A Meaningful Employee Recognition Program With Ease with Giftpack's Client Gifting Service
Giftpack is at the cutting edge of corporate gifting, utilizing artificial intelligence to simplify the process while maximizing the impact of each gift. With a vast catalog of over 3.5 million products available globally, Giftpack offers highly customized scenario swag box options. By leveraging an individual's basic demographics, preferences, social media activity, and digital footprint, Giftpack tailors each gift selection process to ensure a personalized experience.
The platform provides a wide range of locally and globally sourced gifts to create meaningful connections across the globe, whether it's for:
- Employee
- Customer
- VIP client
- Friend
- Family member
With global delivery and an extremely user-friendly platform, Giftpack offers accessible and achievable personalized gifting on a large scale. Ready to try Giftpack's client gifting service for free today?
Related Reading
• Customer Appreciation Events • Customer Recognition Programs • Inexpensive Customer Appreciation Gifts • Customer Loyalty Marketing Strategy • Customer Loyalty Program Software • Customer Loyalty Management • Customer Loyalty Strategies • Loyalty Program Integration • Loyalty Program Automation • Loyalty Business Model • Business Loyalty Program • Best Business Loyalty Programs • Customer Loyalty in Business • Business Customer Loyalty
Make your gifting efficient and improve employee attrition rates with Giftpack AI
Visit our product page to unlock the power of personalized employee appreciation gifts.
Click this Banner to book a call
Ask us anything about Corporate Gifting