Ask Auntie Social: How do I increase loyalty amongst my customers?

Retaining and growing the amount of money existing customers spend drives business growth. There are a number of ways to do this. It can be achieved by offering a great product or service that people want more of; by incentivising increased spend with volume discounts; by implementing a loyalty scheme or by bundling products together.

Careful planning is important to retain profitability. “Buy 3, get 50% off” is no good if your margin is 50%.

Protecting the brand and the pricing position is important. If the product is always discounted customers will never want to pay full price. Your brand will be ultimately devalued.

Striving for excellence in the product drives loyalty if you can offer a stronger product than any of your competitors.

Benefit’s Brow Bar provides a smart example of a loyalty scheme that protects the bottom line. The price of a treatment here is around €25. Profit on a single treatment is small. To drive repeat business and ensure high volumes Benefit needs customer loyalty. To do this the company offers part rewards on the journey. For example customers get a free tint after 3 purchases, a free shape after 6 and so on. This keeps them motivated. It generates sufficient business for Benefit to make a free treatment worthwhile and profitable.

A more classic example is the "Buy 10 get 1 Free" scheme with a cup of coffee.

It is worth noting that not all of your customers will engage with a loyalty scheme. Nevertheless a well thought out scheme can be very effective way to ensure repeat business.

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