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Rewarding Customer Loyalty Helps Boost Customer Retention

What is loyalty? What does it look like, how does it feel and, most importantly, where does it come from?

We’ll start off with an easy one. Who do you want loyalty from? Quite simply, anyone and everyone in your channel, from your distributors, wholesalers, resellers, to your own employees. Ultimately you want loyalty from your customers.

Loyal customers are by far the greatest asset any business can gather, but it’s not always portrayed that way. A lot of us are so busy chasing down new customers – looking to widen our impact within relevant markets so that more people are coming through our door than that door over there.

New customers are great – and, while they’re all unique, they are unified by one irrefutable truth: they don’t arrive loyal. It would be great if they did, but they don’t, hence the desire to make them loyal is a real opportune one.

What is Customer Retention and Why is it Important?

There are some things in life that we just want to hold onto, and in the same breath some that we don’t. In business, we want to hold onto customers because, as most of us know by now, retaining an existing customer will cost you significantly less than onboarding a new one.

Put simply, customer retention is keeping valuable customers. It’s not enough just to look at how many people are still subscribed to your business newsletter or emails, or even simply looking at how many people are signed up to your loyalty scheme. In fact, by some estimates, the average person is signed up to 9 loyalty schemes, but it’s highly probable that’s because they’re only going to have the brain space available to really take advantage of those 9 schemes.  


As such, customer retention is not a passive venture. It’s about creating a committed customer-base that pays off. And this starts with creating emotional connections which, if your B2B retention rate is high, you’re probably pulling off to some extent.

Where Does Customer Loyalty Come into it?

Truly loyal customers don’t just buy more from you (and less from your competitors), but they also brag about you – they feel a genuine enthusiasm for your brand that translates into more than just the point-of-sale itself. They’re the long-term, real deal, and they’re not just hanging around until you can no longer outdo yourself with promotional offers, reductions, and deals.

Loyal customers feel an emotional connection – one that is established through your continued efforts to strengthen that connection.

Let’s look at it from the other angle. Disloyal customers (or, more appropriately, customers who have never felt any sense of loyalty to you), will happily take their business to anyone. This may be down to convenience, it may be because of a specific promotional offer, or it may just be that they’re lukewarm to any business so their choice isn’t even a conscious thing.

If you’re simply focused on attracting new customers, you’re going to end up with a fleet of those lukewarm, will-they-won’t-they acquaintances. These customers are the ones you should absolutely avoid.

This is the opposite of customer retention. It’s onboarding new customers with no view to retaining them. It’s the quick fix to a slump in sales, desperate need to meet acquisition targets, or provide a false sense of security that you’ve got business guaranteed. But a word of caution here, this is not a long-term strategy and it will suffer from slumps in the future – that is guaranteed.

Why Reward Loyalty?

Even if a customer is demonstrating loyalty to you right now, there are no guarantees about the future. One of the biggest mistakes any company can make is getting lethargic about their loyal customers, and assuming that by simply giving out some rewards is the only thing their customer incentive programme should be focused toward.


Rewarding loyalty means actively retaining valuable customers – giving them a reason to stick with you that goes far beyond any temporary offer or promotion. This can come in the form of providing marketing support as part of your programme so the hard work of creating copy, visual styling etc is all sorted for them. Educating staff on the features and benefits of your products so all your customer has to do is absorb and repeat. It can also come in the form of providing branded merchandise especially if the brand materials are sought after and not easily available on the high street, if at all. And don’t forget products for display and display materials to help make the sales process frictionless.

The objective is to create those lukewarm & hot mercenaries, and not resting your business’s bottom line on the shoulders of people who could wander off at any moment. That is really simply as risky as it sounds.

This rule applies whether you’re a straightforward B2C company, or looking to incentivise a longer marketing chain of B2B relationships. Regardless of how many contacts are involved in the chain, the basic principles of building and maintaining loyalty for the long haul – and how valuable it can be for you – are the same.

Focus your attention as much on retention as you do on acquisition and you are sure to create a winning formula that’s sustainable over time.

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