Attracting and converting new customers is great, but it’s only one half of the equation — retention is just as (if not more) important.
If the new customers you spent so much money on and worked so hard to get never transact again, you end up with a leaky bucket problem: just as many customers as you bring in during a quarter leave during that same time period.
And that problem takes even more budget, time, and effort to overcome.
The best countermeasure against churn is loyalty. But fostering it among your customer base is easier said than done — hand-written thank you notes aren’t going to cut it anymore.
Below, we outline three actionable strategies for delivering value at every stage of the customer journey and creating meaningful experiences that lead to long-term growth.
We spent the first few months of the year compiling a list of the most compelling growth hacks — and we’re giving them away for free.
Download your copy here.
How to strengthen customer loyalty
1. Start (or revamp) a rewards program
Rewards programs can do it all — they drive brand awareness, target new (lucrative) audiences, incremental revenue, and re-engage lapsed customers.
Most importantly, though, they drive long-term value. And that creates customers for life.
As you design a rewards program, be sure that it:
Gives people a reason to purchase
Instead of relying heavily on discounts, savvy retailers are offering incentives that resonate with today’s cost-conscious consumers — offers like cash back.
A study from Banyan and PYMNTS showed that 55% of first-time card-linked offer users were drawn in by cash back rewards. By addressing the needs of cost-conscious consumers, brands gave users a compelling reason to buy — and gave themselves an opportunity to convert those new customers into loyal ones.
But cash back isn’t the only way you can incentivize folks with transaction-linked offers.
Platforms like Kard are rolling out item-specific rewards, location-based offers, category discounts, and even “offer boosts” and customized notifications to nudge consumers toward making a purchase.
Actionable tip
There are many ways to keep people coming back to your brand, but one very concrete way to do it through transaction-linked offers is to design a cascading offer, where:
- First-time buyers get 15% off
- Second-time buyers get 10% of
- Third-time buyers get 5% off
Reaches the audience you want (including the elusive Gen Zers)
Gen Z and Millennial generations have the potential to become your most loyal customers for decades to come.
But they’re blocking your banner ads, skipping your video ads, and recycling magazines before they can see your print ads.
Modern rewards platforms allow you to target this audience with precision — without your offer feeling like an ad.
A majority of Kard’s issuer partners cater specifically to Gen Zers and Millennials. Our other EBT, HSA, receipt-based reward, BNPL platform, and money management app partners put your offers in front of families, pet owners, entrepreneurs, and other tech-savvy customers you want to convert.
Gives you high-quality data
First-party transaction data provides granular insights into consumer buying behavior as it pertains to merchant verticals and brand loyalty.
This level of detail helps marketers target their ad spend more effectively. The problem is that most companies don’t have comprehensive first-party datasets.
According to a study by the Boston Consulting Group, only about 30% of companies are creating a single customer view across channels, and just 1% to 2% are using data to deliver a full cross-channel experience for their customers.
Transaction-linked rewards platforms like Kard can marry transactions directly to consumer behavior, revealing:
- How big their average order is
- When they usually spend money (seasonality)
- How often come back after using a card-linked offer
Access to purchase data insights like these can help you identify and adapt your offers (plus all of your other marketing strategies) to changing consumer behavior, stretching your ad dollars further.
2. Build and nurture a community
Most marketers are good at emphasizing the base value of their product or service in their ads and content. But there could be so much more value to offer tangential to your actual product.
Take Nike Run Club, LEGO Ideas, or Sephora’s Beauty Insider program. Each of these communities are what make customers feel connected to the brands they love.
You can create community by leaving personalized comments on social media posts and product reviews, featuring real customers in your campaigns, and re-posting user-generated content. You could also:
- Run giveaways
- Invite customers to events
- Launch ambassador programs
- Provide highly tailored educational content
If building a community is more of a project than you and your team can take on, consider tapping into strategic partnerships.
Other companies who are in a peripheral or similar space may have tips and tricks to share about community-building and they can lighten the load by co-sponsoring and co-marketing specific events or promos.
3. Introduce a subscription model
Subscription models aren’t just for streaming services. They can be for merchants, too — and brands are waking up to this reality.
- Fabletics offers a VIP membership providing discounted pricing and access to new activewear collections.
- Birchbox provides a monthly subscription box featuring curated beauty product samples, allowing customers to discover new items.
- Amazon, Walmart, and Target all have subscription programs that incentivize customers to keep making purchases with exclusive deals.
Though many brands are making this shift, it’s still hard for leadership to buy in. That’s because it’s really hard to get customers to sign up for a subscription plan.
It’s so hard that marketers have spent years trying to solve it, using everything from billboards to podcast ads to influencer marketing to convince consumers to make that first purchase.
Transaction-linked offers present a different way to capture people’s attention. And they are particularly effective in subscription-based businesses because they create a win-win situation for both merchants and customers: customers get cash back and merchants get a steady revenue stream.
Read more about the potential win-wins of CLO + subscription here.
Want free impressions, higher AOV, and a derisked marketing mix?
Meet with our team to see what Kard’s transaction-linked offers can do for you.
Or, if you’re not ready to chat yet, but want to learn more, these blogs might interest you:
