What’s the best mechanism for driving customer loyalty for your business?


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Loyal customers – something every brand wants more of……especially in today’s competitive market. It takes a lot of time and effort to acquire a new customer, yet some brands become perplexed when it comes to customer retention strategies.

Once the path to purchase journey is over, what next? How do you keep that customer engaged and loyal to your brand? Customer retention is vital for future survival and success, and with so many ways to reward customer loyalty and engagement, it can be challenging to truly understand which initiative is right for your customer and your business.

Creating a ‘stickiness’ with the customer

Loyalty points, tiered rewards, paid membership, ethics/value based incentives, punch cards, rebates, redemption coupons, partner collaboration schemes, geo-location targeting. This list goes way beyond a typical loyalty program, and is continuing to evolve. Brands are repeatedly searching for creative and innovative ways to keep their customers engaged with them, while at the same time not merely giving away margin as the only way to drive customer loyalty.

These strategies are essential to customer growth, you need to give the customer a reason to return, beyond great service and value for money – which are already expected. The only way you will succeed in doing so is by understanding your customers and their values.

Always bring it back to the customer

So many times we hear, “our competitors have an app, so we need one too” or “our competitors are doing this, so we should too”. Whilst it’s important to understand competitor tactics, you shouldn’t let them impact your own strategy or decision making. Remember to always bring it back to the customer, and what brings the most value to them.

The customer must be at the heart of any loyalty and engagement strategy. It should be what’s best for the customer as well as the business. An example; a restaurant offers diners a discount on a dinner special between 4pm-5pm as a way to drive traffic into their stores during a quieter period, While this may suit the restaurant, it’s an offer which most diners wouldn’t find attractive and can backfire, as savvy customers see right through it. Another example; a retailer offers a points program, in which you need to accumulate a ridiculous amount of points before being able to claim any reward or benefit. The customer will lose interest, feel extremely negative about the program and probably won’t even bother trying to gain points.

Reward the behaviour you want to influence

When deciding how to reward customer loyalty and engagement, you need to consider how the customer’s behaviour can help you grow your brand – that’s the behaviour you should be rewarding. You don’t necessarily need a loyalty program for this. It could be as simple as rewarding a customer for taking the time to complete an in store/online feedback form about their experience, a mention on social media, a thank you for visiting the website. A friend of mine recently posted a photo to her Instagram account of her daughter wearing an outfit from TKMaxx and tagged the brand – only to receive a direct ‘thank you’ message and $100 gift card to spend in store. Completely unexpected, and it will certainly influence positive word of mouth and future similar behaviour.

If you want to drive frequency, consider an initiative that will reward the customer for making continuous purchases, but make it worth their while. A good example here is The Coffee Club’s ‘gift a friend’ example, where members can buy a Coffee Club membership for a friend at half the price (high perceived value for the friend, and a new customer for the brand).

Targeting based on actual behaviour, not assumption

Earlier, we spoke about the importance of ‘bringing it back to the customer’. We cannot stress this enough. Once a customer has interacted with your brand, you start to collect data on that customer. The customer reveals who they are through this data, therefore how you action it will make all the difference. Monitor their behaviour to determine what and when their next likely purchase will be, or whether they may be drifting away from your brand. You will then be able to target much more effectively based on their actual behaviour, not an assumption.


Customers are time poor, they want convenience, and at the same time, they want a reason to return to a brand. To truly drive engagement and customer loyalty, you need to create a ‘stickiness’ with the customer, rewarding the behaviour you want to influence. Keep this in mind for your customer retention strategies, and consider the tactics which will help you achieve this.

Use the data you have to learn who your customers are, what they value and respond to. Track their behaviour so you can target them more effectively and establish the path to re-purchase.

Michael Barnard
Michael oversees a team of Customologists with combined talent across strategy, data science, and technology, who help brands understand and influence customer behaviours. Michael’s experience in human centred design is foundational in our principles of design thinking and starting with the customer, focusing on how brands engage, keep, and grow customers.


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