Despite having an abundance of options, customers still generally prefer to give their money to the same handful of brands. Loyalty and trust will always be important factors in the average customer’s buying decisions. Businesses simply have to keep up with the latest retention strategies.
Here are some trending methods companies can employ to incentivize customer loyalty and boost retention in 2023. Businesses that successfully use these methods will be rewarded with repeat shoppers who are motivated to buy and share their experiences with others.
1. Know What Motivates Customers
All transactions between buyers and sellers are reflections of human nature. There is a growing body of research about the psychology behind people’s buying motivations. Businesses must understand their customers’ motivations to maintain brand loyalty. Here are some of the most powerful motivators and how companies can use them to establish loyalty:
- Survival: The product helps buyers meet basic survival needs, including food, water, shelter and clothing. Companies within these industries must appeal to their customers’ survival instincts to keep them engaged.
- Safety: The buyer feels a sense of security from the product and trusts the provider as a result. Maintaining this sense of security keeps the customer loyal.
- Status: The product or service helps the buyer enhance their social status. This factor mostly applies to high-end luxury brands. The company must ensure customers are seen, respected and connected to maintain their loyalty.
- Fulfillment: Sometimes, people make impulsive purchases to fulfill a personal goal. Helping customers reach their targets, no matter how trivial, is a simple and effective way to establish loyalty.
- Defiance: Defiance is another possible reason for impulsive purchases, especially among younger buyers. Businesses can use this motivation to their advantage and support their customers’ defiant acts.
Company leaders must identify which motivating factors apply to their products or services. Once they understand the underlying reasons for their customers’ buying behavior, they can create more effective retainment strategies.
2. Build Relationships First, Sales Second
The only way that businesses can discover their customers’ deepest motivations is by building relationships. Companies that stop engaging with shoppers immediately after the sale leave many insights and profits on the table. In fact, it costs five times more to onboard a new customer than to retain a repeat customer.
Building strong relationships requires personalized messaging. Customers won’t respond to cookie-cutter marketing tactics. Businesses must send uniquely relevant information to each shopper, and social media is the best place to start. They can use analytics tools to provide insights into customer attitudes and help cater messaging to individuals instead of large groups.
Social media also offers tons of information about customer behavior through their likes, comments and other interactions. Businesses can gather this information and slowly tailor a message that connects with a small customer profile. When connections are formed, sales often follow.
3. Demonstrate Social Responsibility
Gen Z and millennials comprise most of the U.S. consumer base. These generations want to buy from companies that commit to social responsibility. Although businesses might not be authorities on these issues, they must address climate change, sustainability, diversity, inclusion and other social justice topics.
Talking about these issues is just one part of social responsibility. Companies must also walk the walk with community involvement. They should partner with philanthropic organizations and other like-minded companies to support causes that are important to younger buyers. They must make efforts within their organizations to promote workplace equity and sustainability. Gen Z and millennial customers will notice these efforts and be more likely to remain loyal.
Companies can also demonstrate their social responsibility by hosting their own events with fun games and other team-building attractions. Gatherings devoted to women’s causes, Black history or LGBT inclusion are great examples. Making these marginalized groups feel included is crucial for establishing and retaining their loyalty.
4. Keep a Genuine Tone
Although companies are expected to talk about trending topics, people can still tell when the rhetoric isn’t genuine. Using generic marketing and advertising strategies with lots of buzzwords is no longer effective with the modern consumer. They want unique messaging with a new perspective on relevant issues in 2023.
For example, many companies tried connecting their products to the NCAA Men’s Basketball Tournament earlier this year. Many of the efforts felt inauthentic, with lots of forced celebrity cameos. Auto manufacturer Nissan took a different approach. Nissan paired a college mascot with a random public figure in a series of commercials, with each pair offering a 100% unique dynamic. Consumers want to see this kind of genuine enthusiasm in advertisements.
5. Reward Their Loyalty
Loyalty incentives are still excellent ways to reward long-term customers in 2023. Businesses across many industries have clubs or point systems that benefit people who spend the most money. Standard rewards include discounts for their favorite products, BOGO offers, gift packages and coupons redeemable at the time of their choosing.
Many companies are creating their own mobile apps to help people track their spending habits and loyalty rewards. Apps also make it easier for marketing managers to gather valuable insights and develop more effective personalized messaging. Instead of going through social media, email or text, businesses can contact their customers directly through the app.
6. Embrace the Influencers
Social media has given rise to a new important figure: the influencer. Social media influencers are powerful people among Gen Z and millennial consumers. More businesses are recruiting them as brand ambassadors to attract new customers in these generations. Influencers do a great job building hype around products and getting their fans to commit to the brand.
Influencer marketing is effectively an expanded version of word-of-mouth advertising and customer referrals. People referred to a new business by someone they trust are much more likely to trust the brand, too. Companies can use this strategy to expose their products and services to millions of people, making their identity synonymous with a popular public figure.
A New Era of Customer Loyalty
Customer loyalty has entered a new era in the 2020s. Conventional sales and marketing strategies no longer click with Gen Z and millennial consumers. Businesses must understand the psychology behind customer loyalty and embrace new retention strategies like social responsibility initiatives, mobile apps and influencer marketing. These strategies will be key players for retention in the digital age and help companies strengthen their brand in the eyes of consumers.
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