Blog | 22 March, 2018

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How promotions can drive customer loyalty

Offers, coupons, discounts and deals. Inevitably, there comes a time when most online merchants need to consider whether to offer discounts, when to offer discounts and how much the discounts should be worth.

 

Offering coupons and special offers can be a powerful weapon in your conversion arsenal to drive customer loyalty.

 

Why is customer loyalty so powerful? Focusing on customer loyalty is beneficial to most online retailers. One report by Stitch Labs found that return customers spend an average of 120% more over the course of a year. Customers are loyal to brands because of consistent, positive customer experiences with high-quality customer service and products. Some brands also have customer loyalty programs, which incentivise and reward repeat shoppers.

 

While customer loyalty can certainly be measured by looking at metrics such as number of purchases, purchase frequency, customer lifetime value, etc., true loyal customers are emotionally attached to a brand in some way. The most loyal customers become the biggest advocates for the brand, thus driving further customer acquisition. Peer to peer recommendations through word of mouth (or more likely through social sharing is extremely powerful.

 

One way to drive customer loyalty (and customer acquisition) is through offers, discounts and deals. But which tactics work best? Ultimately, businesses need to consider if offers and which type(s) of offers are right for their brand. For high-end brand or those with slimmer margins, sticking to customer loyalty-type offers as opposed to weekly sales works best. On the other hand, deep discounting and daily or weekly sales tend to work better for FMCGs.

 

The best approach is to choose a goal for every campaign and offer, start small, and measure the results.