Sylwia Madej

The influence of Getloyalty programs on customer retention

Introducing a loyalty program or loyalty-based solution has a measurable impact on higher spending efficiency, increases reach, broadens brand awareness, and enables you to attract new customers.

Introducing a loyalty program or loyalty-based solution has a measurable impact on higher spending efficiency, increases reach, broadens brand awareness, and enables you to attract new customers.

In loyalty marketing, four distinctive consumer behaviors can be identified: making regular repeat purchases, purchasing other products products, giving positive feedback about the trader, and low susceptibility to the actions of competitors.

Loyalty in itself is a broad topic. With the development of technology and progress of civilization, it has become important also in the market activity of the company. Loyalty programs are a set of tools building customer commitment and trust. The specificity of a given market and customer profile allows a company to accurately select and use the tools necessary to shape and sustain loyalty. When determining the factors that influence customer loyalty, the first that comes to mind is the market price of the product. The lower the price, the more advantageous the offer, but quality does not always go hand in hand with price, which is also an important motivator to remain a loyal customer. Important factors influencing loyalty also include professional customer service, which is related to service or complaints (a positive response to a complaint may significantly influence the acquisition of loyal customers). The latter is an element on the basis of which buying behavior is largely formed: customers value the assistance of staff, their understanding and professionalism. Another reason for the formation of customer loyalty is the very habit of buyers to make purchases. It is a kind of emotional bond, the buyer’s conviction of the unique qualities of the purchased product.

Having loyal customers is very beneficial to a business. A benefit worth mentioning is that loyal customers are also advocates for the company and are able to accept a higher price for the good offered than is the case with first-time buyers.

Constant changes on the market contribute to changes in loyalty, and thus it ceases to be the company’s only and permanent asset. It is an element that must be periodically monitored, strengthened and enriched. The company should build a continuous relationship with the customer, take care of it, which leads to longer and more effective relationships with buyers.

It should also be emphasized that building loyalty is a process, not a single event, which means that the various stages of its development are not short-term activities. Loyalists are people who are so satisfied with their purchases or with a given offer that their satisfaction influences them to repeat purchase decisions. The intermediate level, i.e. consumers who repeat purchases, may include a group of customers referred to as interested. Stakeholders are a group of customers characterized by high satisfaction with their purchase, but also very troublesome for the company. They condition their loyalty especially on price, and their lack of satisfaction causes them to look for new, more beneficial offers. However, one more group should be taken into account – the so-called deserters and pests. This group includes both unsatisfied and indifferent customers, as well as those satisfied. Deserters are customers who have left the brand, and keeping this type of buyers is not profitable for the company itself. Detractors are customers who have a negative attitude towards the company, which is usually caused by previous bad experiences with the brand. Such a person does not hide his frustration and dissatisfaction. The company realizes very late that the negative attitude of the customer may be caused by lack of professionalism of the staff, low quality of the product or the service. The actions of pests can be very painful for the condition and reputation of the company, their bad opinions have stronger impact than positive opinions from loyalists.

The customer life cycle is very often used by companies because it allows them to build a long-term relationship between the customer and the company, as it allows them to determine the position of the customer and predict their actions. It not only structures the buyer’s position throughout the buying decision process, but also prompts companies to take actions that are consistent with the various stages of involvement and awareness in the purchase of a product. It turns out to be important to precisely align the marketing communication strategy with the buyer and to correctly read the buyer’s intentions.

When choosing a program, you should also be guided by what group of customers you want it to reach. There are three basic groups: the first of these is the so-called currently most important customers for the company, i.e. special attention is paid to the financial results, the profits made by the most important customers. In this approach, the loyalty program focuses mainly on increasing the number of purchases. Equally important here is the strengthening of customer relationships, the loyalty program will aim to retain the most important customers by creating barriers to departure. Another group of buyers are the prospective customers, who will be important customers for the company in the near future. All loyalty activities in this group are aimed at creating future relationships. The last group consists of currently unsatisfied customers. This group does not ensure that the company will achieve the required results. In this group, the company should determine in detail what are the reasons for this state of affairs, and possibly use appropriately formulated tools aimed at rewarding the desired behavior of buyers.

Loyalty is a very complex issue, it is based on the whole behavior of the buyer towards the activities of the organization. With economic development, the „demand for a loyal customer”, a customer who will be a brand ambassador, has also increased.