Marketers Guide To Customer Loyalty
Marketers Guide To Customer Loyalty
Marketers Guide To Customer Loyalty
Intro . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Types of Loyalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Wrapping it up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160
Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161
Welcome to Marketer’s Guide to Customer Loyalty! Whether
you’re new to building customer loyalty or are looking to
refresh your knowledge, this guide is the perfect place to
start. Packed with loyalty best practices, advice for how to
track and measure success, and actionable tips you can use in
your next loyalty campaign, this guide provides the tools you
need to double down on your brand’s loyalty efforts.
1
What Is Loyalty?
2
We’ll dig deep into the true definition of loyalty and
what it means for your brand later on in the guide.
3
But don’t let that low number fool you. In the same
study, the same 20% of the average brand’s customers
drove 80% of its total revenue, and 72% of the total
visits to the business. Those numbers are significant,
and marketers can no longer ignore the fact that
moving customers into their “loyal” cohort is vital to the
longevity and success of a brand. For brands competing
to win their markets, now is the time to focus on
increasing that loyal 20%.
4
this guide, you’re not only investing in the customer
and enriching your brand’s experience; you’re investing
in yourself by adding vital tools to your professional
arsenal to do your job better, and to keep customers at
the center of your work.
5
• Make a case for investing in building customer
loyalty, and debunk myths around why building
loyalty isn’t worth the time and effort.
6
• Measure and quantify your loyalty KPIs, and learn
the necessary skills to level up your efforts in order
to reach lofty loyalty goals.
7
There’s nothing better than snuggling up with a cup of
coffee and the BigDoor Guide to Customer Loyalty :) .
8
THE NEW REALITY OF LOYALTY
9
Loyalty. What a big concept for such a small word. If
you had told us a decade ago that marketing channels
would one day all converge at a singular goal, we’re
not sure we would have believed you. But here we sit,
hundreds of thousands of marketers using their favorite
channels to connect with customers, provide great
experiences, and ultimately, build customer loyalty.
10
We hear both camps ask how they can think outside
of the box to reach more customers, and connect with
them in beautiful ways.
11
Traditional Sales Process
12
But then the market caught up again. That darn market.
Today, companies not only need to have what people
are looking for and present themselves in unique and
beautiful ways, but they need to invest in customers like
never before. Building customer loyalty will be the new
line in the sand. Companies that invest in creating a
loyal following will survive, and those that don’t...won’t.
It’s as simple and scary as it sounds.
13
and rewarding them for their investment in your brand?
These are not just good marketing ideas; they are the
new norm for growing your customer base.
14
Back in the day, loyalty started
after the sale.
Discovery
Free members
Customers
Loyal customers
15
Today, things are different.
Loyalty starts the second
customers discover you.
Discovery
Free members
Customers
Loyal customers
16
As you can see, every step of the customer’s journey is
an opportunity for brands and the marketers that build
them to seed customer loyalty. Every marketer is now
expected to add the “build customer loyalty” bullet to
their job descriptions. With one eye on revenue and the
other on customer loyalty, marketers are now set up to
build brilliant companies and brands that are loved by
the masses.
17
We are in the middle of a perfect storm where brands
now have the tools to listen to customers, and
customers have the tools to speak up. It’s accepted to
demand more as a customer, and it’s acceptable to walk
away from a brand if they don’t meet your demands.
18
MYTHS AROUND BUILDING LOYALTY
19
Myths. Excuses. Bad habits. Call them what you’d like,
there are a lot of reasons marketers fail to take on
building customer loyalty. Here at BigDoor, we live for
busting those myths wide open and uncovering the
reality: we should all be investing in customer loyalty
and helping foster it for our companies.
20
Loyalty Happens
Organically
21
Rather than simply telling yourself that loyalty happens
organically over time, why not make it a company-wide
priority? It’s this level of customer-centric conversation
that gives some brands huge advantages over their
competitors. If you sit back and wait for customers to
love you when they are ready, you aren’t just hurting
your bottom line; you are doing those customers a
great disservice.
Loyalty Doesn’t
Happen Until After
Conversion
22
based conversion is a great indication that a customer
might have affinity toward your brand, it in no way
declares their loyalty to you.
23
PRESS
BLOG
CONTENT
NEWSLETTER
WEBSITE
BANNER ADS
IN-STORE
MOBILE
WORD-OF-MOUTH
SOCIAL MEDIA
REVIEWS
SALES TEAM
24
Building Loyalty is
Someone Else’s Job
25
HOW THEY SUPPORT
TEAM
THE CUSTOMERS
26
But what does that look like? How can such an
important initiative be managed successfully across
departments? To address who internally manages
loyalty, Chapter 8 of this guide is chock full of tips for
creating a culture of customer loyalty at your company.
It’s the “we are all responsible” mindset that elevates
some companies to the top of their industries. Every
team has something unique to add when supporting
the customer.
27
Customer Loyalty is
Impossible to Track
28
Below are some common metrics associated with
customer loyalty.
• User registration
• Length of visit
• Frequency of visit
• Recency of last visit
• LTV
• Google Analytics insights
While these metrics are all important, marketers
should always be giving their data a story that makes
it relevant to the business. We shouldn’t assume these
independent counts tell enough of the story around
whether or not our customers are growing with our
brands and truly falling in love with them.
29
Customer loyalty isn’t impossible to track.
30
“ In the end, the customer doesn’t know, or care, if
you are small or large as an organization. She or he
only focuses on the garment hanging on the rail in
the store. ”
- Giorgio Armani, Armani
31
You Can Invest in
Loyalty Once and Then
Forget it
32
In fact, many of our favorite brands have even backed the
customer into their core company values and promises.
Now that is front and center! That is dedication. Check out
these great examples of commitment to the customer at
the heart of company goals:
33
You can’t just invest in customer loyalty once
and forget it. You need to make building
loyalty part of your company’s core values.
34
loyalty.” That’s a real thing. Some customers never
develop an affinity for a brand, but it’s an incredibly
small percentage of the average customer base.
35
This new and mobile generation is empowered to
demand brand authenticity, and in return, they
advocate on the brand’s behalf to their friends and
social circles. Brands can tap into the mobile and social
approach to connectivity their target consumers live in.
One more reason that there has never been a better
time to invest in customer loyalty.
In Conclusion
36
Brands that keep coming up with excuses not to do so
will inevitably get passed by their competitors on the
climb to the top.
37
WHAT’S WORKING IN LOYALTY?
38
In this chapter, we cover some best practices to keep
in mind when creating brand loyalty. We also point to
some of the best brands out there, and examine what
they are doing in order to stand out from the crowd.
39
A Customer Focus
40
Many marketers confuse being customer-focused
with customer centricity. Let’s take a quick minute to
differentiate between the two as the divide is actually
quite vast. While customer-focused marketing means
asking what more you can give them, customer-centric
marketing means asking yourself, “What more can we
get out of them?” The latter question can be answered
by focusing your marketing efforts on your highest
value customer cohort.
Customer-centric Customer-focused
41
Customer focused-marketing, for our purposes here,
is at the core of delivering a personalized, relevant
experience, which is the first step toward fostering
loyalty.
42
What Nike was able to accomplish was making every
customer feel like they were at the heart of their
marketing efforts, and that their products and services
focused on each customer with their needs top-of-mind.
This is a great example of customer-focused marketing
done right.
Innovative Customer
Communications
43
Email marketing: Tried and true. To this day, there
has been no better way to stay in touch with customers
in an ongoing manner than email. Based on the Direct
Marketing Association’s 2013 study, 90% of consumers
(with access to email) subscribe to emails from trusted
brands (DMA, fast.MAP, and Alchemy Worx’s Email
Tracking Report 2013). To build loyalty, your brand needs
to stay front-of-mind with scheduled communication.
Brands should make promises to their customers
and then deliver on them, and all of that needs to be
communicated regularly. While email marketing might
seem outdated, it is still incredibly relevant.
44
A great example of well-designed email marketing is
ModCloth, the online-based fashion retailer for women.
45
newsletter apart from competitors, which is something
all brands can aspire to.
46
While social media can be very overwhelming to jump
into, trust us when we say it’s worth it. Start small and
participate in one or two platforms. When picking your
first social media platform, choose the one that the
majority of your current customers are already on, and
embrace its culture and customs. Don’t be scared; it’s
friendly in there, we promise!
47
For example, Zappos is a brand who has answered the
call, going above and beyond to offer the best customer
service possible. Whether they’re mailing flowers to
customers with medical issues, sending service reps
to competing stores to buy products when they run
out of stock, or paying for tolls on the Massachusetts
turnpike just because it’s the holidays (FYI, these are all
actions the Zappos team has actually taken!), Zappos
has set the bar for every other brand when it comes to
delivering top-notch customer service.
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Customer Service Includes:
Then Now
Survey/feedback channel
Nurture community
49
What can you do with snail mail, you ask? This is the
perfect way to send thank you packages, customer
outreach messages, customer gifts, or other. Whatever
you decide, offline communications are worth
considering. Today, we spend so much of our time
online, and we are so conditioned for electronic-only
exchanges. Brands today are sending handwritten
cards, boxes of branded swag, and so much more as
ways of saying thank you, and it makes them stand out;
the interruption of a tangible card or gift goes a long
way. Here at BigDoor, we are fans of this return to snail
mail movement and believe it’s this sort of “go above
and beyond” type of marketing that really sticks with a
customer.
50
Freshen Up Your User
Experience
51
“ The savviest marketing strategies and the most
efficient customer service processes won’t deliver
loyal customers if those customers don’t have a
positive experience with your product. ”
- Jesse J Garrett, Director User Experience Strategy at Adaptive
Path
52
No matter how well you think your user experience
is performing today, there is always room for
improvement. By testing, updating, and communicating
these experience updates, you are reminding your
customers just how important they are to you. Good
stuff all around.
53
giving them their time, money, and support; rewarding
customers for all of this is a pretty big deal. We go into
more detail on ways to leverage rewards in Chapter
6, but decided to touch on them briefly here as many
brands have been using rewards successfully for years.
54
and even more impressive, it’s hard to find a person
that doesn’t participate in one of their loyalty efforts.
Through personalized rewards, redeemable points for
drinks and food, and a plethora of incentivized quests
for customers to choose from, Starbucks has set an
inspiring standard for other brands to live up to.
55
Lowes, the home improvement store, took thought
leadership to a whole new level last year when they
released their “Creative Ideas” blog. Lowes hired a
group of bloggers to begin publishing craft and project
ideas customers could complete using materials bought
in their stores, and eventually expanded their network
to guest bloggers who are leaders in specific project
areas, like gardening, handyman work, and more. Not
only did this marketing campaign attract a whole new
audience of DIYers to become Lowes customers, but
it made the brand a major contender in the DIY space.
People will buy things from brands who teach them
something new, and Lowes is currently reaping the
rewards of doing just that.
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should offer a home for educational content that is
beautiful and useful. That said, this sort of goodwill
marketing really stands out in a crowd of content that is
often shipped just to benefit the company.
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TYPES OF LOYALTY
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Not all loyalty is created equal. Marketers know this
intuitively, but breaking out of our customer audiences
and trying to understand specific behavior as it relates
to levels of loyalty is hard to do. Sometimes it’s even
impossible to do without a team of analysts and
technical resources. So where can you start?
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Four Types of Loyalty
No Loyalty
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Inertia Loyalty
Latent Loyalty
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by introducing new products at lower prices to help
encourage customer advocacy. When a customer is
inclined to purchase from you “always,” they are also on
the edge of advocating for you. Latently loyal customers
tend to carry a lot of pride with their purchases.
Premium Loyalty
62
is a fifth type of loyalty to consider. A better type of
loyalty. It’s called reciprocal loyalty.
63
In a nutshell, reciprocal loyalty is loyalty that goes both
ways. It’s a two-way street of support and appreciation.
At BigDoor, we believe this is the right way to view
loyalty. For decades, companies have worked hard to
get loyalty, but have not worked hard enough at being
loyal to their customers in return in order to keep
themselves in business.
64
signal that you are thinking differently than your
competitors. The brands who do this well tend to be
called out for their innovative approach to customer-
focused marketing.
65
Examples of Reciprocal Loyalty
66
in for emails and branded content discovery). The
program has something for every customer to love,
complete with seasonal campaigns and a free drink on
every customer’s birthday just for signing up.
67
and runs, tracking weight loss, and participating in
physical activities.
68
The Sephora Beauty Insider offers members the
chance to earn points for purchases, but unlike many
other retailers, the points can be redeemed for a wide
variety of items rather than just for in-store credit or a
percentage off of a purchase.
69
approach to say thank you to their loyal members,
making sure that every customer can find something
they love. Although the majority of the rewards Sephora
offers are tangible, they also offer deep discounts
through engagement with their mobile apps. On top of
great rewards, just look at Beauty Insider’s branding!
Stunning design, catchy marketing vibes, and more. This
program was truly designed for the customer!
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customer loyalty this way,” it simply isn’t the case. Let’s
talk about the structural pieces that need to be in place
to see reciprocal loyalty work for your company.
Feedback Loops
It may seem obvious, but without having an
infrastructure in place to capture customer needs, it will
be challenging to deliver on those requests. We could
write another guide on customer analytics and data
mining the customer voice, but for our purposes here,
let’s point to some of the obvious channels: survey your
customers; connect with your help team who talks to
customers and captures their requests; work with your
product team to tap into product requests and forms;
and lastly, data mine the cancellation forms for insights
on what the customer was looking for. Look for ways
to connect with customers in real life: at conferences,
forums, networking events, and more, and really tap
into what they would like to see from you. This is the
foundational information that will help inform your
customer-focused strategy.
71
Customer Advisory Boards
Stemming off the last point of feedback loops, we
highly suggest you invest in a customer advisory
board (or CAB, for short). A CAB is a randomly selected
group of current customers that provides feedback
on feature ideas, current products, messaging, and
more. Feedback can be gathered through phone, email,
Google+ hangout, or whatever medium you prefer.
However you talk with your CAB, try to touch base often
and have informal conversations with your customers
to really keep a pulse on what they are seeing and
needing. Your CAB should stay small, and represent
the larger customer base. You can randomly select
from different demographics, customer lifecycles,
geographical areas, and more in order to mirror your
customer base closely. This sort of customer voice is
irreplaceable, and is insanely hard to get at in traditional
feedback loops.
72
it means. They are also responsible for pointing to
examples, collecting data, evangelizing the cause,
and more. These champions keep the energy high
for this new approach until it proves itself and gains
a momentum all its own. We find this champion is
often already in place in your organization; they just
need a little support to really lead the transition from
traditional loyalty approaches to a new customer-
focused, mutually beneficial, high-value approach to
loyalty.
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any change, it doesn’t come without hard work and
patience.
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TRADITIONAL CHANNELS FOR
BUILDING LOYALTY
75
Loyalty marketing of yesteryear no longer works for
today’s consumer. But before we can improve on
loyalty marketing, we must understand its roots and
progression over time. Like most pieces of history, we
can look at what worked and what didn’t, and take the
pieces that are still relevant in order to innovate on
them.
Points-based Programs
76
Green Stamps distributed tiny stamps to customers
when they purchased stamp booklets from participating
retailers. The stamps acted as a form of “currency” that
could eventually be redeemed for products when the
customer accumulated enough, driving loyalty from the
consumer due to “free” products, and happiness for the
brand due to repeat visits and purchases.
77
Not surprisingly, points-based programs are still a
wildly popular way for brands to build loyalty. These
types of rewards continue to be so successful because
of the incentive created for customers: the brand sets
an attainable goal that ties in with purchases and/or
actions customers are likely to take, and customers earn
points for increasing their purchases and/or actions. It’s
simple, it’s straightforward, and it’s timeless.
78
Reactive-driven Customer
Service
79
issues were buried due to overload. Through advances
in social media and great customer service tools, today’s
consumers don’t have time to wait on the phone for an
hour before getting an answer, and as brand marketers,
we have the tools to get them the answers they need
quickly and effectively, causing minimal frustration for
the customer and our brand through the boundless
advantages of modern technology to help deliver
answers.
80
Today, it’s easier than ever for customers to interact
with their favorite brands, whether they need help or
are reaching out to share their love. Social networks,
email, phone calls, and in-store interaction are all
communication channels your customers are reaching
out to you on, and the expectation of a quick response
is the new norm. Even the team that primarily handles
customer service has changed. Although help teams
still exist, there are many companies creating special
“customer success” teams that merge social media
strategists, content creators, and retention marketers
with help team members to form an amazing resource
that benefits their customers.
81
Marketers have a lot of communication
channels available to help them reach and
connect with customers. Here are a few of our
favorites:
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Customer service that will win in today’s space follows
their customers’ journeys, looks for holes along the way,
and works to fill those holes with helpful content, useful
on-site information, and unlimited availability before
the customer even has a chance to submit a complaint.
At BigDoor, we think the best kind of customer service
is proactive, and believe that brands who invest in
providing a seamless customer service flow will win.
83
your program difficult to join. When exclusivity is used
right, it can make your brand or product the hottest
thing around (just ask the Google Glass team), but when
it comes to building lasting loyalty, true exclusivity can
also be the ultimate killjoy.
84
At BigDoor, we know that every brand’s needs are
different, and that there might be times when an
exclusive offering will work wonders for building
loyalty. However, we seldom recommend making
loyalty campaigns or programs exclusive right out of
the gate as the negative results tend to far outweigh
the benefits. There is a very small group of brands who
use exclusive loyalty programs to their advantage, but
if your product is meant for the masses, exclusivity in
your program will likely have a negative effect on your
brand loyalty.
85
Tangible Rewards-only
Programs
86
your brand through delivery, packaging, and branding.
Tangible rewards also offer an opportunity for a brand
to engage consumers in a forward-facing way. For
example, a branded baseball hat signed by a famous
player delivers a positive experience, but also ties the
consumer directly back to the brand, increasing brand
affinity and building loyalty. But before you place your
order for 5,000 hats, make sure you give some serious
thought to what your brand slaps its logo on before
sending it out as a reward. Many failed marketing
campaigns fail when branding and distribution go
horribly wrong.
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Even though there might be added value to the brand
and the program through tangible rewards, the
overall cost to the brand might not be worth it. It’s
also important to note that physical products don’t
always drive loyalty. Time and time again, studies prove
that physical rewards don’t have the desired effects.
Consumers tend to choose experiences with brands
over physical goods, and as the world becomes more
digital, tangible rewards tend to lose their flare to digital
rewards and experiential rewards. Tangible items
might drive brand affinity for a short amount of time,
but when it comes to driving lasting loyalty, consider
yourself pushed to the bottom of the pile — much like
that $5 t-shirt you sent out last month.
88
Loyalty in a Silo
89
determine once you know how customers are already
interacting with your brand.
What’s Next?
90
old tactics aren’t resonating with new users, and adapt
their processes. However, next generation loyalty is not
just about utilizing new channels; it’s imperative that
it breaks down the silos between silos, and delivers
a holistic experience for both loyalty marketers and
consumers.
91
NEW CHANNELS FOR
BUILDING LOYALTY
92
Now that we’ve covered the loyalty approaches of
yesterday, let’s cover what is working in loyalty today.
With new channels and new tools have come new
ways to connect with your customers and seed loyalty.
In this chapter, we walk through some of these new
opportunities, give you a few examples, and hopefully
provide the nudge you need to get moving on your own
campaigns. Let’s start with what building loyalty looks
like today.
93
actions other than purchases, and engages customers
in new, innovative ways.
First, the shift has altered the way retailers who weren’t
sure how to approach building customer loyalty are
currently interacting with customers through loyalty
programs. We now see more resources available to get
a loyalty program up and running than ever before.
Companies (BigDoor included) now offer products that
help other companies customize and launch on-brand
loyalty programs that aren’t just templates of the “same
old thing.”
94
drive readership, sharing, and commenting, which are
actions the majority of publishers consider valuable
in building a loyal customer base. Rewards no longer
have to be purchase-based; they can be handed out
for softer actions that are valuable to publishers, like
commenting on a piece of content, referring a friend to
the program, or watching promotional videos.
95
We believe the loyalty game is just revving up. What
previously seemed like a templated, points-based, high
cost venture is now an accessible, streamlined, and low-
cost advantage in your market. The loyalty programs
of today are quite different than those of the past, and
they are only getting better.
96
stress a very important (and often overlooked) point:
every company can participate actively in creating
loyalty. Contrary to popular belief, you don’t need to
have a complete loyalty program to succeed at building
loyalty.
97
the option of supporting different seasonal efforts or
special promotions. There is typically a great deal of
flexibility when running a loyalty campaign, so brands
can also test variables easier, track performance faster,
and iterate quicker. There are plenty of advantages
to testing out your loyalty initiatives with a campaign
before jumping in to a loyalty program from the get go.
Experiential Rewards
98
What are experiential rewards?
Experiential rewards are rewards that are
experience-based, such as sweepstakes, social
media shoutouts, access to otherwise inaccessible
events or content, etc.
99
them with a pen?!), why not give them something to
truly shoot for?
100
Sprout It is a small startup that offers an app to help
gardeners grow their own plants and vegetables
through customized planting and harvesting tips.
Their backyard takeover campaign offered customers
the chance to win awesome gardening prizes, with
one lucky winner winning a $1,000 gift card to Home
Depot, along with a professional, custom design for
their own backyard. To enter, customers simply had to
upload photos to Twitter and/or Instagram of their own
backyard projects.
Social Media
101
impacting the customer loyalty space. It has provided
companies with both a way to communicate with the
masses, and to enhance their existing loyalty programs
with new experiences and rewards.
102
of. Customer feedback is at the heart of successful
businesses and their product roadmaps, and using
social media to ask customers their opinions in order to
make good on their feedback is a fantastic way to foster
trust and loyalty.
103
All of these points combined makes social media a real
game-changer for the loyalty space. If your company
isn’t participating in or investing in social media, you are
ultimately at a disadvantage to those brands who are.
Jump on that social bandwagon already!
104
made before a loyalty program can even go live. This
involves questions around the set up of the program’s
economy, rewards, redemptions, and so on. To provide
a streamlined and beautiful experience from beginning
to end is hard, but it’s also become the industry
standard. “Just getting by” with clunky interfaces is
definitely a thing of the past. This is one of the reasons
why we suggest pulling in a company focused on
creating loyalty programs in order to help a brand new
to building loyalty; the design and UX is critical to the
program’s success.
105
Making sure your loyalty efforts are consistent
with your brand is a huge part of success. In the
past (and unfortunately today, in some instances),
many companies had separate site experiences
for their loyalty programs and campaigns. These
disjointed experiences are incredibly detrimental to
the overall success of a loyalty program. Instead, the
user experience should be baked into the everyday
interactions they take with your brand: on the website,
on a mobile device, in an app, and so on. The design
of this type of multi-touch process must remind the
user constantly that your brand is behind this program,
and that you’re dedicated to making their experience a
wonderful one.
106
Omni-channel Loyalty
Booooo.
107
There are many reasons why companies who are
taking the omni-channel approach to loyalty and online
content are rising above their competitors, including
the rise of the mobile landscape. Mobile usage is an
exploding statistic that can no longer be ignored when
brands decide which channels their loyalty programs
will be available on. In 2013, mobile usage grew to 45%
of all Internet interaction in America, not to mention
other countries like China where the percentage of
mobile interaction has officially surpassed traditional
desktop usage (KPCB Internet Trends 2013). If your
brand’s loyalty initiative is not accessible on a mobile
device, you’re losing out on a serious opportunity for
growth.
108
mistake. When creating your next campaign, you need
to ask yourself:
109
them come back. We can now take this data and use it
to encourage even deeper engagement to build loyalty.
110
each group in order to provide the best outcome, both
for them and our companies. It’s a win-win.
Looking Ahead
111
In the next chapter, we get into the nitty gritty of
measuring customer loyalty. Oftentimes, people think
it’s impossible to measure customer loyalty, and it’s very
much the opposite. The data is there, and we’ve seen
the emergence of new tools, new formulas, and new
approaches to measuring customer loyalty. Let’s get
into Chapter 7 to learn more.
112
HOW TO MEASURE LOYALTY
113
Measuring loyalty is hard; we aren’t going to pretend
otherwise. But the truth is, measuring loyalty is getting
easier. When it comes to quantifying your loyalty
initiatives, there are more resources available than ever
before.
114
priorities, and their customer loyalty KPIs vary
significantly. However, we have seen some counts and
formulas get used time and time again, and these are
the metrics we’ll explore in this chapter. We hope you
walk away with some insights to help shape and elevate
your customer loyalty measurement. At the very least,
let’s demystify quantifying loyalty because it can – and
should – be measured!
Getting Started
115
also be keeping a control cohort as a benchmark (more
on this very important piece in a bit).
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Here at BigDoor, we know every company is focused on
driving different initiatives, but all companies ultimately
want to drive more loyalty (which often equates to
either more conversions per customer for retailers,
or more pageviews per user for publishers). We tackle
measuring this complex beast by breaking it into five
different categories:
5 Categories of Loyalty
Advocacy Rewards
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In our experience, marketers are traditionally over-
weighting the middle pieces (like conversion and
frequency) and don’t track the other important pieces
(like registration and rewards). Let’s dig into each of
these categories to show you just how important they
are, and most significantly, how investing in these five
categories truly creates your most loyal customers.
Registration
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expectations and seed loyalty. One key way to drive
users to register is by showing off the benefits of joining
your community or loyalty program. Oftentimes, this
includes discounts, perks, and/or rewards.
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messaging a certain angle to get them engaged? These
actions all drive different results, and can help you
iterate to achieve success on your registration numbers
and goals.
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campaigns. You need to know who your customer is
if you want to make them fall in love with you. It’s as
simple as that.
Frequency
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your visitors come back more often, you have more
opportunities to market to them and make a sale. There
will be much higher engagement with your brand, and
more chances for you, as the brand, to win their loyalty.
All of these opportunities are key to staying front-of-
mind and winning brand affinity.
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While we know frequency is a critical piece to note when
measuring a customer’s loyalty, we think that marketers
stop there all too often. At BigDoor, we see frequency
as an important piece, but not the whole picture. Let’s
explore some of the other critical areas we need to be
measure to accurately gauge loyalty.
Conversion
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At BigDoor, we spend a lot of time tracking and
measuring conversions across the lifetime of a user to
help brands understand just how “loyal” their customers
are. Below are just a few of the many conversions we
believe brands should track:
• Purchases
• Page views
• Video views
• Downloads
• Emails submitted
• Comments
• Reviews
• Quests completed
• Partner sites visited
• Branded content read
• Newsletter signups
And so many more. In the end, it’s up to the retailer or
publisher to know which actions are most valuable to
the growth of the business. It’s these conversions you
want to benchmark and then track as key indicators on
whether loyalty is growing or not.
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Ultimately, there are many ways to drive purchase-
based and engagement-based conversion. Before we
move on, we’ll leave with you with a few of our favorites.
Advocacy
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Few things show brand loyalty like advocating on the
behalf of a brand. For example, we see this most readily
exemplified by Apple lovers who tweet, Facebook,
and Instragram tens of thousands of mentions and
pictures about #apple a day. There is a very unique and
hugely advantageous power that comes with increasing
customer advocacy for your brand, evident in any Apple
campaign.
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Tips to increase advocacy:
Rewards
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So what do we mean when we say rewards? We mean
any moment you give back to the customer and thank
them. These moments can be an actual reward like
branded swag, sweepstakes entries, or experiential
rewards, or can be something like a coupon or exclusive
access to an event or piece of content. There are
literally thousands of ways you can “reward” a customer
for their investment in your brand. Check out a few of
our favorite ways brands can reward their customers
for taking loyal actions.
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up a reward? Have your customers redeemed these
rewards? Simply put, is there existing reciprocal loyalty
between you and the brand?
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Cohort Marketing
Breaking your audience into groups based on their
similarities, behaviors, or other attributes, and
tailoring your marketing efforts accordingly.
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Second, when you have the five main categories
tracked, you can begin building “exposed” user cohorts.
This is when things get real interesting. Under each
category, you have identified counts you want to track,
and you can begin to see which users are at the high
and low ends of each category. Take this example under
the “frequency” category:
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Now, stick with us! Let’s pretend you’ve established your
standard cohorts, and the results broken into the five
categories of loyalty look something like this:
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Premium Loyalty Cohort
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ac
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ar
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Cohort 1 NO HIGH HIGH LOW LOW
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Hopefully you can now see how important it is to
not only track the many parts of customer loyalty,
but to use them to build cohorts and personalize the
customer experience accordingly. Blanket marketing
of yesterday no longer works. The bar has been raised
on measurement, and we as marketers need to take
advantage of the data available to us and use it to
market more effectively.
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Conclusion
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CREATING A CULTURE OF LOYALTY
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By now, we’ve made the case for building loyalty, and
hopefully you are ready to begin steering customer
loyalty at your company. However, there is one last
hurdle to jump: selling everyone else on your team on
the concept and importance of loyalty. Don’t get down,
friend! We’re here to help.
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5 Tips for Creating a Culture of
Loyalty
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and to highlight areas where you can improve. It often
takes a simple case made with a few bulleted points to
remind the management just how important customers
are to growing your business.
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Communicate and
Educate Cross-Company
This is where the fun starts. When you have the support
of the management team, the next step is to rally the
troops. We suggest that during a lunch hour, over pizza,
you gather as many interested parties as possible into a
room and talk loyalty.
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of handing passionate people some data, and allowing
their creativity to take charge. You’ll be amazed by
how many ideas your teammates will have on how to
improve the customer experience and foster loyalty.
To keep everyone up-to-date on your loyalty progress,
set up a monthly or quarterly mailer that goes out
to the company to report on the company’s loyalty
campaigns and results. This sort of cross-department
communication can go a long way in both spotlighting
those efforts that have worked, but even more
importantly, keeping the excitement growing for
customer loyalty at your business.
Staff a Team
Dedicated to
Building Loyalty
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responsible for the majority of what this guide has
walked through: championing the cause, collecting
customer data, launching loyalty campaigns, reporting
on performance, and ultimately reducing customer
churn and growing loyalty.
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Experienced marketers
Loyalty champions tend to be marketers who are well-
versed with the ups and downs of the customer lifecycle
and experience. They should be able to identify patterns
and formulate plans to drive customers towards actions
that matter.
Remarkable storytellers
Your loyalty program is an extension of your brand, and
is driven by your brand’s story. The story told through
your loyalty program is a key component of keeping
customers for life or losing them to a competitor, and
your loyalty champion will head this endeavor.
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Social media expertise
The way we talk to customers has changed dramatically
with the rise of social media, and the champion at the
helm of your loyalty marketing efforts should know how
to leverage social channels to drive engagement and
open the lines of brand to customer communication.
Cross-channel experience
Customer loyalty affects many different orgs within
a business, including sales, marketing, product,
customer service, design, and more. Growing loyalty
is everybody’s bottom line, and your loyalty champion
should be a master at working cross-functionally
between teams.
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Show Them the
Numbers
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that loyalty measurement and tracking can be quite
confusing to most people (including many of your
executives, we bet), so don’t be afraid to err on the side
of over communicating.
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improve, and share how much they appreciate all you
do. By breaking down the wall between the employee
and the customer, you are creating a different type of
loyalty – one that is based on real stories.
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Those are our top tips for creating a culture of loyalty.
Next up, enjoy the final chapter in our loyalty adventure:
our checklist of places for you to start. We’ve had a lot
of fun walking through the history of loyalty, introducing
you to new ideas, and talking tactics, data, and more. It’s
time for you to take it into your hands!
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TOP 10 WAYS TO GET STARTED
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You made it to the end – congrats! We walked through
old ways of building loyalty, new approaches, examples,
stats, measurement, and more. We covered ways
to build a case and culture around loyalty, and now
here we are. But what’s next? How do you take this
information and make something meaningful for your
business?
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Assess Your Current
Loyalty Efforts
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Create a Ground Floor
to Build On
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Set clear goals for the upcoming quarter, and then
make sure the entire team understands them. Ensuring
that your team has an understanding of where you are
starting and that you’ve set realistic loyalty goals are
keys to success in this step.
Establish a Loyalty
Champion
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By empowering this person to be externally recognized
as the customer loyalty champion, you show the
company that the company is serious about prioritizing
these efforts.
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Make a Case for Budget
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Examine Your Brand’s
Resources
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Leverage Your
Community
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Create Personas
and Begin Work On
Your Cohorts
Here is where the real work comes in, but trust us, it
will pay off. Revisit Chapter 7 around measurement
and start thinking about how you can break up your
current audience and/or customer base into personas
or cohorts. This preliminary work with not only help you
measure loyalty more effectively, but will also help you
market more effectively.
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Begin Exploring
Options
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Wrapping it up
We’d love to help you take the next step of your brand’s
journey to lasting customer loyalty. For more information
about BigDoor’s customizable Loyalty Program and Loyalty
Campaign products, drop us a line any time at
team@bigdoor.com.
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We want to extend a huge thank you to all of our
contributors, editors, designers, and amazing feedback
givers, including: Keith Smith, Bryan Estes, Jacob
Speidel, and Adam Neddo. Thank you for all of your
time, guidance, and thoughtful recommendations!
Designed by:
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