Customer Loyalty in The Digital Age

In the digital age, traditional competition methods can no longer meet the market and customer demands. With the E-commerce world taking over, customer loyalty is a top priority now.

Brand loyalty is a customer’s commitment to a business’s products and/or services by preferring them at the purchase point. This loyalty is formed around a satisfying experience customer experiences while choosing a commercial brand, increasing customer interest and directing them towards purchasing what they have to offer.

Based on market research, loyal customers are 67% more likely to spend on a brand or use a particular brand’s services than new ones. In comparison, these customers are only 20% of the brand’s total customer base and 80% of the company’s total revenue.

As reported by McKenzie, retaining a customer is five times easier for a business than attracting a new customer, which means companies can focus on old customers and use different methods to guide them towards making yet another purchase during their lifetime as a customer. The world’s big brands resort to creative ideas to create a pleasant and lasting impact on their customers’ minds, from updating their e-commerce websites and applications to discounts or customized products or solutions for individual customers.

loyal customers are 67% more likely to spend on a brand or use a particular brand’s services than new ones. In comparison, these customers are only 20% of the brand’s total customer base and 80% of the company’s total revenue.

One of the most customer-focused companies of all time is Amazon. Amazon started as an online bookstore, but upgrading its processes and offering customized and tailor-made offerings to its clientele grew into the world’s biggest online retailer. Amazon is a market leader, a trendsetter, and not a mere follower.

They created Kindle when people were afraid that books might go extinct. They went global when it became a hit and started supporting multiple languages and payments through local currencies. Now they have Amazon Go, their latest innovation where customers enter a physical store and get out without staying in queues or going to a check-out counter. Amazon calls it “Just Walk Out,” based on the latest technologies such as Computer Vision, Deep Learning Algorithms, and Sensor Fusion. Innovations like this have motivated 82% of American families to subscribe to its Prime application since July 2019.

Another practical example is Starbucks, which allocated $2.6 billion of its revenue to its Reward Program. Rewards such as a free drink on your birthday or free refills for your tea or coffee at its stores motivate the customers to spend more. Using this reward program is easy; customers can pre-order, customize their drinks, transfer their points, or receive bonus points on special promotion days. By the end of 2019, this plan’s subscribers were 16.8 million, a 25% increase from the previous year.Customer Loyalty creates a range of values for different businesses. Customers might become loyal to a product or service that they cannot afford to live without or, because of their pleasant past experiences, want to purchase or experience a company’s latest product or service.

Customer Loyalty creates a range of values for different businesses. Customers might become loyal to a product or service that they cannot afford to live without or, because of their pleasant past experiences, want to purchase or experience a company’s latest product or service. 

Loyal customers play a crucial role in driving brands forward and will act as your brand ambassadors who will come back to buy more and introduce their favourite brand through word of mouth and become your exclusive advertiser. This group of loyal customers will defend your brand against the competition and spend time giving feedback and filling out the questionnaires to help improve their brand of choice.

 

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