Customer loyalty as a performance driver

Several studies confirm this: acquiring a new customer costs five times more than retaining an existing one (Invesp). The impact is even greater when considering that a loyal customer spends on average 2.5 times more than a new one (Siècle Digital).

Yet, customer loyalty remains a major challenge for many businesses. How exactly do we define it, and how can companies build long-term relationships with their customers?

🔍 What is customer loyalty, and why is it essential? Discover its challenges, strategies, and key metrics to transform customers into brand advocates and boost business profitability. 🚀

A core concept in marketing and customer relationship management, loyalty aims to turn occasional buyers into repeat and committed customers.

These two terms may seem interchangeable, but there are key distinctions.

Loyalty isn't just about retaining a customer, it's about creating an emotional bond through the experience offered by the brand.

💡 Example: An e-commerce website optimises its loyalty programme by rewarding repeat purchases and personalising recommendations.

Result: Its repeat purchase rate increases, and its customer acquisition cost (CAC) decreases, improving overall profitability.

👇 Find out more.

In marketing, we love acronyms. Have you heard of the 3Rs and 4Cs? These two complementary models can help enhance customer loyalty.

This framework was introduced by Paulo Claussen, an American marketing professional, to help companies build customer loyalty using a structured approach.

Reward involves offering tangible benefits to loyal customers. Relevance is based on an offer and communication tailored to the specific preferences of each customer. Recognition enhances customer commitment. 

Developed in the 1990s by Robert Lauterborn, this customer-centric model revisits the traditional 4Ps of marketing.

This means understanding our customers, offering them a smooth purchasing process, a tailored experience and maintaining a constant dialogue.

These principles serve as a benchmark for activating loyalty levers:

1️⃣ Personalising the customer experience

Offer tailored recommendations, exclusive deals, and personalised journeys based on customer preferences and behaviours.

2️⃣ Loyalty programmes and exclusive benefits

Encourage repeat purchases with points, discounts, premium content, or VIP statuses. Loyalty programmes are a proven method for building long-term relationships.

3️⃣ Customer service quality and responsiveness

A reliable, multi-channel support system (phone, email, live chat) boosts customer satisfaction and trust. A service that is available, fast and efficient reduces churn.

4️⃣ Engagement and regular interaction

Emailing, social networks, events: every point of contact is an opportunity to maintain an active relationship with customers.

5️⃣ Offers and rewards based on customer behaviour

Provide targeted promotions, benefits based on purchase history or gifts for the most loyal customers.

💡 Example: Starbucks and its loyalty programme

Starbucks offers more than just a loyalty card. It has built a fully omnichannel and personalised experience:

It's a well-oiled strategy that combines rewards and a close relationship. Some even go so far as to deliberately make a mistake on the first name to encourage you to share the photo of your cup on social networks. And create even more engagement with the community.

Building customer loyalty is based on effective management of customer interactions and personalised experiences. A number of tools can be used to optimise these strategies:

👉 CRM & marketing automation

CRMs (Customer Relationship Management) help to optimise customer interactions. They enable marketing and sales actions to be tailored to customer behaviour and preferences.

Tools such as HubSpot, Klaviyo and ActiveCampaign can be used to automate the sending of targeted messages: post-purchase reminders, exclusive offers, newsletters, etc. Good timing and precise segmentation improve engagement.

👉 Loyalty programme management platforms

Solutions such as Smile.io or LoyaltyLion make it easy to set up reward systems based on points, cashback or VIP status. They strengthen brand loyalty.

👉 CDP: personalising offers and optimising engagement

A Customer Data Platform (CDP) unifies customer data from various channels. It goes further than a CRM by offering a 360° view of the customer. The CDP makes it possible to create precise audiences and send personalised offers, based on buying habits or engagement.

DinMo's composable CDP enables first-party data to be used to adapt offers in real time. For example, an e-commerce business can identify VIP customers and offer them an exclusive discount on their ‘next best offer’. They will receive a personalised offer on the product they are most likely to order at a given moment.

Data is at the heart of marketing processes, and loyalty is no exception. Here are the main metrics to track.

Other KPIs can be monitored, such as the Customer Effort Score (CES) or the re-purchase rate.

Building customer loyalty is much more than a means of limiting churn: it's a strategic lever for ensuring a company's long-term growth and stability. A seamless experience, an effective loyalty programme and a personalised relationship help to strengthen long-term commitment.

Major brands such as Amazon, Sephora and Apple have understood this. They are banking on customer knowledge, personalisation and the continuity of the online / offline experience.

Composable CDPs help to analyse behaviour, segment audiences and trigger tailor-made actions as part of a data-driven approach. 

Want to optimise your customer loyalty? Find out how a CDP can transform your marketing strategy. 🚀

Not every business needs a customer loyalty programme, but it can be highly beneficial for brands with repeat purchase potential. Industries like retail, hospitality, and subscription services often see significant benefits. 

However, poorly designed programmes can lead to disengagement rather than retention. A business should first analyse consumer behaviour and preferences before investing in a structured scheme. Alternative strategies, such as personalised experiences, superior customer service, and exclusive offers, can also increase loyalty. 

Moreover, companies must continuously optimise their approach using customer data and analytics to ensure the programme adds value. A loyalty strategy should align with business goals, customer expectations, and industry trends for sustainable success.

Industries with strong customer relationships tend to excel in loyalty strategies. Retail brands leverage reward points and exclusive discounts, with companies like Amazon and Sephora setting the benchmark. 

Hospitality thrives on personalised experiences, with hotel chains offering tiered memberships and perks. Financial services focus on premium benefits and tailored recommendations, using data-driven insights to retain clients. Subscription-based businesses, including streaming platforms, ensure retention through personalised content and incentives. 

Meanwhile, automotive and luxury brands emphasise exclusivity and brand advocacy. Regardless of the industry, businesses must analyse customer expectations and leverage technology, such as customer data platforms (CDPs), to drive engagement and long-term loyalty.

Social media is a powerful tool for strengthening customer loyalty by fostering engagement, trust, and brand advocacy. Platforms like Instagram, LinkedIn, and Twitter allow businesses to interact directly with customers, providing personalised responses and exclusive content.

User-generated content, such as reviews and testimonials, enhances credibility, while influencer collaborations increase brand reach. Businesses can also use social media to offer exclusive promotions, run community-driven campaigns, and share valuable insights, reinforcing customer trust. 

Additionally, data-driven strategies, such as AI-powered recommendations and sentiment analysis, help brands tailor their messaging. Companies integrating social media into their loyalty strategies benefit from increased customer retention, stronger brand connections, and an enhanced customer experience.