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20 Feb

Brand Loyalty & Retention Rate Relationship

Brand loyalty increases customer retention rate.

Customer retention rate is an important factor to determine business growth and strength. Brand loyalty and customer retention have an established relationship. The more the brand loyalty, higher the retention rate. Especially in digital marketing firms and internet marketing companies.

Customers don’t always purchase products from websites. These statistics support the statement above –

  1. 92% of consumers who visit a site for the first time, do not make a purchase even if they intend on.
  2. 32% of consumers do not end up making a purchase online.
  3. 98% of consumers do not make a purchase online because of problems with the content.
  4. Only 7% of shoppers believe in brands online, whereas 35% do not believe in brands and believe that online brands are doing a poor job.

What customers want is personalized content that they can relate to. One out of ten shoppers ranked it as their number one priority. Customers want to feel important and prioritized. 21% of shoppers are likely to make a purchase when the brand engages in personalization, as it improves the customer’s digital experience.

When a customer looks to make a  purchase, there are a variety of things he looks for. Online marketing agencies in India need to understand those needs, and do the needful. Poor content drives customers away. 98% of shoppers have not made a purchase due to this. Providing rich content will optimize the experience of the shopper ensuring that they stick around.

A customer is not likely to stick around if he is shown an ad for a product that’s irrelevant to him or one that he would never purchase. This generalization drives customers away because the content is impersonal. 47% of shoppers have seen ads that are not relevant to them.

An item that would benefit from personalization are coupons based on location. 44% of shoppers confirmed this. Personalised communication is the way to go in order to increase sales.

Using of purchase history and demographics would help gain insight into the customer’s interests, which would improve the level of personalization.

If a brand provides good content and is able to engage the customer who has visited the website, it is likely that they will make a purchase and will continue to do so because of their experience driven engagement.

Customer loyalty programs such as points and reward system for purchasing and referral are also beneficial to keep shoppers engaged in the website. It is also a possible path for marketing of the brand.

Premium loyalty programs such as Amazon Prime, Zomato Gold etc. which have a fee are gaining popularity in the market. 47% of shoppers said that rewards in fee-based programs are better than those of free ones. Since they have paid for the service they are likely to stick on.

Customer Retention Strategies

Another factor which ensures that the customers stick, is the factor of social responsibility. Brands that help make a change rather than just making a profit, draw customers. Customers, in fact, wouldn’t mind paying more for a product if it was for a cause such as donation, charity etc. When customers spend their money they’d like to feel like it’s going to a good cause and not just into the profit bank of the company. Brands that have such social responsibility programs are likely to create emotional connections and goodwill with customers. Speaking of emotional connections- emotional loyalty is very important. It influences the likelihood of a customer sticking with a brand. Research by Gallup has shown that customers that are emotionally connected with a brand will visit stores of brands 32%  more and will spend 46% more than those who are not emotionally connected with the brand. To sum up, loyalty programs, personalization, rich content, and desire to be engaged in social work will act as reinforcers and incentives to keep coming back to a website.

This sums up the various customer retention strategies, which will help achieve a base of customers who provide assured sales.

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