Creating Customer Loyalty

A popular saying in the marketing world is that it costs 10 times as much to acquire a new customer than it does to keep an existing one. Despite that, it seems the majority of marketing campaigns are centered on reaching prospects and converting them into paying customers, rather than maintaining relationships with existing brand fans. This is especially the case in the world of retail, where many brands offer one time promotions to first time customers, rather than the ones who make shopping with them a regular occurrence. According to a recent report from The Nielsen Company, if retailers want to succeed with their marketing initiatives this year, they’ll need to reverse these habits and begin focusing on loyal customers.

The most effective way to continually engage regular shoppers is through a customer loyalty program. A successful program will keep existing customers coming back, rather than going to competitors, because they have more incentive to shop with the retailer that is offering discounts. For many retailers, the best way to do this is through customer loyalty cards. “It is critical to deliver the right promotions to the right shoppers to keep them coming back,” asserts Nielsen. “Expect to see more retailers leveraging the shopper insights from this data, to create up selling opportunities, shopping lists and home inventory management tools, which provide shoppers reasons to keep shopping, without pushing the item-sale button as often.”

According to Nielsen, technology will play a greater role in enhancing the shopping experience in 2011. Nielsen suspects that consumers will be able to use mobile technologies to assist them as they browse retail shelves, while retailers will incorporate other technologies to expedite the shopping process. “Big and small retailers are using technology to enable more efficient shopping,” comments Nielsen. “They are also modifying formats to make the shopping experience more enjoyable, to increase trips, and build baskets.” With the economy on the mend, consumers are beginning to loosen their purse strings and spend more money. Retailers that want to capitalize on this will need to revise their existing strategies and make them more customer oriented. This story was adapted from a longer report on the Deluxe Small Biz Blog. To view the complete report, visit