Looking for Loyalty? Be Personal and Transparent

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Today’s consumers find temptation—and advertisements—at every turn. A woman might click an ad for ankle boots on her mobile phone, but browse a competitor’s stylish knee-high boots a minute later. Increased purchase options and more opportunities for consumers to pursue them both online and offline have put a dent in consumer loyalty. In fact, 77 percent of consumers admit they now withdraw their loyalty more quickly than they did before, according to Accenture.

This is a shame, as customer loyalty is critical for business success. According to research conducted by Bain & Company, just a 5 percent increase in customer retention rates can lead to a 25 to 95 percent increase in profits.

So how can brands inspire loyalty and lift sales in the process?

Get Up Close and Personal

With almost three-quarters of customers saying they get frustrated when ads aren’t customized to their preferences, it’s clear consumers want personalization. But personalization is also key to brand loyalty? When brands personalize their communications with consumers, they’ll help them feel cared for and understood—and keep them incentivized to continue shopping.

Brands can boost their personalization efforts with help from purchase data. For example, if a consumer buys a new ski jacket from an outdoor apparel company ahead of the winter season, the brand can personalize their next round of ads. They can suggest, for instance, that the consumer buy a matching set of snow pants and gloves.

Purchase data can tell the brand who has purchased from them before, but what about consumers who’ve yet to buy something? With historical location data, the outdoor apparel brand can identity other potential customers: People who have visited a ski resort. And to help ensure the ads lead to greater foot traffic and sales, the brand can serve ads to these individuals when they drive near one of their brick-and-mortar stores.

Be Crystal Clear

Transparency has become a new buzzword across industries—from our workplaces to our personal lives. Equality advocates argue for full salary transparency. Environmentalists call for supply chain transparency. And we want our friends, family and partners to be transparent with us.

But as one journalist pointed out in a recent Fortune article, transparency often “runs counter to traditional business practices.” But brands that go against this habit and embrace transparency across their consumer-facing communications—including advertising—will develop strong and long-lasting relationships with consumers.

Domino’s took this idea of transparency to the extreme when they launched a campaign across the U.S. to solicit consumer feedback—and made it public. They asked tough questions and took the answers to heart—the good, the bad, and the ugly—and completely revamped their product. Since Domino’s “pizza turnaround,” sales have skyrocketed.

Give Incentives

Brands can also build brand loyalty by offering incentives. Let’s say a large CPG brand wants to increase in-store visits. Perhaps the brand’s advertisers see that some consumers have visited their location once or twice, but shop at Target and Walmart fairly often. The CPG brand can use incentives to get these consumers to choose them over the competition with ads offering discounts, special in-store offers and loyalty free-bees.

But brands need to make sure these incentives are tailored to the individual. A credit card company, for example, can offer rewards to high spenders, but they shouldn’t send a Forever 21 voucher to a man in his 50s. But what if that man is often seen connecting to the Wi-Fi at Macy’s? Sending him a discount coupon for a tailor-made suit the next time he’s in the store would work much better.

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