Does Customer Loyalty Equal Retention?

One thing we’ve been seeing a lot of across the internet recently is businesspeople questioning the importance of loyalty programs as an effective retention technique. But loyalty programs are so much more than that! This loyalty vs retention business conundrum led us to writing this blogpost, in which we list 5 key reasons why loyalty programs bring in so much more than just repeat purchases


First of all, let’s set one thing straight: loyalty ≠ retention

Whilst loyalty programs are a common technique used to make customers stick around and make repeat purchases, this just scratches the surface. Having a loyal customer implies that there is a lasting relationship between the business and the customer. This indicates a certain level of fondness and preference for the brand over its competitors. Therefore, loyalty programs not only increase sales and revenue but they are also an important marketing and branding activity with long-term positive consequences. 

On the other hand, retention merely describes whether a customer buys repeatedly from your brand. Retention can come in many forms and for many reasons. Most often however, retention strategies target the most volatile customers who are least likely to stick. This is a problem as aiming to merely retain a customer can often feel as trying to save a sinking boat by pumping the water back into the sea.


Data, data, data

Any business in 2020 should know why data is crucially important. Nevertheless, here’s some statistics to make it crystal clear. Microstrategy’s 2018 report found that 60% of companies worldwide are driving greater process and cost efficiencies using data. 57% of businesses then use it for strategy and change. Any data collection source is highly valuable, so make sure to use it.. So, having a formal loyalty program in place can significantly contribute to not only increased profits but also to improved strategies, market orientation and much more.


Loyalty programs increase customer engagement

Good loyalty programs understand the value of their top customers and they work on rewarding them appropriately. They do this through engaging them regularly, creating conversations and making incentives as personalised as possible. Loyalty and rewards programs combine CRM, relationship and direct marketing to segment existing customers and deliver on key business goals with small targeted activations. Due to the positive associations with incentives and rewards, customers are more likely to engage with the brand. This ultimately helps to make other marketing activities more profitable as an engaged audience is the foundation of a good ROI.


Build your brand with loyalty schemes

Having a loyalty scheme helps your brand building. How? Think about what your rewards structure tells customers about your brand. For instance, a purchasable loyalty scheme, such as Amazon Prime, sends a clear message that all members are treated equally. On the other hand, a tiered loyalty program with exponentially increasing rewards does exactly the opposite. Thus, the design of your program contributes to the perception of your brand. Similarly, since loyalty programs involve marketing communications (i.e. via email, push notifications or app), brand messages are automatically conveyed through language, visuals and messaging. 


Find out what the best loyalty programs have in common here.


Towards an omnichannel experience

If done well, a loyalty program helps to build an overall presence of a brand. Unfortunately, 75% of loyalty programs fail because there is discrepancy between the online and offline experiences.

Here at White Label Loyalty, we know how important omnichannel experience is. What’s more, however, we understand that a clear strategy is necessary to make your loyalty program work. We believe that having a flexible loyalty platform, which works with your existing systems and can connect all data points across online and offline, is key to success. The future of loyalty is mobile and so should your loyalty program be.

Want to know more about why loyalty is broken?

Download our white paper

So which one will it be? Loyalty vs retention? We hope the choice is clear now. If you want to discuss the potential of introducing a loyalty program in your business, please get in touch with our loyalty expert team.

Want to know more about loyalty programs? Read our complete guide! Loyalty Programs 101: All You Need To Know

Get a Free Guide

Recommended Posts

If you enjoyed this article, check out these relevant posts below.

Share this Article

Kristyna Efferoth

Kristyna Efferoth

Marketing Manager

Kristyna is our Marketing Manager. She helps White Label Loyalty reach the right businesses in need of a loyalty program and helps our clients' programs reach their full potential. She loves sharing her varied experience in marketing and loyalty by writing helpful resources on the blog from time to time for all loyalty novices and aficionados alike.

Post Tags

Customer Loyalty
Customer Retention
Customer Engagement