5 Types of Loyal Customers And How to Engage Them

A brand’s success depends on its base of loyal customers. Developing long-term relationships with your customers is crucial if you want your brand to stand out in a sea of competitors.

It costs more to acquire a new customer than it does to retain a current one, which is why it’s so important to focus on customer advocacy and keep your existing customers happy.

5 Types of Loyal Customers

There are different types of loyal customers, and each brings their own unique value to your business. It’s important to identify which customers fall into which category so you can appeal to them properly and optimize the customer experience for each one.

You can try out different customer loyalty programs depending on the type of loyal customer you’re dealing with. And the right loyalty program software will make it a breeze to set up and scale.

The five types of loyal customers are:

1. Happy Customers
2. Loyal to Price Customers
3. Loyal to Freebies Customers
4. Loyal to Convenience Customers
5. Truly Loyal Customers

Happy Customers

Many customers turn to you for your products or services because so far, you haven’t given them a reason not to. They’re satisfied with your company and like shopping with you, even without any extra customer incentives.

It’s always good to have a solid base of happy and satisfied customers. Even though they’ll come and go — their loyalty isn’t to your brand — they’ll generate a significant amount of revenue during their time and happily refer you to friends and family. Plus, you don’t have to throw discounts or freebies at them to convince them to stay.

Customer service is at the heart of a successful business, especially now when consumer distrust is at an all-time low — less than 50% of brands are viewed as trustworthy. Making an effort to keep your customers happy with an exceptional customer experience impacts all levels of your business, and it’s certainly a component worth the investment. 

How to engage them: These customers have no issues buying from you, and you can use unique earning events to reward them for making a purchase or referring a friend. This will keep them happy, and hopefully get them to stay a bit longer before a competitor steals them away. 

Not sure if your customers are happy? Give the customer happiness index a try to find out.

Loyal to Price Customers

There’s a good chance that most of your loyal customer base is made up of customers who are loyal to your prices. Global customers value price as the most important factor (67%) keeping them loyal to brands.  

Image from Zendesk Customer Experience Trends Report 2020

These customers are loyal to low prices, and you probably offer the best bargains among your competition. As soon as a competitor has a better deal, you’ll lose these customers unless your prices drop as well. They’re not as concerned with customer service or the quality of the product/service, as long as the final cost is cheap.

There’s nothing wrong with having customers who want to save money, but it’s a good idea to spot them early and understand how their spending limitations affect your loyalty marketing strategy. Look at which customers are only shopping from your sales section, and make a note to not approach them with anything other than a sale or saving.

How to engage them: You can even use their love for a good deal to your advantage. Try out earning events that reward them with some sort of savings for completing an action. If you need more mobile app downloads, offer them discount codes after they complete their first mobile app purchase. 

Loyal to Freebies Customers

Everyone likes free stuff — some more than others. You likely have a good amount of customers who don’t spend consistently and are only loyal to your freebies, whether that be free merchandise, free samples, or free perks such as wifi.

You can’t count on these customers to contribute to your revenue stream in any sort of predictable way, as they usually only come around when there’s a free item up for grabs. However, they’re more likely to take part in a loyalty program that’ll lead to free products/services.

Image from Finances Online

It’s important to retain customers — increasing customer retention by just 5% can more than double the boost in revenue — which means it’s vital to reward customers if you want them to remain loyal.  

How to engage them: Use this knowledge to influence them to return to your brand continuously if each purchase or friend referral leads to a reward. Consider giving them a free item on their birthday, engaging them in a buy-one get-one free deal, or offering to enroll them in a point-based customer loyalty program that allows them to redeem points for free rewards. 

These customers may not have brand loyalty, but you can encourage them to keep choosing you over competitors if you reward your customers in a meaningful way. 

Loyal to Convenience Customers

Some consumers value convenience above all else. They might appreciate your business for its handy location or reliable products, and they won’t mind paying extra for it. Placing an emphasis on the customer journey and customer experience will help you continue building a loyal base with these consumers.

Image from SaveMyCent

Convenience is so important nowadays, 43% of consumers are willing to pay extra for greater convenience. This is a large pool of people you can entice to become valuable customers, simply by stepping up your digital technology to provide a more convenient experience. Save consumers time and effort by being proactive and anticipating their needs.

The good thing about these types of loyal customers is that they can be turned into truly loyal customers if you know how to engage with them. They’re already more loyal to you than customers who are only around for a bargain or freebie. Keep these customers engaged by asking for feedback or making the experience more personal, and they just may become brand loyal.

How to engage them: You can engage these customers in unique earning events such as asking them to engage in a survey or write a product review. This sort of gesture will make them feel appreciated and heard — they’ll continue to value your convenience while you receive helpful feedback.

Truly Loyal Customers

Your most valuable customers are those that are truly loyal to your brand. These types of loyal customers are your biggest cheerleaders. They’re highly unlikely to ever leave you for a competitor, and they showcase their loyalty by leaving positive reviews, referring friends and family, and making frequent purchases.

Truly loyal customers are your very own “mini marketers,” and since 64% of marketers agree that word-of-mouth marketing is the most effective form of marketing, you shouldn't undervalue these customers. They’re likely already a part of your customer loyalty program and are responsible for helping you acquire customers. 

Brand loyalty is crucial. Reward truly loyal customers by giving them exclusive access to new products, offering them a spot in your VIP loyalty programs, and personally communicating with them via email or personal notes in their packages. Make these customers feel appreciated and they’ll remain repeat customers.

Existing customers spend 67% more on average than new customers, so a loyal customer is significantly contributing to your revenue. You can expect higher profits the more customers you can turn loyal.

How to engage them: You can try out almost any unique earning event with a truly loyal customer. Figure out your brand’s goals and then appeal to your most loyal customers. If you need more social media engagement, offer them tangible rewards if they give you a follow on your chosen platform. Make sure they’re part of a rewards program that gives them a reward for referring Friends. 

How To Build Customer Loyalty With Friendbuy

Friendbuy has already been working for over a decade on how to improve customer acquisition through referrals. Now, we’re taking things a step further with loyalty programs. 

Friendbuy loyalty programs integrate seamlessly with leading ecommerce technologies, allowing you to start your very own customer loyalty program with ease. Set up custom events that cater to your brand’s goals while simultaneously rewarding loyal customers.

“Friendbuy is great for adding another acquisition channel and also rewarding your most loyal customers. Since IOS updates have made acquisition harder on paid social, friend buy has helped us generate new customers and also help us retain our most loyal customers as well.” - Neil P. | Head of Ecommerce

Redeeming points is easy — you can also opt for a non-points based loyalty program — and customers can track their rewards with personalized member dashboards created by you. Make data-driven loyalty decisions that build strong customer relationships and increase retention. 

Why Does Customer Loyalty Matter?

Customer loyalty impacts nearly every aspect of your business. Without loyal customers that make repeat purchases, you’re doomed to spend all your marketing dollars on customer acquisition. 

If you haven’t already, consider starting a customer loyalty program that makes sense for your desired goals. Not only does customer loyalty give you a base of consumers that you can rely on to be repeat customers, it also provides the following:

• More word-of-mouth referrals
• Increased share-of-wallet
• Higher profits
• Higher customer lifetime values

Measure customer loyalty so you have a good understanding of how your customer retention is performing, and whether you need to build loyalty better. You can measure this metric by looking at stats such as your Net Promoter Score, churn rate, or engagement levels.

Learn more: New to Loyalty Marketing? Start Here

What Are The Different Ways Of Rewarding Loyal Customers?

If you want to incentivize your customers to keep coming back, make sure you’re providing A+ customer service, sharing positive customer experiences, and — most importantly — rewarding certain actions.

If you’re not sure what the best way to reward a loyal customer is, here are some ideas to incorporate into your rewards programs:

• Points-based loyalty program. Let your customers accumulate points every time they spend money. These points can be redeemed for custom rewards, where every point is equal to $1.

• Tiered loyalty program. Your rewards don’t have to stay linear. Offer Advocates the chance to expand over time and unlock additional opportunities with tiered rewards.

• Paid loyalty program. If you’re really looking to boost customer loyalty, you can always offer Advocates cold, hard cash. They’re more likely to make purchases and refer friends when there is a tangible reward.

• Value-based loyalty program. Show your customers that you have the same values as them. You can give customers the chance to donate their points to a cause you both care about.

• Customer loyalty card. You know those “buy 10, get 1 free” cards you have tucked into your wallet? Do exactly that, digitally, and incentivize your customers to keep coming back to you over a competitor.

• Loyalty program discounts. Discount codes keep the reward in-house so that the customers buy from you rather than going elsewhere. Offer rewards in the format of store credit or discount codes.

• Gamified loyalty program. Keep your customers interested by turning your rewards programs into a game. Create competition and get creative while offering rewards along the way.

Closing Thoughts

Don’t let your loyal customers slip away. The investment you put into a loyalty program is well-worth the return, as loyal customers are responsible for the growth and overall success of your brand.

Contact us today to improve your word-of-mouth referrals and accelerate your sales.

Ready to get more out of every customer with Loyalty?