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What is Loyalty Marketing?

Definition of Loyalty Marketing Infographic

Definition of Loyalty Marketing

Loyalty marketing is the discipline of identifying and nurturing the yield of best customers through a long-term, reciprocity, value-added relationships.

Many people associate the quality of loyalty with their families, close friends, even their dogs. Loyalty plays a part in most of our daily activities. The brand of toothpaste most of us use each morning probably is one we have used for years, as maybe our coffee, soap and cleaning solutions. We generally order from the same pizza delivery service, visit a dry cleaner whose face we know and whose reputation we trust.

As a result, when you looked up the word ‘loyalty’ in the dictionary, it’s not surprising that the definition of loyalty is faithfulness; advocacy, devotion; constancy.

Now, when you ask marketers how do you translate loyalty into business terms, there is a lot of confusion. Are you talking about a rewards credit card, or is it a grocery discount card? Or are you talking about a points loyalty program? Frequent shopper program? Or is it an email club? Punch cards? I don’t want you to get bogged down by these tactical descriptions of marketing programs. Instead, I want to give you a definition of loyalty marketing that provides you and your organization a strategic focus.

After helping over thirty Fortune 500 companies understand the drivers of loyalty and defection from the customers’ point of view, I define loyalty marketing as: “Discipline of identifying and nurturing the yield of best customers through a long-term, reciprocity, value-added relationship.” This definition speaks to your CFO as well as your customer experience manager.

Six Elements of Successful Loyalty Marketing

Now that we have some common definitions, it’s time to concentrate on the hard stuff: nurturing customer loyalty. There are six key elements of successful loyalty marketing:

1. Insight — Create a competitive advantage
2. Precision — Treat different customers differently
3. Relevancy— Personalize your communications
4. Reciprocity — Deliver value in every interaction
5. Social — Engage customers through social media
6. Yield — Grow profitable customer relationships

A lot of companies are testing different loyalty program strategies,  the more promising and successful ones seem to share some common characteristics. Learn the seven lessons from the innovators in the Making Loyalty Pay: 7 Proven Strategies presentation.

Who is Customer Insight Group?

Customer Insight Group is a Colorado-based loyalty marketing agency leading the way in helping companies engage, keep and grow profitable customer relationships.

Loyalty Marketing Resources