Loyalty Marketing Strategies For Customer Retention

Loyalty Marketing Strategies For Customer Retention | Sales & Marketing | Emeritus

Acquiring new customers can be more expensive than retaining the existing ones. Therefore, marketing professionals use different tactics to retain customers. Loyalty marketing is a specialised tactic that creates a loyal customer base for brands.

In this article, we will closely look at loyalty marketing and how it can be used for customer retention.

In this article, you’ll learn:

  • What is loyalty marketing?
  • What is customer retention, and why is it important?
  • What is customer loyalty?
  • How to measure customer loyalty?
  • How to use loyalty marketing to retain customers?

What is Loyalty Marketing?

Loyalty marketing is a customer retention marketing tactic built around retaining frequent shoppers through incentives like discounts, free samples, and exclusive offers.

Here are some other reasons for adopting loyalty marketing tactics:

  • Maintain customer loyalty and consistent profit margins
  • Interact with frequent buyers and strengthen business relationship
  • Increase the dependability and trustworthiness of the brand

Here’s why loyalty marketing is essential:

  • Enhances the value of the brand
  • Generates essential data about customers’ likes, dislikes, demographics, the kinds of advertisements that work for them, buying patterns, etc.

Here are the benefits of loyalty marketing:

  • Increased number of repurchases
  • Better conversation rates
  • Increased profit margins

Here are some common brand loyalty strategies:

  • Customer loyalty programme rewards customers for returning to the store frequently
  • Customer referral benefits provide customers points or rewards when they refer a company’s products to their friends
  • Post on social media encourages customers to promote a company’s products indirectly

Support a cause and feedback are other common loyalty marketing strategies.

What is customer retention and why is it important?

Customer retention is a business’s ability to keep existing customers and continue generating revenue from them. Companies use different tactics to convert first-time buyers into frequent buyers by providing discounts, offers, referral programmes, etc.

Here are some reasons why customer retention is essential:

  • Drives repeat purchases
  • Cost-effective to retain existing customers than attract new consumers

What Is Customer Loyalty?

Customer loyalty is the bond shared by a brand and its customers. It (customer loyalty) is demonstrated by the customer’s willingness to engage with the brand repeatedly.
Customer loyalty is often used to evaluate the impact of a brand on its audience. Loyal customers show these common characteristics:

  • Repeated purchases
  • Interact with the brand regularly
  • Participate in word-of-mouth advertising without any initiation from the brand

It is essential to know that customer loyalty and retention work together. While loyalty is a mindset that forces customers to engage with a brand continuously, retention is a metric used to monitor customer engagement.

How to Measure Customer Loyalty

Repurchase ratio

It is the percentage of customers repurchasing a company’s products or services in a fixed period. Measuring the repurchase ratio helps managers quantify customer loyalty.

The repurchase ratio is calculated by dividing the number of loyal customers by the number of new users. By using the formula, you can mathematically find out customer loyalty.

Repurchase ratio =
Number of loyal customers
Number of new users


Net promoter score (NPR) is the willingness of the customers to recommend a brand and its product and services to others. It is also used to determine customer satisfaction.

NPS is a ranking system that asks the customers to rank a company’s product from 1 to 10. Then, based on the results, customer loyalty is measured and estimated.


The customer loyalty index, or CLI, is a standardised way of measuring customer loyalty. It uses surveys and questionnaires to collect customer responses to measure adherence.

How To Use Loyalty Marketing To Retain Customers?

Here are some ways loyalty marketing helps in retaining customers:


Personalisation enhances the customer experience by triggering three foundational emotions, trust, commitment, and reciprocity in customers.

Here’s how brands can personalise their products or services:

  • Collect personal profiles of your consumers from different sources and personalise products based on the insights
  • Observe consumer behaviour and buying patterns over time and make adjustments according to that
  • Interact with customers on social media through online polls and surveys to determine their likes, dislikes, and their preferences.

Referral programmes

There are many reasons why brands create referral programmes. It’s cost-effective, builds trust between customers and brands, provides high ROI, and drives customers to repurchase products.

Here are some points to keep in mind while creating a referral programme to boost retention:

  • Make customer experience a priority
  • Humanise your brand by creating an emotional brand message
  • Treat your customers like insiders or part of the family
  • Say ‘thank you and ‘sorry’


Customers begin their loyalty to brands that provide positive customer experience and consistent excitement by providing irresistible offers, discount coupons, and deals. Therefore, a small reward or discount for buying your products can motivate customers to repurchase your products.

Ask and improvise

Social media has made it easier for brands and customers to interact with each other. Today, companies can directly collect feedback from their target audience, listen to grievances, and instantly offer help to customers with issues and problems. This (social media interactions) has also accelerated customer loyalty and led to higher retention.

Besides loyalty marketing, there are many marketing strategies like SEO, CTA, email marketing, and affiliate marketing helping brands retain their customers. To learn more about these customer retention strategies and different ways to interact with customers, you can take Emeritus India’s marketing courses offered in partnership with reputed institutes.

About the Author

Content Writer, Emeritus Blog
Nikhil is a passionate and free-spirited writer with 4+ years of experience. He has a keen eye for the ever-evolving content landscape, which helps him craft captivating content across various genres. He writes about marketing, data science, and finance for the Emeritus Blog. Beyond work, Nikhil is a dedicated pet parent who loves leisurely walks with his beloved puppers.
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