Why Keeping Existing Customers Is Better Than Hooking New Ones

Why Keeping Existing Customers Is Better Than Hooking New Ones

In this opinion piece, Christian Hyland, senior manager, strategic consulting, Oracle Marketing Cloud, APAC, argues a loyal customer is (often) a big spending customer. Thus the secret? Be nice…

Loyal customers are the most valuable assets any business can acquire. As well as returning regularly to purchase products or services, they often become brand ambassadors who promote your offerings and recruit new customers on your behalf.


Loyalty is particularly important when you consider the cost of customer acquisition. It is much better to retain happy customers than to have to convert new ones through costly marketing campaigns.

For many businesses, loyalty programs have become a key method for retaining and rewarding their customer base. By offering something in recognition of regular spending, they strengthen the relationship and increase the likelihood of return visits. Well-run loyalty campaigns can also result in customers choosing one business over similar competitors in the same area.

However, an important question arises: how much should a company spend to encourage loyalty? Do you run the risk of giving away more than is required? What about the overall impact on revenues?

Focus on the benefits

It is possible to have an effective loyalty program without breaking the business bank. It’s a matter of matching rewards to the nature of the business you are operating. For example, while hotels and airlines can offer upgrades, retailers offer discounts and the promise of future rewards through points.

Successful retailers constantly remind their customers about the loyalty benefits by printing savings on till receipts and regularly sending out summaries of points earned. While earnings for customers might be small, they can see them building over time. This, in turn, is likely to influence their behaviour and result in them remaining loyal to the store.

The program, therefore, need not be expensive for the business – as long as the focus remains on the benefits it delivers to customers.

Let customers track progress

In the past, many loyalty programs relied on little more than printed cards stamped each time a customer made a purchase. This simple process allowed customers to monitor progress and see how close they were to achieving their next ‘award’.

With many programs now relying on the swipe of a card, such progress tracking can be a little more difficult. For this reason, many businesses are opting to use a smart phone app which tracks customer purchases and shows them instantly the progress being made. Such apps can even allow customers to ‘convert’ points earned into product while in a store.

Easy tracking will aid loyalty by ensuring customers are fully engaged with the program. The result can be increased visits and increased revenues.

Make it exclusive

It’s important to note that the promise of discounts, points or upgrades are not the only reasons customers become engaged with loyalty programs. Often, it’s the feeling they get of being part of a select group.

Airlines reward customers with increasing tiers of loyalty membership, allowing perks such as faster check-ins and access to lounges. Meanwhile some retailers offer invitations to exclusive deals or early-bird access to sales and other events. By ensuring customers feel special in these ways, brand loyalty can be strengthened and existing relationships retained.

While loyalty programs clearly have significant potential value, it is important for businesses to assess the cost of the rewards being offered. Often, even relatively modest rewards can be seen as being of value to customers. When operated effectively, loyalty schemes can become an important component of your ongoing marketing campaign.


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