You know the stats on the value of customer retention.
Acquiring a new customer costs between 5 and 25 times the amount to retain an existing one.
The likelihood of selling to an existing customer is 60-70%, compared to only 5-20% when selling to a new customer. (See links at the end of the article for links and more information.)
As Advertising Week put it recently, “For small businesses operating with limited time and resources, nurturing existing customers isn’t just more cost-effective – it’s more sustainable.”
One of the most tried-and-true methods for retaining customers is the loyalty program.
Yet most loyalty programs fail.
They fail because “they reward the transaction,” Advertising Week argues,” not the person.”
Quite simply, “Points, discounts and coupons have become so common that customers treat them as currency, not connection.”
Person-Centered Loyalty Programs
According to InsiderOne, successful loyalty programs recognize the customer as person.
That is, they’re built on “behavior, identity and long-term value” for the customer, with benefits “that feel personal, not templated.”
How do these programs work?
They make the customer feel “seen” and understood.
Benefits can be tailored to customer behavior based on their history with your business.
Every interaction generates information, and a successful loyalty program bases rewards on customer preferences, needs and aspirations.
InsiderOne offers several excellent and vivid examples of a program that might work:
— A customer exploring skincare might be offered a trial-size serum.
— A frequent traveler might get dynamic free shipping perks during trip-planning periods.
–A high-intent shopper may receive early access to curated collections.
Maybe you know that some of your customers are early adopters. Invite them to a launch party, in person or virtual. Or include them in beta-testing.
The common denominator here is the shift from the impersonal to the personal and from the transactional to the behavioral.
More than likely, you and your staff know your customers well. When developing a loyalty program, tap that information and customize – that is, personalize – rewards.
Your customers will love the attention and you’ll benefits from better customer retention.
Articles for further reading:
https://advertisingweek.com/small-business-marketing-predictions-for-2026/ https://www.optimove.com/resources/learning-center/customer-acquisition-vs-retention-costs https://www.outboundengine.com/blog/customer-retention-marketing-vs-customer-acquisition-marketing/
https://insiderone.com/best-customer-engagement-strategies/
