Customer Loyalty in Retail: It’s All About Getting to Know Your Audience

By Kim Surko

What happens once you acquire a new customer? Customer acquisition is certainly important, but in the world of retail it’s only the tip of the iceberg.

A solid customer acquisition strategy will only get you so far on its own — you also need to be able to retain those new customers by keeping them engaged, driving repeat purchases and growing their value over time.

Achieving these goals requires planning and work, especially for online retailers who can’t make a face-to-face connection with customers. To best build these relationships, retailers need to pay close attention to how they engage with customers at different lifecycle stages and form a marketing strategy that responds to their unique motivations.

Why is it Important to Build Customer Loyalty?

You can’t ignore the need to bring in new customers, but let’s face it: Customer acquisition is hard. And expensive. Data reveals that acquiring new customers can range anywhere from five to 25 times more expensive than retaining existing ones.

And the other side of that coin makes just as compelling an argument for prioritizing customer retention and loyalty. That’s because not only is retaining customers less expensive than acquiring new ones, but increasing loyalty among existing customers is also far more profitable than getting new customers to make their first purchase. Consider the following stats:

4 Ways for Retailers to Increase Customer Loyalty

The case for emphasizing customer retention and loyalty is airtight, but how exactly can you make it happen? At the end of the day, it all centers on the tactics you use to curate the customer experience. Here’s how you can get started:

1. Understand the Customer Lifecycle 

It’s all about getting customer lifecycle marketing right so that you can speak appropriately to customers based on their lifecycle stage and level of loyalty. This is the secret sauce to making customers feel special. However, it will require you to have control over three types of data, namely:

Once you have the technology necessary to easily collect and analyze this data, use it to determine which of your customers are active, which are at-risk and which are lost. This will give you valuable information regarding the health of your audience.

Once you have a pulse on audience health, you can take your insight even further to identify members of your audience with the highest predicted customer lifetime value and understand the products that interest them most.

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Finally, you can put all of those pieces together to launch targeted campaigns based on each customer’s lifecycle stage, lifetime value and interests. This is a crucial step to improving customer loyalty and will enable you to engage in more advanced retention strategies.

2. Use Personalized Product Recommendations

One way to encourage loyalty is to share personalized product recommendations as part of your customer engagement strategy. You might deliver a recurring email campaign to customers who have browsed and/or purchased products, personalize their site experience and/or target them on Facebook. Whatever mix you choose, the key is to create a consistent cross-channel experience throughout the messaging and content you share.

To ensure consistency and deliver a curated experience, you need to pay close attention to how you segment audiences and what their purchase habits are. From a segmentation standpoint, consider separating recent browsers from recent purchasers since you’ll likely want to follow a different recommendation strategy for each group.

For example, when targeting recent browsers, you might share the specific products they viewed and highlight similar products in the same category. Meanwhile, when targeting recent purchasers, you might show co-purchase recommendations and run triggered emails based on when they’re due for product replenishment.


3. Offer Customers Exclusive Opportunities

Using predictive models to segment customers based on lifetime value can prove extremely helpful for many efforts, for instance by bringing intelligence to ad buying. But once you build an audience of high value customers, how should you speak to this audience?

Ideally, you want to communicate differently with your high value customers by providing them with ultra-personalized messages and exclusive content. To do that, you might offer high value and loyal customers an opportunity to pre-order new products before anyone else or other perks like expedited shipping.


Getting this information should be relatively straightforward. Retailers have access to large troves of customer, behavior and product data as a byproduct of conducting business. You don’t even need a rewards program – simply analyzing your customer’s online activity will provide plenty of insight. A retail marketing solution would be able to automatically collect this data and start matching certain products to a customer’s attributes or behavior.

4. Directly Target At-Risk Customers

Identifying at-risk customers as soon as possible gives you a better chance of winning those customers back. Of course, identifying those customers is only one part of the bigger picture — you also need to act on that knowledge. One way to do so is to create a targeted engagement series that continues to address at-risk customers until they become classified as active buyers again.


For instance, let’s say you send a targeted email to customers who have deviated from their individual buying cycle. Within the email, you should feature personalized product recommendations based on the last purchase they made by including similar products, best sellers, new arrivals or top rated products in the same category. You can also send unique promotional codes if you want to offer a discount.

Looking beyond email, you can also try targeting your at-risk customers on channels like search and social media. In the case of search engine marketing, you might want to add bids to search terms you wouldn’t normally bid on – but only for those customers (e.g. “heels” might be too generic for you normally, but you might bid when valuable customers in your at-risk audience search for “heels”).

Conclusion: Knowing Your Audience is Crucial to Customer Loyalty

Once you have a pulse on your audience, including where their interests lie, how valuable they are to your brand and where they are in their customer lifecycle, you’ll be able to encourage them to purchase again and again.

But it all starts with knowing your customers. So how well do you know your customers? Do you have easy access to insights that help you have targeted, meaningful conversations? And finally, do you have the tools you need to put your retention strategy into action? 

If you’re ready to learn the secrets behind enabling repeat purchases, take a look at our newest eBook, “The Ecommerce Retention Opportunity.”

Kim Surko

Kim is the Vice President of Customer Success for Bluecore. Kim leads Bluecore’s Customer Success Managers, Forward Deployed Engineers and Professional Services to ensure customers’ desired outcomes are achieved. Previously, she was Director of Customer Success and Account Management at Oracle Marketing Cloud – Responsys. Prior to Oracle, Kim was Senior Director of Account Management at digital marketing agencies, providing full-service solutions for martech and adtech partnerships. Kim’s passion for solving customer’s business challenges with marketing solutions has driven her career in customer success.