This year's eTail™ conference recently wrapped up in Palm Springs, so it's caused me to reflect on my speaking engagement at eTail’s “Connect East” event last May. I was part of a panel discussion titled “Retaining Customers and Moving Them Up the Loyalty Ladder.” This topic is increasingly relevant, as I’ve noticed a growing emphasis on moving beyond customer retention to cultivating true brand loyalty - a priority for driving profitable growth in 2025 and beyond.
As marketers (especially DTC marketers) are asked to do more with fewer resources, it’s no longer enough to simply retain your best customers. We must develop them into dedicated brand advocates. To help with this, it’s important to ask yourself three key questions in your efforts to move customers past mere retention and up the loyalty ladder.
1. What’s the difference between retention and loyalty?
From a marketing perspective, is there really a difference between the two? Aren’t retention tactics sufficient? I believe there’s a critical distinction: retention is transactional, while loyalty is emotional.
Emotions always outweigh transactions. Retention focuses on driving repeat purchases, but that’s where it typically stops. Loyalty, however, is about creating lasting relationships with customers by building emotional connections. In fact, research shows that engaged loyalty program members generate three times more lifetime value than non-loyal customers.
Building loyalty starts with consistently delivering on your brand’s promise of exceptional products and a great customer experience. It also involves openly sharing your brand values and going above and beyond to surprise and delight your customers. By resonating on an emotional level, brands can move customers from simply “returning” to becoming passionate “advocates.”
2. How do customers define brand loyalty? What does it mean to them?
Loyalty means different things to different customers. For some, it’s about the rewards and exclusive offers of a loyalty program. For others, it’s about aligning with a brand’s values or experiencing outstanding customer service. To build real loyalty, it’s vital to understand what loyalty means to your customers and how your brand can meet or exceed their expectations.
For some, loyalty is about embracing products that improve their lives or experiencing moments of personalized attention. Research by Capgemini reveals that 63% of customers prefer brands that offer exclusive or early access to products and offers for loyal customers. For others, loyalty is rooted in shared values—such as sustainability, ethical sourcing, charitable giving, or community involvement. Understanding these nuances will allow you to craft a loyalty program that genuinely resonates with your audience.
3. How do you measure customer progress up the loyalty ladder? What does “good” look like?
Many businesses still define loyalty in terms of points, tiers, rewards, or transactions—which is perfectly fine. The 80/20 rule is a helpful reminder here: 20% of your customers likely generate 80% of your revenue. These top customers are essential to cash flow, profits, and growth, but keeping them engaged can be tricky. True loyalty goes deeper than just counting follow-on purchases, especially those made at a discount. Measuring customer engagement and incremental action is they key.
It’s about creating brand-oriented rituals that excite customers and foster a sense of belonging within a like-minded community of stakeholders. We’ve discussed personalization and values alignment as key drivers of loyalty. Today’s customers expect brands to know their preferences and offer tailored recommendations. Predictive analytics can play a vital role in delivering personalized experiences.
But personalization is only effective when it respects customer data privacy. Customers expect transparency regarding how their data is collected and used, so providing reassurance about your data practices is crucial for maintaining loyalty.
By considering these three important questions, you’ll be better positioned to create more intentional customer marketing programs that move customers up the loyalty ladder. In an upcoming post, I’ll dive into three key steps you can take to ensure your loyalty efforts are both meaningful and effective.
In the meantime, I’d love to hear your thoughts - please leave a comment if you found this useful.
As marketers (especially DTC marketers) are asked to do more with fewer resources, it’s no longer enough to simply retain your best customers. We must develop them into dedicated brand advocates. To help with this, it’s important to ask yourself three key questions in your efforts to move customers past mere retention and up the loyalty ladder.
1. What’s the difference between retention and loyalty?
From a marketing perspective, is there really a difference between the two? Aren’t retention tactics sufficient? I believe there’s a critical distinction: retention is transactional, while loyalty is emotional.
Emotions always outweigh transactions. Retention focuses on driving repeat purchases, but that’s where it typically stops. Loyalty, however, is about creating lasting relationships with customers by building emotional connections. In fact, research shows that engaged loyalty program members generate three times more lifetime value than non-loyal customers.
Building loyalty starts with consistently delivering on your brand’s promise of exceptional products and a great customer experience. It also involves openly sharing your brand values and going above and beyond to surprise and delight your customers. By resonating on an emotional level, brands can move customers from simply “returning” to becoming passionate “advocates.”
2. How do customers define brand loyalty? What does it mean to them?
Loyalty means different things to different customers. For some, it’s about the rewards and exclusive offers of a loyalty program. For others, it’s about aligning with a brand’s values or experiencing outstanding customer service. To build real loyalty, it’s vital to understand what loyalty means to your customers and how your brand can meet or exceed their expectations.
For some, loyalty is about embracing products that improve their lives or experiencing moments of personalized attention. Research by Capgemini reveals that 63% of customers prefer brands that offer exclusive or early access to products and offers for loyal customers. For others, loyalty is rooted in shared values—such as sustainability, ethical sourcing, charitable giving, or community involvement. Understanding these nuances will allow you to craft a loyalty program that genuinely resonates with your audience.
3. How do you measure customer progress up the loyalty ladder? What does “good” look like?
Many businesses still define loyalty in terms of points, tiers, rewards, or transactions—which is perfectly fine. The 80/20 rule is a helpful reminder here: 20% of your customers likely generate 80% of your revenue. These top customers are essential to cash flow, profits, and growth, but keeping them engaged can be tricky. True loyalty goes deeper than just counting follow-on purchases, especially those made at a discount. Measuring customer engagement and incremental action is they key.
It’s about creating brand-oriented rituals that excite customers and foster a sense of belonging within a like-minded community of stakeholders. We’ve discussed personalization and values alignment as key drivers of loyalty. Today’s customers expect brands to know their preferences and offer tailored recommendations. Predictive analytics can play a vital role in delivering personalized experiences.
But personalization is only effective when it respects customer data privacy. Customers expect transparency regarding how their data is collected and used, so providing reassurance about your data practices is crucial for maintaining loyalty.
By considering these three important questions, you’ll be better positioned to create more intentional customer marketing programs that move customers up the loyalty ladder. In an upcoming post, I’ll dive into three key steps you can take to ensure your loyalty efforts are both meaningful and effective.
In the meantime, I’d love to hear your thoughts - please leave a comment if you found this useful.
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