Understanding Different Types of Consumer Loyalty | Hydrogen Blog
Understanding Different Types of Consumer Loyalty

Understanding Different Types of Consumer Loyalty

It’s nearly impossible to overstate the importance of consumer loyalty, especially when you’re first building up a brand. As most business owners and managers know firsthand, customer loyalty is an invaluable component of brand and business health. 

There are a number of different strategies for building and retaining customer loyalty. Different types of customer loyalty programs and strategies will naturally be suited to different industries. Understanding what makes a loyalty program successful — and how to implement one that works for your business — is a smart investment of time and money that can result in significant returns in the long run.  

How Does Customer Loyalty Vary by Industry?

Optimizing e-commerce platforms and initiatives is one of the key ways that brands across different industries can increase customer loyalty.

According to a report from 2018, customers are more likely to be loyal to brands that run online businesses rather than retail-only brick and mortar stores and companies. This difference is generally attributed to the impact that customer service can have on consumers.  Consumers today highly value convenience and quality rather than low prices and discounts alone. In a recent survey by KPMG, consumers reported that points and discounts were less likely to build and retain loyalty than a brand’s transparency, care, and honesty. 

In the same KPMG survey, consumers’ answers further illuminated customer loyalty insights. About 74% of respondents stated that product quality was the most important determining factor for building customer loyalty, while 66% credited value for money, and 65% reported that product consistency was the greatest influence on their loyalty to a brand. Over 56% of respondents indicated the importance of customer service. Businesses across all manner of industries can see these numbers and understand the importance of a strong, transparent, and service-oriented mindset for their brand.

What makes a loyalty program successful? The most effective types of customer loyalty programs tend to be those which yield high rewards to clients while maintaining brand quality and customer service above all else. Millennials in particular expect higher standards from the companies they patronize. 

In the KPMG survey, 96% of millennial respondents indicated that companies need to improve the ways they reward their loyal customers, and 78% stated that they would switch to a company that offered a better loyalty program. Loyalty rewards programs are more than a nice perk for customers. They should be a key part of any company’s or brand’s business strategy. 

In What Industries Are Customer Loyalty Programs Most Effective?

Certain industries find customer loyalty programs to be more effective than others. Because the following six industries are evergreen, yet often changing and innovating, they are particularly well-suited to customer loyalty programs:  

  • Fashion and accessories: Because trends change frequently, fashion and accessories are two interlocking industries for which loyalty programs can be highly effective. Loyalty programs can set your brand apart and give you a leg up over your competitors. When it comes to fashion and accessories brands, common customer loyalty rewards include free shipping, promo codes, social media affiliate codes, and birthday month discounts.
  • Cosmetics: The cosmetics and skin care industries are also well-suited to customer loyalty rewards programs. From makeup tutorials on social media to unboxing videos, many consumers of cosmetics products are attracted to the products themselves as well as the communities which they cultivate. Loyalty features such as VIP shopping tiers, free samples, and referral codes often translate well to cosmetics and skin care brands.
  • Food and beverage: You may not immediately think of the food and beverage industry as being conducive to customer loyalty programs. However, as grocery shopping becomes more and more tied to e-commerce and delivery platforms, there will likely be a great deal of opportunity for customer loyalty programs moving into the future. This is especially true of replenishment-style food and beverage programs. Because these items tend to be low-cost at the outset, offering your customers loyalty rewards and bonuses can yield a high ROI for your brand. 
  • Electronics: Most tech shoppers are always on the lookout for the newest products and gadgets as they come available on the market. Customer loyalty rewards can really capitalize on the frequent spending habits of this group. Points-based rewards can often result in increased customer brand loyalty in the tech products industry. 
  • Subscription boxes: The subscription box model can be applied to many of the industries already mentioned, including fashion, cosmetics, and food and beverages. Subscription boxes have also extended into hobbies and crafting products, books, pet items, and home decor. The convenience and novelty offered by subscription boxes make them a great tool for building customer loyalty. Common rewards include free shipping and discounts, subscriber-exclusive offers, and free bonus products.

Create a Loyalty Card Program With Hydrogen

Building a loyalty card program with Hydrogen can help you excel in your industry. Hydrogen’s cutting-edge platform allows for a considerable amount of customization and control over your business’ loyalty card program.

With Hydrogen’s custom rewards options, you can design custom card rewards to be disbursed monthly, quarterly, or yearly. You can control and direct all rewards directly from your Hydrogen portal. With Hydrogren’s tools, you can control when and how you push out loyalty rewards to your customers. Categories include bonus incentives for customers, discounts based on total purchases, and merchant ID-based rewards, as well as rewards based on overall average spending balance.

Contact us today to start creating the loyalty customer program that is right for you and your brand! 


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