Fighting Inflation With Loyalty

Fighting Inflation With Loyalty. Some brands are slashing prices as a short-term way to boost sales. Although quick and deep cost cuts are tempting, brands should strike a balance between reducing immediate financial damage and investing in the future.

The biggest key to flourishing beyond mere survival is investing in one brand asset: customer loyalty. Loyal customers are worth far more than short-term sales. In fact, a 2021 study estimated that loyalty increases a customer’s worth by 22 times.

It costs less to sell to loyal customers because they’re more likely to buy, with the probability of a sale jumping from 5–20% for a new customer to 60–70% for a returning one. Loyal customers are worth far more than short-term sales. In fact, a 2021 study estimated that loyalty increases a customer’s worth by 22 times.

It costs less to sell to loyal customers because they’re more likely to buy, with the probability of a sale jumping from 5–20% for a new customer71 to 60–70% for a returning one. Businesses are building trust that can outlast a recession by investing in retention. Customer loyalty is a win-win.

Strong customer relationships also make price increases more tenable. Almost 40% of loyal customers will buy the brand’s product even if cheaper options exist, and 60% of customers tell others about brands they’re loyal to. Subscriptions and Membership-driven, gated digital communities are also on the rise in an effort to drive customer loyalty.

Brand loyalty takes a hit in times of economic crisis, which is why more loyalty programs show up116 across industries when spending is down. Six out of 10117 companies had loyalty programs to thank for keeping customers engaged during the pandemic..