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April 28, 2009

Colorful Musings on Customer Loyalty

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I subscribe to a lot of email newsletters. I’ve got one for almost every aspect of my life. There’s one for trendy L.A. shopping and events. I’m signed up for a couple about beauty products. There’s one for green living and one for tortoise lovers. And of course, I receive five or six newsletters about Digital marketing.

nail polish
Funkification: yellow green nail polish!

One of the newsletters I’m subscribed to is all about nail polish. What can I say? I love to rock the funky colors on my finger tips. I ordered from this Web site once, and during the process I checked the little box that signed me up for their weekly newsletter. Sadly, I haven’t purchased any nail polish since. I actually visit the site every time a newsletter arrives to do a little window shopping and ogle the new colors, but so far I’ve resisted the temptation to click “buy”.

Personally, the reason I haven’t bought any nail polish since the initial purchase is because the first time around was a bit of a splurge. I bought $70 worth of nail polish in one feel swoop, and frankly, I haven’t even cracked open half the bottles. (Yes, I have a problem.) [Ooh, spa party at V’s, everyone! –Susan]

But despite the fact that I haven’t yet set up any lifetime value for the company on paper, I look a lot like their ideal customer — in my mind anyway. And that’s because I’m loyal.

The Grass Isn’t Greener

On the Convince and Convert blog, Jason Baer reminds us that it costs more to get a new customer than it does to keep an old one. We’ve heard it before, but we’re prone to forgetfulness. Instead of spending time seducing new customers, it’s more effective and profitable to keep your happy customers, well, happy. A little loyalty can go a long way.

It’s Not All About Price

This week’s MarketingSherpa chart of the week shows us that price reductions aren’t the only way to build a customer base during tight times. While cutting prices is usually the first idea to keep the customers coming, there are other ways to boost customer engagement, and hopefully, loyalty. Limited time promotions, customer loyalty programs and bonus gifts are a few of the ideas that make the grade. I was reeled in to my nail polish binge by the offer of free shipping for orders over a certain amount and a discount on orders of more than four items.

The Problem with Satisfaction

Rohit Bhargava of the Influential Marketing Blog explains the difference between a satisfied customer and a loyal one — and how much more important a loyal customer is than a happy one. Whereas a satisfied customer would be willing to switch to a better option, a loyal customer is willing to make excuses for your occasional fumbles. According to Rohit, loyalty is derived from a mix of excellent customer service, fulfillment of your promises, and the personality of your brand.

So ignore the fact that I haven’t made a second purchase from my beloved nail polish site, because it’s actually just a matter of time. There’s just something about their great deals, their awesome selection and the way they exceeded my expectations — this winning combo will draw me back time and time again.

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