You’ve poured your heart and soul into building a fantastic product or service. You’ve launched a slick marketing campaign, and the new customers are rolling in. That’s a huge win!
But what happens next? What comes after that first sale?
If you’re like many business owners, you might be so focused on finding the next customer that you forget about the ones you already have. As host of the Business Mastery Podcast Dawn Kennedy says, “Keeping your clients and keeping them happy… should be a huge part of your business efforts.”
Winning a customer is one thing, but keeping them is another game entirely. That’s where the real magic happens. This isn't just about punch cards and a free coffee after ten purchases.
We’re diving into both the art and the science of customer loyalty. It’s about understanding your customers on a deeper level (the science) and finding clever, personal ways to show them you care (the art).
Let's explore how you can create loyalty programs that not only work but also turn happy customers into lifelong fans.
This blog is based on a recent podcast conversation our founder, Adam Ortman, had with Dawn Kennedy on the Business Mastery Podcast. Listen to the full podcast here, and check out our continued thoughts below.
The Value of Customer Retention
It’s easy to get caught up in the thrill of acquisition. More customers equals more sales, right? It's the simple, straightforward path to growth. Businesses often pour their budgets into ads, promotions, and outreach to attract new faces. The problem is, this approach overlooks a goldmine sitting right in your backyard: your existing customer base.
But constantly chasing new customers gets expensive in a hurry. Think about the costs of advertising, content creation, and sales efforts. It all adds up. Retaining a customer you've already won is far more cost-effective. Recent studies have shown that an increase of 5% in customer retention can increase a company’s process by 25 to 95% over time.
As Kinetic319 founder Adam Ortman noted, “Keeping them as customers... is a lot cheaper than going on finding new customers.” Your current customers already know you, trust you, and have shown they like what you offer. You don't need to convince them from scratch. You just need to give them a reason to stay.
Understanding Lifetime Value (LTV)
To truly grasp the power of retention, you need to think beyond a single transaction. This is where Lifetime Value (LTV) comes in. LTV is the total revenue you can reasonably expect from a single customer throughout their entire relationship with your business. It shifts your focus from short-term gains to long-term profitability.
Adam put it perfectly: “How do you re-engage those individuals through their lifetime? How do you really start focusing on an LTV or a lifetime value of a customer?”
When you start looking at LTV, you uncover hidden opportunities. A customer who makes small, frequent purchases might be more valuable over time than one who makes a single large purchase and never returns. And existing customers, on average, spend up to 67% more than brand-new ones.
The takeaway: when you focus on LTV, you can identify your most valuable customers and figure out how to find more people just like them.
The Role of Surveys in Building Loyalty
How can you give customers what they want if you don’t know what that is? Stop guessing and start asking. Surveys are one of the most powerful yet underused tools for building loyalty. They give you a direct line to your customers' thoughts, priorities, and motivations.
As Adam advised, “Survey your clients. Reach out to them and just ask them questions about their priorities and motivations.” You can ask about anything:
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Their satisfaction with your products.
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What new services they’d like to see.
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Which social media platforms they use.
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What blogs they read.
The timing of your surveys is equally important. You could send a quick one-question survey a week after a purchase or a more in-depth one every six months.
The right cadence depends on your business model. “We do ours in May and in November... but it's going to be different for every business,” Adam explained. For businesses with long sales cycles, once a year might be enough. For those with frequent customer interactions, a quarterly check-in could be better.
Creative Loyalty Program Ideas
Loyalty programs don't have to be boring. They also don’t need to be generic punch cards. In fact, the more creative you get, the more memorable they'll be. Think beyond simple discounts and consider what would truly delight your customers.
Referral programs are a classic for a reason. They work. Rewarding your current customers for bringing in new ones is a win-win. As Adam suggested, “If you bring in a new customer, you get X percent off... or 10 percent off your next purchase.” This not only encourages loyalty but also fuels your acquisition efforts with high-quality leads.
But you can also think outside the box. Adam shared a brilliant example from a wedding caterer. Instead of just seeing the wedding as a one-time event, they found a way to stay connected. “They make a small version of your wedding cake for your anniversary every year.” How amazing is that?
It’s a personal, emotional touch that keeps the business top-of-mind for future events and referrals. What’s the equivalent for your business? Maybe it’s a personalized gift, an exclusive piece of content, or early access to new products. Make it you, make it unique, and make it memorable. That’s how you keep customers coming back.
Leveraging Technology for Retention
Keeping track of customer data on sticky notes or in a messy spreadsheet just won't cut it. To build a scalable and effective loyalty program, you need the right tools. Customer Relationship Management (CRM) platforms like HubSpot or Salesforce are essential for modern businesses.
Adam emphasized this as the foundation: “Step one, organize your customer data, potentially use a tool.” A CRM acts as a central hub for all your customer information. It tracks their contact details, purchase history, and every interaction they’ve had with your brand.
With this data organized, you can start segmenting your audience. A CRM makes it easy to identify your top 20% of customers, the ones who likely drive 80% of your revenue. You can create segments based on:
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Total amount spent.
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How long they've been a customer.
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The specific products or services they’ve purchased.
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Geographic location.
This allows you to tailor your loyalty strategies. You can send special offers to your VIPs, re-engagement campaigns to customers who haven’t purchased in a while, and personalized recommendations based on their past behavior.
Communication Strategies for Loyalty
In a world where the average person receives over 120 emails a day, just sending a message to talk about your loyalty programs isn’t enough. Your communication needs to be personal, valuable, and delivered through the right channel. Blasting the same generic newsletter to everyone is a recipe for being ignored.
Your goal should be to provide genuine value. As Adam suggested, “The newsletter should probably be 100 percent value with a little dangle of 'do you want to buy some more?'” Share helpful tips, insightful articles, or entertaining stories that your audience will appreciate. The sale should feel like a natural extension of the value you’re already providing, not the sole purpose of the email.
And don’t forget to think beyond email. While SMS can be effective for timely alerts and promotions, another medium is making a surprising comeback. Adam pointed out, “Snail mail seems to be making a little comeback... it feels more personal.” A handwritten thank-you note or a high-quality postcard can cut through the digital noise and make a lasting impression.
Testing and Iterating Loyalty Programs
You’ve launched a new loyalty initiative. You’re excited. But the results aren’t quite what you expected. Don't panic! Building a successful program is a process of testing, learning, and iterating. Not every idea will be a home run, and that’s okay.
Embrace the mindset of experimentation. Adam encouraged businesses to, “Soft launch it, see how it goes... if it doesn't work, let's roll it back.”
Rolling back a program that isn’t working isn’t a failure, by the way. It’s a smart business decision based on data. Each test, whether it succeeds or fails, provides valuable insights that will make your next effort even better. Listen to customer feedback, track your metrics, and don’t be afraid to make changes.
Actionable Steps to Get Started
Ready to build a loyalty program that keeps your customers coming back? It might seem like a lot, but you can get started with a few clear steps. Follow this simple roadmap, and as Adam said, “If you do those three or four steps, you're going to be in a great spot.”
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Organize Your Customer Data: If you're not already, get your customer information into a CRM. Even a free tool can make a world of difference in helping you see the big picture.
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Segment Your Customers: Define who your top customers are. Is it based on their spending, how long they've been with you, or another metric? Group them so you can start tailoring your approach.
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Create and Distribute Surveys: Use a free tool like Google Forms to create a short survey. Ask questions that will help you understand their needs and motivations. Consider offering a small incentive to boost your response rate.
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Develop and Test Loyalty Initiatives: Based on your survey insights, brainstorm a few loyalty ideas. Start with something small, like a referral program or a special offer for your top segment, and test it out.
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Communicate Value Consistently: Whether it's through email, social media, or even snail mail, focus on providing value in every interaction. Make your customers feel seen and appreciated.
Creating Loyalty Programs: An Important Balancing Act
Building a thriving business requires a delicate balance. While acquiring new customers is essential for growth, retaining the ones you have is the key to long-term, sustainable success. It's about building real relationships that go beyond the transaction.
By combining the science of data with the art of creative, personal touches, you can create a loyalty program that resonates deeply with your audience. So take a moment to look at your existing customers.
How can you show them you appreciate their business? As Dawn Kennedy wisely advised in the podcast, “Don't ignore your current customer. And keep moving.”
Want to learn more about how you can create your own loyalty programs that keep customers coming back for me? Have a listen to Adam Ortman’s episode on the Business Mastery podcast, and get in touch with Kinetic319 to learn more about how we can help you meet your business goals.