The pandemic had a negative impact on many businesses. 

Due to the recession, more people are staying at home and only purchasing from brands that they know. This is one of the reasons why it’s ideal to invest in customer loyalty and retention. 

Fundera reports that 65% of a company’s profit comes from existing customers. In addition, 43% of loyal customers are likely to spend more. 

While businesses can focus on attracting more customers, this may be more expensive in the long run. After all, it takes a lot of time and resources to get one customer along the sales process. 

According to OutboundEngine, to get a new customer can cost five times more than to retain customers.  Furthermore, the success rate of selling to a new customer is around 5% to 20%, while existing customers have a 60% to 70% success rate. 

These numbers prove that businesses should focus on the customers that they already have. This entails improving  customer engagement and implementing a customer loyalty program. 

In this post, I’ll show you why customer loyalty is a bulletproof marketing channel, and tips for increasing customer retention. 

Let’s get started. 

Why is customer loyalty a bulletproof marketing channel?

If you want to effectively grow your business, then keep every customer that you have. 

This should go beyond launching drip campaigns and following a marketing plan. Improve customer service by promptly replying to messages and quickly resolving issues. Provide incentives to current customers to keep buying from your business. 

When customers are satisfied with their experience, they become loyal to your brand. Loyal customers will keep buying from your eCommerce store for months and even years. 

Having more loyal customers ensures that your business will stay afloat even amidst a recession. You won’t be pressured to lower your prices because you have a devoted fanbase. 

That’s a big advantage because you will increase your profits as you grow your customer base. 

If you’re still not yet convinced, here are some reasons why customer loyalty is a bulletproof marketing strategy. 

Loyal customers provide referrals

The ideal customer lifecycle involves three stages: purchase, retention and referral. 

When customers love your brand, they’re likely to promote it with their friends and family. They talk about their positive  customer experiences in everyday conversations and encourage their network to try it too. 

Since people are more likely to trust referrals from their network, then your current customers are effective brand advocates. 

In fact, people are 4x more likely to purchase items recommended by their friends. And, according to ReferralCandy, 70% of customers trust brands and recommendations from friends and family. In contrast, only 15% trust posts created by brands. 

As a result, loyal customers can help increase your customer base too. 

Loyal customers can forecast sales 

While you can never predict the future, having loyal customers can help you estimate your sales for the upcoming month or year. After all, if you have customers that return regularly, it’s likely that they’ll keep returning in the future. 

Meanwhile, businesses with only a few loyal customers may have a dim sales forecast. If new customers keep leaving, they’ll have to keep attracting new customers to stay afloat. Predicting user behaviour may also be difficult when the majority of customers don’t return. 

Loyal customers buy more 

Loyal customers are likely to buy more from your business. 

Just look at your purchases from the past few months. We bet that you bought more for brands that you’re familiar with than newer brands. 

A study by InMoment found that 60% of loyal customers will purchase more often and 50% will buy more from their preferred brands. Alternatively,  increasing customer retention rates by a mere 5% leads to a 25% to 95% boost in profits. 

How to Increase Your Customer Retention? 

Now that you know the importance of customer retention, how will you increase retention? Here are some optimization strategies that we recommend.

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Implement a loyalty program 

A good loyalty program can effectively boost customer retention to your online store. After all, customers want their loyalty to be rewarded. 

If a loyal customer returns regularly, give an exclusive discount to show your appreciation. Give a freebie or access to exclusive products so they will keep their membership. This makes it a lot harder for your competitors to snag your regulars. 

To get started, we recommend using tools like CandyBar which functions like a digital punch card system. You can use it to easily jumpstart a program and customize your redemption tiers and rewards. 

loyalty program

Create a referral program

Loyal customers are also your brand advocates.

While referrals often involve an organic process, businesses can incentivise customers through referral programs. 

A referral program rewards brand advocates in exchange for a successful referral. These rewards may be in the form of discounts, freebies and exclusive offers. 

For instance, BaronFig gives customers $10 for a successful referral, while the referred friend will get $10 off for their first purchase. 

referral program

Improve customer experience

Of course, people are likely to buy again if they’ve had a positive experience with an online store. 

That said, look at how you can improve your customer journey. Identify your customers’ needs and determine how you will achieve it. 

Did potential leads leave your store because you didn’t respond to their queries immediately? Then invest in chatbots and hire customer service agents. 

Are customers not clicking your CTAs? A/B test your landing pages and experiment with your landing page copy. 

While a customer journey will never be perfect, there is always room for improvement. So, look at customer behavior and keep collecting feedback. 


Regardless of your industry, having a high rate of customer retention means your brand will last for a long time. 

This is because customers will likely keep purchasing from businesses that they trust. 

While improving customer retention rate seems like a challenge, you can easily get ahead by implementing your own loyalty program. After all, customers love to get rewarded in exchange for their loyalty. 

Monique Danao is a writer for ReferralCandy and CandyBar.