If You're Looking to Build Loyalty, Aim for Customer Stickiness

For many companies, the difficulty of earning repeat business is a common issue. You can spend a lot of time, effort and money tempting a customer to make their first purchase, but getting them to return is even more challenging.

Figuring out how to convert those one-off purchases into consecutive business will improve customer lifetime value. Why? Because once you convince a buyer to repeat a purchase, the chance of them coming back again is even better.

The methods you can use to attract repeat customers vary, but often involve offering something unique that competitors don’t. When someone makes consecutive purchases based on a business offering better value, they’ve become a sticky customer.

What’s the difference between customer stickiness, customer loyalty and customer retention?

When you hear three terms that sound like the same thing, you’d be forgiven for not understanding the specific differences at first. However, the fine print is important, especially in terms of knowing which one you should be aiming for.

Customer stickiness

The concept of customer stickiness is when a buyer keeps returning to you, despite a competitive market, because of a consistently better value transaction. This might mean you offer a lower price, more convenience, or various other benefits the competition is lacking. Stickiness can help you truly understand your customer base, because you know exactly why they choose to keep coming back.

Customer loyalty

That doesn’t mean you only need stickiness. Loyalty is important because it signifies a deeper relationship between you and your audience. Here, happy customers are willing to forgo a potentially better offer from the competition due to a genuine, emotional bond with your business. In terms of protection against other organizations, customer loyalty is key.

Customer retention

Customer retention refers to how many customers continue to use your service or product. It’s often measured by month or year. It can also be calculated based on how your revenue changes between two fiscal periods. Therefore, if you increase stickiness, you’ll subsequently increase retention. In a recent survey conducted by IFP, ‘The State of Customer Experience 2022/23’, customer retention was selected by 51% of marketing leaders as the most important customer experience metric for their organization, just behind customer satisfaction (60%).

Here’s a quick summary to make things crystal clear:

• Stickiness: Sticky customers return because you provide better value or convenience
• Loyalty: Loyal customers return because they love your product or business
• Retention: A metric showing how many repeat customers your business has

Why should you aim for customer stickiness?

So, why is customer stickiness so important? In short, the terms we’ve covered are all linked together. A high customer retention rate is the overall goal for any business because it’s cheaper to keep a customer than acquire a new one.

To keep previous buyers coming back, you need to build loyalty. People who trust your business won’t churn as soon as a competitor offers a better deal. But to achieve loyalty, you should be aiming for customer stickiness, as those patrons will be primed to develop a deeper relationship with your business.

How to improve customer stickiness

Here are some of the best ways to increase customer stickiness, both for your business and your products.

Review your data

The first step to improving customer stickiness is to identify where you currently stand. Once you know how many sticky customers you have, you can look at the purchase data to highlight any habits, interests and preferences they share. This is useful to figure out exactly why people are returning to you.

Another reason the data is so useful is that you can see how long sticky customers take to come back for a consecutive purchase. In doing so, you’ll be able to identify the perfect time in the customer journey to advertise and reach out to your audience, therefore incentivizing the in and improving customer stickiness.

Learn more: 9 Customer Experience Tactics You Need to Be Using

Devise a unique value proposition

Stickiness relies on a particular value customers get from your business, which other companies aren’t able to match or beat. This is your unique value proposition and everyone within your team should know it. It’s what will fuel your marketing efforts, so you need to make the most of it.

Your customers simply must know about your unique value proposition. If you offer a better value transaction than competitors, reminding people of that will help to improve customer stickiness and eventually lead to customer loyalty.

Communicate effectively

A great way to improve stickiness is to ensure that you’re responsive to customers and any feedback they offer. They’re the ones who use the product, after all. Communicate your roadmap to users so they can see what you’re working on and announce any new updates directly to them. This helps to create a buzz among your patrons, but also supports new users for onboarding, leaving them with a better experience.

Effective internal communication is also vital. Product and customer teams often misunderstand each other, which can lead to an inefficient working relationship. A feedback management system can alleviate that by collating and prioritizing information so that the most important issues can be addressed immediately. Ultimately, the more efficient you are as a team, the better your unique value will become, driving customer stickiness.

Provide high-quality customer experiences

If there is no decent reason for customers to churn, they probably won’t. As long as you remain positioned to be the sensible option, stickiness will increase. However, if your business isn’t offering a high level of customer service, your unique value proposition won’t be so appealing.

If the quality or value you’re offering is no longer appealing to your audience, you’ll be in danger of losing loyal customers. To avoid that, make every interaction positive and engaging for buyers. This is especially important if your unique value comes from a specific use case or feature of a product. You’ll have to unlock the value for customers and the best way to do that is by providing a seamless customer experience.

Further reading:

• How to Deliver a Fluid Customer Journey Across Every Touchpoint
• Customer Service vs Customer Experience: Which One Matters Most?
• The State of Customer Experience in 2022/23 [Infographic]