Customer stickiness is vital to ensure long-term success and profitability for your brand. But it's hard for brands to truly create the experiences that lead to “sticky” customers.
In this article, we’ll explore the concept of customer stickiness and its benefits, and then provide a step-by-step guide for marketers to improve stickiness with their customers.
What is customer stickiness?
Customer stickiness refers to the likelihood of customers staying committed to a particular brand, product or service over time. It’s a measure of customer retention and the effectiveness of loyalty programs. When customers are sticky, it means that they’re satisfied and will stick with your brand, products or services. They are brand loyal and less likely to churn or shop with your competitors.
Factors that influence customer stickiness include price, convenience, product quality, customer service, brand reputation and the cost of switching to a competitor. And brands go about creating customer stickiness in a number of ways.
Marketers might remember the subscription service "boom" of roughly a decade ago (like Blue Apron, StitchFix, etc.), during which brands left and right were attempting to create customer stickiness through ease of use: It takes something off a customer's plate when they're subscribed to a regularly delivered product or service. There is also a higher barrier to entry to cancel or leave, which further drives stickiness. Although the general fervor for product-based subscriptions has died down, many of those brands are still around and many legacy, established retailers offer discounts to "subscribe and save" on products a person may frequently use (Sephora, for example, offers a slight discount if you subscribe for refills of a product at a regular cadence).
That's just one example of how to create customer stickiness, but brands can do this through a variety of means, always offering value to customers in an attempt to keep them coming back for more.
Customer stickiness vs. customer retention
Customer stickiness and customer retention are similar concepts but have distinct differences.
Customer retention refers to the company’s ability to retain its customers over time. It’s measured as a percentage of customers retained within a specific period. It focuses on the overall customer base and percentage of maintained customers and looks back at actual customer behavior and loyalty.
Customer retention tells you how many customers stick around, but not necessarily why.
In contrast, customer stickiness refers to the tendency of customers to remain loyal to a specific brand and continue to purchase or use that product. It focuses on future behavior and what about the product, service or brand that leads to customer engagement. Stickiness helps you understand why customers stay loyal. And it ultimately leads to retention.
Customer stickiness vs. customer loyalty
Similarly, customer stickiness and loyalty aren’t the same thing, though they are similar.
Customer loyalty is the willingness to continue purchasing from a company or brand without even considering the competition. It’s often demonstrated by actual purchase behaviors, like repeat buying or engagement and advocacy. Loyalty is about the connection with the brand itself, including its unique voice, values or perspective.
Customer stickiness, in contrast, is more about the actual products or services than the brand. Stickiness engagement is due to the unique characteristics or value proposition of a specific product or service that customers can’t get from other providers.
Both customer stickiness and loyalty are related to retention and indicate a strong relationship between customers and businesses. They both signal satisfaction and the likelihood of repeat purchases. Stickiness may be an early indicator of loyalty.
Why should marketers care about customer stickiness?
Customer stickiness is important for marketers because it directly impacts a company's long-term success and profitability. This section will outline a few reasons why you should prioritize stickiness.
Improve customer loyalty
As already mentioned, customer stickiness can lead to loyalty. Marketers can increase customer loyalty and drive repeat business by focusing on factors that increase stickiness.
Brand perception is also a part of the loyalty conversation. By ensuring that customers have a positive view of your brand (and products or services), you can influence loyalty and brand equity and encourage meaningful engagement.
Increase referrals
Sticky customers are engaged with your brand and love to share their positive experiences with others. By increasing customer stickiness, marketers can boost word-of-mouth marketing, a highly effective method for acquiring new customers.
High customer stickiness can also attract new customers. Potential customers may look to existing customers for insight into the product or service’s quality or value.
Increase customer lifetime value
Every customer is valuable, but retaining your shoppers increases your likelihood of long-term growth.
Loyal customers tend to spend more over time. By improving customer stickiness, marketers can increase customer lifetime value (LTV), a key metric for business success.
Create seamless customer journeys
Designing seamless customer journeys improves engagement and reduces customer churn, leading to increased stickiness. Marketers should focus on creating smooth, intuitive customer journeys to improve stickiness.
A positive customer journey can also reduce the churn rate, the percentage of customers who stop using a product or service. Lower churn rates contribute to higher customer stickiness.
Stabilize revenue
High customer stickiness leads to more predictable and stable revenue streams. Loyal customers are more likely to make repeat purchases, leading to consistent sales and revenue.
Acquiring new customers is time consuming and expensive. Prioritizing product stickiness can help drive consistent and reliable revenue growth.
Determine competitive advantage
High levels of customer stickiness can strengthen a brand's position in crowded marketplaces—and even create barriers to entry for new competitors.
Loyal customers can help maintain and even improve market share. By fostering loyalty and creating a unique value proposition, marketers can differentiate their brand from competitors and create a competitive advantage.
Improve operational efficiency
Loyal and engaged customers are more likely to provide valuable feedback that can be used to improve products, services and customer experiences. This leads to operational efficiencies and reduced redundancies within your supply chain and processes.
Sticky customers also reduce the need for constant aggressive marketing and sales efforts, thus improving cost efficiency.
6 steps to increase customer stickiness
Now that you understand what customer stickiness is and why it’s important for brand marketers, let’s discuss how to increase it. Below is a step-by-step guide to increasing customer stickiness.
1. Deliver quality services and products
Customer stickiness is all about why shoppers choose you over the competition. And it starts with delivering quality products or services.
One great thing to do is focusing on delivering an outstanding first impression to further hook new customers. An example of this could be an excellent onboarding/welcome experience for your customers: This could be something like an email welcoming them to the brand, or offering discounts on first purchases. The Bouqs, for instance, is a flower delivery service that offers first-time bouquet senders a hefty 20% off. This brand offers a subscription service (a monthly flower delivery), which, as mentioned earlier, further helps contribute to customer stickiness.
You also won't achieve stickiness without quality (or convenience or price/value). So, another thing to do is to work with your brand's product development teams to ensure your offering is worthy of being "sticky" in the consumer’s eyes.
2. Create a unique value proposition for your brand
Having a great product isn’t enough; you also need a clear value proposition and associated messaging. Customers need to understand why the product or service is unique, valuable and worthy of their time and attention. They need to find your offering valuable for it to be sticky.
A unique value proposition (UVP) informs your sales and marketing efforts and ensures your ideal customer understands what you have and why they should buy it over the competition. Do you offer the best price for your product or service? Do you include or add something that a competitor doesn't? Do your products have a longer lifespan than the competition? Are they made of better, high-quality materials?
It’s your job to tell customers that you have something they can’t get elsewhere.
3. Build a customer loyalty program
Ultimately, sticky customers drive loyalty. Having the right loyalty management software is an effective way to strategically engage with and nurture these customers and incentivize repeat business.
Whether it’s through exclusive offers, rewards or special experiences, loyalty programs can turn casual—or sticky—fans into brand advocates. This further strengthens the relationship and stabilizes revenue.
Dunkin' offers a loyalty program that surprises and delights their customers with membership perks, and with 20M+ real-time transactions per day, it's clear the company is offering a customer experience worth engaging with. Dunkin’ crafts a connected loyalty experience with agile mail and in-app content, 1:1 messages in loyalty statements, push notifications and contactless offerings. The right loyalty program keeps customers engaged, feeling valued and coming back for more.
4. Personalize and tailor customer interactions
Part of what makes brands sticky and beloved is the experience they provide. To increase customer stickiness, add personalization and customization to every customer interaction. This includes social media, automated transaction communications, proactive outreach and reactive responses to customer inquiries.
Use your interactions to emphasize what matters most to customers, from the products they love to the value they come back for. Customer stickiness relies on customers having a reason to stick; as soon as you no longer deliver on your promises or expectations, they may look to other providers.
Service-based brands can turn new customers into sticky ones with high-touch onboarding experiences. This allows you to share your UVP, tailor interactions to the individual and solve their unique challenges, all increasing stickiness and decreasing the likelihood of churn.
Walgreens is a great example of a brand leveraging personalization capabilities to drive measurable value for their customers. With Epsilon Digital, Walgreens leverages real-time data to personalize the customer experience for individual shoppers based on their unique preferences, and it worked: By personalizing wellness on an enormous scale, Walgreens saw $315M in incremental sales from digital media advertising in a single year.
5. Determine a stickiness metric
To determine whether your stickiness efforts are working, you need to know what metrics to track. Here are a few ways to monitor your stickiness:
- Customer stickiness metric: Divide the number of repeat customers by all customers and multiply that by 100.
- Lifetime value: This is the predicted net profit attributed to a customer's future relationship.
- Repeat purchase analysis: This is the time it takes for customers to make repeat purchases. A shorter time frame indicates higher stickiness and a stronger likelihood of repeat business.
- Affinity analysis: Purchase patterns can identify which products or categories are driving the most repeat business or are the stickiest.
- Marketing campaign analysis: Campaign performance can measure engagement levels, particularly with personalized content. Higher engagement indicates stronger marketing stickiness, interest and/or loyalty.
- Net promoter score (NPS): This shows how likely customers are to recommend your brand, products or services to friends and family. Your NPS is the total percentage of “promoters” minus the total percentage of “detractors.”
- Customer feedback and surveys: Gather insights into customer satisfaction, loyalty and the likelihood of purchasing again. This data provides valuable indicators of stickiness and can give insight into why customers will or won’t become loyal.
6. Analyze the data
Monitor your stickiness metrics through regular reporting. By tracking this metric over time, brands can assess the effectiveness of their strategies and make data-driven decisions to increase customer stickiness.
Take your metrics, insights and learnings to understand the success of your customer stickiness efforts and plan your future efforts.
Personalized customer marketing with Epsilon
As the first step in a buyer’s journey toward loyalty, customer stickiness is perhaps one of the most important factors for marketers. Stickiness in business increases referrals, leads and LTV, stabilizes revenue, improves operational efficiency and sets a brand up for differentiation and success.
But at the core of creating customer stickiness, marketers need to focus on creating great customer experiences. The right loyalty management software can be a great place for marketers to start. Through effective personalization based on individual-level customer identity resolution real-time data and industry-leading technology, a strong loyalty strategy can optimize customer stickiness efforts. Learn more.