4 Ways to Build a More Loyal Customer Base

The principles of scarcity and exclusivity are the real keys to loyal customers.

Not too long ago, the United States Postal Service recreated one of their most famous failures: a 1918 blunder on a sheet of stamps, any one of which is worth a fortune today. While in production, a sheet of stamps was flipped, inverting the image of the “Jenny” biplane, making them a sought-after rarity for collectors. In 2013, the USPS celebrated its old mistake with a new “Inverted Jenny” campaign.

Organizations like the USPS are finding creative ways to connect with their customers using two key ideas: the principles of scarcity and exclusivity. Knowing a product is in limited supply gets customers excited and increases their engagement with a brand without the need for short-term engagement tactics like deep discounts or flash sales.

In an era where commerce is driven by flash sales, deep discounts and complex promotions, customers see mostly short-term wins in the form of cheaper prices. Unfortunately, the retailer loses in two ways: revenue, and a customer who no longer respects your full retail price. No deep bond is formed.

But if you use a combination of engagement strategies that leverage scarcity or exclusivity, you can provide greater value to your customer without sacrificing your short- or long-term targets. In-N-Out is an excellent example: Its most loyal customers know they can modify menu items just by asking for them in the correct, coded way — an informal perk honored (but not promoted or perpetuated) by the company.

So, how do you find your own “inverted Jenny” — or animal-style burger? Here are a few steps to get started:

  1. Cut any parts of your strategy that don’t align with core values. Reexamine and reconsider your mission and values. If you value creating lasting, deep bonds with your customer, make sure your strategy aligns with that goal. Cut out whatever doesn’t line up, no matter how difficult the short-term ramifications are. You may end up replacing your promotional strategy with a purely engagement-driven strategy.
  2. Gain a deeper understanding of what your customer values. Customers want more money left in their wallets, yes, but there are many other ways to engage and deliver value beyond dollar or percentage-off discounts. Upgraded shipping, exclusive perks for your most loyal customers, access to particular products or services, or just a simple (and personal) gesture or email all go a long way. Case in point: Amazon charges customers $79 a year for Amazon Prime access, with perks like instant media streaming and upgraded shipping speeds. Zappos has a VIP group with similar perks.
  3. Think about your accidents, and how you made up for them. Some of the greatest business insights come in the form of rectified mistakes, like the USPS’ famous inverted Jenny. Last time a shipping or service delay occurred, you may have compensated your consumer beyond a refund. Did it work? If so, you may have hit on a way to earn a loyal consumer that you can reuse later.
  4. Combine the principles of exclusivity and scarcity. Nike recently created a small (scarce) number of access codes to grant users the ability to wear products that were in an exclusive release phase. In doing both, they created even greater excitement and engagement for their most committed fans.

You can replicate these brands’ success stories, too. Start by empathizing with your customer and meeting their needs without sacrificing your own goals. You’ll build more sustainable relationships — and earn some lifelong customers — in the process.

Aman Advani is CEO and Co-Founder of Ministry of Supply, a menswear company focused on creating a new category of clothing, Performance Professional, through a collaboration between experienced engineers and seasoned fashion experts.

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4 Ways to Build a More Loyal Customer Base

The principles of scarcity and exclusivity are the real keys to loyal customers.

Not too long ago, the United States Postal Service recreated one of their most famous failures: a 1918 blunder on a sheet of stamps, any one of which is worth a fortune today. While in production, a sheet of stamps was flipped, inverting the image of the “Jenny” biplane, making them a sought-after rarity for collectors. In 2013, the USPS celebrated its old mistake with a new “Inverted Jenny” campaign.

Organizations like the USPS are finding creative ways to connect with their customers using two key ideas: the principles of scarcity and exclusivity. Knowing a product is in limited supply gets customers excited and increases their engagement with a brand without the need for short-term engagement tactics like deep discounts or flash sales.

In an era where commerce is driven by flash sales, deep discounts and complex promotions, customers see mostly short-term wins in the form of cheaper prices. Unfortunately, the retailer loses in two ways: revenue, and a customer who no longer respects your full retail price. No deep bond is formed.

But if you use a combination of engagement strategies that leverage scarcity or exclusivity, you can provide greater value to your customer without sacrificing your short- or long-term targets. In-N-Out is an excellent example: Its most loyal customers know they can modify menu items just by asking for them in the correct, coded way — an informal perk honored (but not promoted or perpetuated) by the company.

So, how do you find your own “inverted Jenny” — or animal-style burger? Here are a few steps to get started:

  1. Cut any parts of your strategy that don’t align with core values. Reexamine and reconsider your mission and values. If you value creating lasting, deep bonds with your customer, make sure your strategy aligns with that goal. Cut out whatever doesn’t line up, no matter how difficult the short-term ramifications are. You may end up replacing your promotional strategy with a purely engagement-driven strategy.
  2. Gain a deeper understanding of what your customer values. Customers want more money left in their wallets, yes, but there are many other ways to engage and deliver value beyond dollar or percentage-off discounts. Upgraded shipping, exclusive perks for your most loyal customers, access to particular products or services, or just a simple (and personal) gesture or email all go a long way. Case in point: Amazon charges customers $79 a year for Amazon Prime access, with perks like instant media streaming and upgraded shipping speeds. Zappos has a VIP group with similar perks.
  3. Think about your accidents, and how you made up for them. Some of the greatest business insights come in the form of rectified mistakes, like the USPS’ famous inverted Jenny. Last time a shipping or service delay occurred, you may have compensated your consumer beyond a refund. Did it work? If so, you may have hit on a way to earn a loyal consumer that you can reuse later.
  4. Combine the principles of exclusivity and scarcity. Nike recently created a small (scarce) number of access codes to grant users the ability to wear products that were in an exclusive release phase. In doing both, they created even greater excitement and engagement for their most committed fans.

You can replicate these brands’ success stories, too. Start by empathizing with your customer and meeting their needs without sacrificing your own goals. You’ll build more sustainable relationships — and earn some lifelong customers — in the process.

See Also: 10 Reasons Why Taking VC Money Might Be a Bad Idea for Your Startup

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Aman Advani is CEO and Co-Founder of Ministry of Supply, a menswear company focused on creating a new category of clothing, Performance Professional, through a collaboration between experienced engineers and seasoned fashion experts.