Loyalty loop instead of marketing funnel
Why the classic funnel is no longer the sh*t
The marketing funnel is dead. Well, maybe not dead, but at least retired. The fairy tale of awareness, consideration, conversion = customer experience ready and everyone is happy is now a thing of the past. In reality, it only really starts after the purchase.
Loyalty loop instead of funnel: The model for the future
McKinsey has developed the Loyalty Loop to map exactly that: the ongoing experience with a brand. Instead of a linear funnel that ends after the purchase, there are two loops:
New customer acquisition: from the first contact to the purchase, basically like in the funnel.
Customer retention: this is where it gets exciting. Customers are convinced, recommend, retain and thus stimulate the first cycle again.
The focus on customer loyalty in particular is the crucial point here. According to the Harvard Business Review, acquiring new customers is 5 to 25 times more expensive than retaining existing ones. While this sounds logical at first, it often fails when it comes to implementation.
How does the Loyalty Loop work?
The loyalty loop consists of two circles, the inner and outer circle:
Outer Circle: Awareness → Consideration → Evaluation → Purchase
Inner Circle: Enjoy → Advocate → Bond
After the purchase, the magic word is retention. The goal: customers become brand ambassadors who voluntarily share positive experiences and attract new buyers. For retention to follow the ideal inner circle process, you have to do something, of course. After all, customer loyalty and satisfaction cannot simply be switched on. However, there are a few levers you can turn to get things moving.
Four levers for your loyalty loop
01/Exceed customer's expectations.
The first touchpoint with the brand should not just deliver, but surprise. Small, well thought-out touchpoints have a big impact. Be it via interactive extensions on the website, a personalised extra with the product delivery or the classic underpromising-overdelivering mechanism.
02/Make use of customer data.
Analytics, feedback, purchase history - all goldmines for insights. The data exists, so why not use it and exploit its value? Many companies have valuable data gathering dust in the back corner. It is obvious that this is wasted success. If you can't do much with all the figures yourself, you should get support. Be it with an agency that provides support or completely low-effort with the help of AI.
03/Deliver personalisation.
Focus on a personal approach, relevant recommendations and offers that customers really want. Here, too, an incredible amount can be drawn from the data. With a little automation here and there, profitable personalisation becomes child's play.
04/Give perfect service & support.
Even if something doesn't go according to plan: fast, empathetic and solution-oriented communication can turn disappointed customers back into satisfied ones. Regardless of whether the product or service does not meet expectations, is delivered incorrectly or there are other problems: compassion and fast support can turn situations that were thought to be lost into positive ones.
Word of mouth: more than just a buzzword
People trust people, not ads. This is also nothing new, but it is very central to the loyalty loop. Whether organic, amplified (referral programs) or influenced (with authentic influencers) – WOM is the strongest lever in the loyalty loop when it comes to referrals. If the levers just described are all set appropriately, buyers will tell their peers about their positive experience and ideally recruit new customers. If you also use a referral program here, you naturally create a special incentive for referrals.
B2B vs. B2C: different loops, same logic
The loyalty loop can be adapted to all business models. Depending on whether the focus is on B2B or B2C, there are different aspects that are decisive at different touchpoints.
Facts and Emotions.
B2C — The focus is on emotions, impulses and short-term needs: people buy because they want something, not because they need it.
B2B — It's about rational decisions, processes, budgets and tenders. CX has to build trust, show seriousness and, above all, reliability.
Decision making processes.
B2C — Customer sees, clicks, buys. The (outer) loyalty loop must be fast, simple and satisfying. If it takes too long or is annoying: Ciao!
B2B — This usually involves multi-headed decision-making processes. The customer experience must serve several stakeholders at this point. The magic words here are: Lots of info, clear processes, follow-ups, support.
Duration & depth of the customer relationship.
B2C — The customer experience must be geared towards promoting repeat purchases and actively supporting customer loyalty. Loyalty is less stable in the B2C environment and must be continuously nurtured.
B2B — The aim of the customer experience should be to ensure lasting satisfaction, make complex processes smooth and promote a stable partnership.
Conclusion: Sounds complicated? But it's not.
Loyalty loops save money, strengthen brands and create real fans instead of fleeting buyers. However, real loyalty and customer retention is created through experiences with brands. In today's flood of offers, loyalty is more important than ever.