It’s no secret, 2025 is off to an eventful start with tariff uncertainty, nagging inflation, and global supply chains in flux. From retailers to the hospitality industry, these economic challenges hit margins hard and force business leaders to have tough conversations around pricing and budgets.
In this post, we make the case for investing in customer loyalty as a long-term strategy to protect revenue, reduce churn, and increase customer lifetime value.
The economics of customer loyalty
In a margin-squeezed economy, investing in customer retention is a far more efficient growth strategy than chasing new acquisition (important too!). In fact, retaining an existing customer can cost 5 to 25 times less than acquiring a new one.
Repeat customers are also significantly more valuable: in retail, they can generate 3–10 times the value of a first-time buyer, and in hospitality, they often spend more and drive referrals.
Just as important, reducing churn by even 5% can boost profits by 25% to 95%, making loyalty a critical margin-preserving tool in high-volume, low-margin industries like retail and hospitality.
Happy customers are willing to pay more
With price increases almost inevitable, loyalty offers another major advantage: price elasticity. When customers have a strong emotional connection to a brand, they become less price sensitive. They’re less likely to comparison-shop or abandon their cart over a small price difference, and more willing to pay a premium for the experience, reliability, and consistency they’ve come to trust.
Alchemer’s Research Solutions Team recently conducted a brand loyalty market research study and found that 80% of participants would be willing to pay more for a product or brand they love. That’s not just a nod to brand preference—it’s a bottom-line opportunity.
In retail, this translates to fewer markdowns, stronger margins, and higher average order values. In hospitality, it means guests who book directly, upgrade rooms, or return for repeat stays. Choosing your property again and again, even if you’re not the cheapest option in town. Ultimately, loyalty softens the blow of rising costs and turns price pressure into pricing power.
Loyalty and feedback go hand in hand
Loyalty doesn’t happen by accident. It’s built through intentional listening and consistent follow-through. In industries where customer expectations are high, and competition is fierce, feedback is your most direct and reliable line to what truly matters to your audience.
When you opt for structured, ongoing feedback loops, not just one-off surveys or occasional reviews, you move from guesswork to clarity. You uncover pain points before they escalate into churn. You surface unmet needs that, when addressed, turn a satisfied customer into a loyal advocate. And most importantly, you demonstrate that customer input isn’t just collected, it drives real change.
In a time when customers have more choices than ever, showing that you’re listening, and proving it through action, is one of the most effective ways to deepen loyalty and differentiate your brand.
How to invest in loyalty during challenging times
When margins are tight and resources are limited, the smartest loyalty investments are the ones that deliver clear, measurable impact. Alchemer gives organizations the tools to build meaningful, data-driven relationships with customers by turning feedback into action at every stage of the customer journey.
- Meet customers where they are: With multi-channel feedback tools, you can collect insights across every customer touchpoint—whether it’s a mobile checkout survey, an in-app feedback prompt, a kiosk at checkout, or a post-stay email. From web and mobile to SMS and email codes, Alchemer makes it easy to gather feedback in the moments that matter most.
- Go from insights to action, fast: Alchemer’s end-to-end platform allows brands to not only collect data but route it to the right teams instantly. With integrations into CRMs, marketing automation, and support tools, feedback doesn’t just sit, it powers real decisions and real change.
- Optimize loyalty programs with real-time input: Loyalty programs only work when they evolve with your customers. With the right mobile feedback tools, it’s easy to meet customers in the moment, whether they’ve just completed a purchase, redeemed a reward, or stayed at your property. These real-time insights help you refine rewards, remove friction, and deliver the experiences your customers actually want, keeping them loyal and active.
Ready to see how Alchemer can help? Request a demo or read how we can help you build a brand health tracking program!
