Building and retaining customer loyalty
Building and Retaining Customer Loyalty
Customer loyalty describes an ongoing positive relationship between a business and a customer. Customer loyalty is a measure of how likely a customer will remain with a company’s products or services even when there are competing alternatives.
The value of customer loyalty
Customer loyalty is important for business growth. Retaining customers is very valuable to a company. Research shows that increasing customer retention rates by five percent increases profits by 25 to 95 percent. Acquiring a new customer can cost some five to 25 times more than retaining an existing one. Loyal customers are more likely to purchase from a brand they trust. They can, for instance, also act as brand ambassadors advocating for your company through social media.
How to encourage customer loyalty
Loyal customers are emotionally connected to a particular company or brand. They make repeat purchases and spend more money on brands that resonate with them. They are loyal for reasons such as the product quality, prices, customer service, nostalgia, and personalised customer experience.
Customer loyalty can be encouraged by engaging customers at every touch point of their journey. Here are five ways to improve customer loyalty.
1. Provide great customer service
Customers are more likely to be loyal to companies that have excellent customer service. Delight customers by delivering on your promises, such as responding to them promptly, resolving issues, and keeping them updated on changes to availability and delivery. Make sure that your employees are providing great service to every customer be it over the phone, online or in-person.
2. Give personalised service
Customers enjoy personalised services such as shopping experiences tailored to their specific needs and preferences. To do so, you will need to fully understand your customers’ needs and wants on a deeper level.
A customer management system can help to manage each customer’s information that has been shared with your company. This will help you anticipate customer needs and provide a personalised experience. Here are some ways to engage customers:
Use profiling tools like surveys to understand customer needs
Personalise web experiences of customers and offer product recommendations
Create a newsletter to update customers on happenings like promotions and new products
Respond to all social media comments on your page
Get feedback from customers about certain products and services
3. Launch a customer loyalty programme
A customer loyalty programme is the cornerstone of building loyalty. A customer loyalty programme can include special offers, discounts, or perks such as free merchandise, rewards, or advance-released products.
4. Create a community
Customers trust their peers. Businesses can deliver added value and build loyal customers by creating a customer community. It could be a knowledge-based or ideas forum, where customers can connect with one another based on common interests or challenges.
5. Collect customer feedback
Customer feedback is crucial in growing and improving business. Asking your customers to share their experiences and ideas for improvement shows them that you care about their opinions. These must be actively considered and implemented to maintain customer trust.
Bernazzani, Sophia. “Customer Loyalty: The Ultimate Guide”. Hubspot. Last updated 25 July 2022, https://blog.hubspot.com/service/customer-loyalty
Forbes. “How to Grow Your Agency’s Remote Work Culture.” Published 30 November 2021, https://www.forbes.com/sites/square/2021/11/30/how-to-grow-your-agencys-remote-work-culture/
Gallo, Amy. (2014, October 29). “The Value of Keeping the Right Customers”. Harvard Business Review. Published 29 October 2014, https://hbr.org/2014/10/the-value-of-keeping-the-right-customers