Loyalty is absolutely a big word in every relationship. Are you looking at building trust, security or prosperity? The most important ingredients you need without any doubt is loyalty.
In the word of American author Elbert Hubbard “If put to a pinch, an ounce of loyalty is worth a pound of cleverness.” As business owners, if there is anything you need for your business to flourish, customer loyalty it is.
Why Customer Loyalty is Important
Loyal Customers Spend More Per Order:In today’s business environment where customers have endless options to choose from, if you get loyalty, you must do everything to sustain it. When customers decide to be loyal to your brand, they throw everything behind you to make you grow.
For instance, studies by RJMetrics indicate that besides shopping more frequently than average customers, the top 10% of loyal customers spend three times more per order than the lower 90% while the top 1% of your loyal customer spend five times more than the average customers. If you are fortunate to have loyal customers, a preponderant amount of your worries over turnover and getting a stable customer base is solved.
It is Cheaper to Retain than Acquire New Customers: The benefits of loyal customers are massive. For instance, while it is gratifying to gain new customers, it comes at a cost. It is established that it is cheaper to retain existing customers than acquire new ones with lots of the established company positing that it is as much as seven times 'more costly to get over new customers than to retain old ones.
When you consider against the backdrop that the likelihood of retaining an existing customer is as high as 60-70% whereas for a potential customer it is as low as 5 -20%, then the need to retain existing customers is underscored.
Brand Advocacy: while loyal customers are excellent to have, customers who advocate on behalf of a brand is by all means far better.
Advocacy comes in different forms ranging from referring friends to writing positive reviews about the brand and promoting the brand on social platforms. Advocacy adds speed and energy to your marketing drive.
How Do You Create Loyal Customers?
The challenge, therefore, is how do you get loyal customers? Customers do not just decide to be loyal to a brand on a platter; there is an interplay between your actions and customers’ responses, but the process must begin with you first.
It presupposes then that intentionality and consistency in value-added service must form the core of your operations. Some of the secrets of acquiring loyal customers include:
Provision of Excellent Customer Support: excellent service is in the heart of customer retention; every customer wants to have a positive user experience which encompasses their interaction with your product and brand entirely. How user-friendly is it for customers to navigate your website? What kind of customer support systems do you have in place? How long does it take from clicks to completion?
All of these are metrics which play huge roles in determining if a customer would want to make a repeat visit or not. As a store owner, you need to be aware of the role each component plays in the overall success or reputation of your store. And by extension, the loyalty of customers to your brand.
If there is a failure in any of these, it will result in a negative customer experience overall, and there are chances that such customers will not make a repeat visit.
Offer an Excellent Customer Service
Other advantages that accrue from customer loyalty are numerous. For example, a satisfied customer is an asset to a company because they become a credible source of advertising for the company through referral. The trickle-down effect is exponential; a 5% increase in customer retention, for instance, can raise a company's profit by anything between 25-75%.
Therefore, satisfied and loyal customers bring in huge benefit. A great customer service is an essential tool for promoting customer loyalty. You must have customers’ interest at heart while formulating your shipping and return policies. Customer service and response time should be flawless just as it should be easy for customers to have access to you.
Focus on Communication
The role communication plays in customer loyalty is very vital. Regular communication is a powerful tool for building customer loyalty. A carefully planned and deliberately communicated messages targeted at customers regularly, apart from keeping you in their mind, will also help create a lasting impression.
In the words of Elizabeth Arden ‘Repetition makes reputation and reputation make customers.’ Take advantage of social media, emails, phone contacts, newsletters and birthday messages to create your communication channels and bond with your customers. The bottom line is, if you offer great services, customers won't bat an eyelid to come back.
Cons
Managing data can be a herculean task to be able to gain a deeper understanding or insight into real customer-related data. Data requires a lot of analysis to unravel patterns, trend and customer behavior; and the funds also required to be able to gather this data could sometimes be a huge cost.
Also, it is very tasking to state accurately where customer loyalty comes from on the strength of data available to you. A customer could be misjudged as loyal whereas he is just patronizing you because it is convenient for him to do so at the time.
Conclusion
The benefits of having loyal customers are quite innumerable. Any business to succeed in the economic space must intentionally create a bond that goes beyond transactional relationships.
A well-managed customer base is no doubt a huge asset, but it requires skills to build.