How much of a difference does customer loyalty make?
Customer loyalty is hugely important, because you can rely on loyal customers to do business with you, regardless of macroeconomic circumstances. For example, during the COVID-19 pandemic, people rallied behind their favourite small businesses and made an effort to support them in any way possible, so they wouldn’t shut down given the massive economic downturn. On a smaller scale, if your business is ever beset by disaster (such as a flood or fire), it’s often your most loyal customers who will rally behind you and support your business in getting back on its feet. Small businesses are often the heart and soul of a community, and people feel good about supporting businesses that treat them well. In some cases, small businesses have been in their communities for many generations and have had the privilege of serving entire families. This is the sort of relationship all businesses should strive to have with their customers. All things considered, it is vital that you do everything in your power to build customer loyalty.
Creating customer loyalty
There are plenty of ways to turn everyday customers into loyal ones, and the approach you should take will depend on the business you’re in. Offering good customer service, and hiring employees with customer service skills and experience, will go a long way toward laying the groundwork of customer loyalty. Customers who feel taken care of will respond by giving you repeat business. Good customer service can also help with word-of-mouth marketing and reputation-building, since happy customers will often tell their friends and family if they ask for recommendations.
Another way to build customer loyalty is to give your customers a feeling of exclusivity or membership. Do you offer them something they can’t get anywhere else, such as selection and/or service that’s unique to your company? Don’t be afraid to boast about it and draw attention to it in your advertising, especially on social media. Building hype around your company and a feeling that those who aren’t customers are missing out will build affinity among your existing customers, while attracting new customers who want to be part of what you’re offering.
Maintaining customer loyalty
Once you have loyal customers, it’s important that you don’t lose sight of their loyalty or take it for granted. Customer relationship management is therefore an important tool your business can use to maintain customer loyalty. When done properly, customer relationship management can spot opportunities to sell products or services your customers want or need, at the right time. For example, if you sell a car to a customer, reaching out with an offer on winter tires when the weather starts getting cold, or offering a detailing package at the end of slush season can drive sales, while also giving customers something they likely want to purchase anyway. It can give the perception that you care about them, and that you are attuned to their needs. Knowing details about a customer, such as their birthday or whether they are a parent, can add a personal touch to your communications with them and can allow you to tailor your offers or marketing to them accordingly.
Offering customer incentives can also help maintain loyalty, especially if the incentives involve deals on in-demand items or services. Many businesses offer existing customers exclusive deals and offers or even choose to extend the warranty on certain products and services for their most loyal customers. Sometimes, companies will create a referral program where loyal customers can earn money or other incentives by referring friends or family. This not only makes existing customers happier but also extends your customer base and creates a sort of contagion where people continuously refer new customers.
The benefits of customer loyalty
Having a solid base of loyal customers will lead to a vastly improved reputation for your company. They are more likely to leave positive reviews and recommend your company to others, which can in turn attract new customers, build trust and differentiate you from your competitors. Businesses with a loyal customer base are better equipped to withstand market fluctuations and economic downturns. Loyal customers provide a stable revenue source, allowing your business to focus on strategic growth rather than immediate survival. Customer loyalty is self-perpetuating as the profit that repeat business brings can be invested in innovation, improving operations and adapting to changing market conditions, which will result in more business, which will give you the opportunity to earn even more repeat customers. Repeat this often enough, and you’ll be set for long-term success.
Loyal customers are also one of your business’ biggest assets, because they can provide you with valuable insights into your products, services and overall customer experience. Their feedback can help guide improvements in operations and product development, while helping you to better understand customer needs and preferences. By focusing on retaining and nurturing loyal customers, you can help build a solid foundation for sustained growth, since loyal customers contribute to stable revenue, advocating for your brand, and ultimately giving you a competitive advantage.
