Customer loyalty can be very important to your own business’ longevity, but are you doing all that you can to maintain and expand it? If providing this type of experience is something that’s important to you being a business owner, then we want to remind you of the benefits. The most obvious upside is the fact that repeat customers spend up to 67% more than their new counterparts. Additionally, if someone becomes an existing customer who has been with your business since the beginning, they can be acquired by one of your competitors for ten times what they’re worth – which means losing an existing consumer will cost 10x more than gaining a new one.
What do you mean by customer loyalty?
It’s important to note that all customers aren’t equal. This means that all types of customers don’t come with the same value toward your company’s bottom line. For one thing, it’s often necessary to build brand loyalty at the start since this makes everything easier over time in terms of maintaining profitability. Some new customers who become regular clients may not be so reliable because they tend not to afford you a lot in terms of revenue. Yet those hobbyists and people new to your product or service may attract repeat subscriptions if they keep coming back. The opposite is true as well – it’s worth noting that some people are likely to stop their subscriptions altogether by the end of their membership term or lose interest when something newer comes out, which can also work out very well for your business, depending on your goals as a company!
Importance of customer loyalty
The deeper the relationship consumers have with your brand the greater their loyalty will be to purchase it versus that of competitors. As a result, when they like what you’re doing they are willing to put your business in front of their friends and family because they like and trust you. In other words, when a brand has a loyal following customers will wait in line or purchase at fan meet-ups instead of buying from someone else.
Customer loyalty carry several benefits. These are some of the most obvious:
- Customer loyalty usually translates into higher sales for repeat customers.
There’s an old saying that your customers will always come back if you treat them well. Repeat business is the lifeblood of any small business. You see, existing customers tend to spend more money than new ones because they trust you and your products or services. This trust increases as time goes on, so existing customers typically become long-term allies in your corner who are also much happier to spread your brand name around because they feel like they’re part of something special!
- Customers who are loyal are more likely to convert.
Loyal customers are incredibly valuable to your business and much more so than a new customer. Existing customers have an average conversion rate of between 60% and 70%, while new customers might stir up around 5% to 20%. This means that existing customers hold the power, and they depend on the quality of your products. Newly acquired clients will stick by you if your product is reasonably priced or offer excellent value. If it’s neither, then they’ll quickly leave, just as soon as a competitor comes along offering something better.
- Profits increase when customers are loyal
Having a loyal customer base can get a brand far and above their competitors’ when it comes to marketing. Keep in mind that businesses that don’t turn over more than 5% of their clientele are just costing themselves money because they could be retaining 25-95% additional profits if they were somehow more skilled at retaining customers.
How to measure customer loyalty?
There are many ways to measure customer loyalty, but the most important thing is really working out why they’re purchasing your products and services in the first place. If people aren’t buying, it’s probably because they see no value in what you have to offer. How often do they buy? Are they being consistent with their purchases or are there gaps in time when purchases slow down or stop altogether? It’s vital that you address these issues early on before your customers begin to waver and leave for good.
When it comes to measuring customer loyalty, every business will have different metrics depending on the type of business.
There are several ways you can measure customer satisfaction. You can set up surveys to find out how customers feel about your product or direct them to a website asking for specific feedback on certain aspects of your site or business. Another great way to gauge customer satisfaction is through online reviews and ratings. Sometimes the best reviews are the ones that give specific details about what made a customer happy or unhappy, but this method of gathering information can be more time consuming than others. Each of these methods have different advantages, so it’s important to identify which one works best for your company and its goals
There are various ways in which product managers can go about ascertaining customers’ satisfaction levels. Having said that, you may want to consider starting off with an email or message of some kind where you can get a feel for the overall effectiveness of your product in general and how it compares to that of similar products out there. You could then follow this up with an interview if the feedback on features is either extremely positive or extremely negative.
How to gain customer loyalty?
When you’re trying to figure out how to build customer loyalty, it might seem like a lot of strategizing and brainstorming is necessary. But how can you determine if what you’re thinking about doing for your target market is really going to work? One way to find out is by generating ideas based on real data.
- Improve your customer experience
Customer service is crucial to the future growth of any business. A study in 2021 showed that 86% of customers were willing to pay more for great customer service.
Customers remember whether they’ve been taken care of or not and so you have to be careful not to cut any corners. If a customer is unhappy with your services, it could reflect negatively on your company’s brand and affect sales in either case. Moreover, if they’re happy with what you provide then word will spread and bring new opportunities for business. It’s important that you stay loyal to your customers and that you listen to their feedback concerning what products and services will help them most because the last thing you want is for people to feel let down by something as simple as faulty goods or substandard service.
2. Email and customer contact forms
Data can tell you a lot about your customers, and there’s no better way for retailers to learn about their audiences than to ask and see what the numbers say! Whether you’re focused on selling to college students, young families, dog lovers or baby boomer retirees, knowing what your customer base appreciates will allow you to create even more value for them. After all, getting them excited about your products means that they’ll be more eager come back next time and make another purchase! If a customer can take advantage of really great deals during their routine shopping experience, then surely, they will become more excited to shop at retail locations again in the future.
Discounts can also help your customers save some money when they are buying something during otherwise slow times. For example, a movie theatre that offers $5 tickets on Tuesdays or a restaurant that gives a 10% discount to college students on Monday nights. These types of deals will ensure that people still choose to buy from you when you’re doing less business. This will help create a loyal customer base for your business because you are helping them save some money.
3. Connect in a deeper way
You can grow your relationships with your customers by inviting them to a place where they can interact with each other. As well as that, people from your team should attend and speak at in-person events to continue fostering their relationship with their audience. Communities allow these types of interactions to happen, and this is an easy way for you to accomplish all of that. Plus, providing guides or additional resources or support will help you maintain those relationships and make sure the community stays healthy and active!
4. Protect Your Market Share
Competitors are always on the watch for clients who like what you offer. And just as you spy on them and their potential clientele, they do the same to you; unfortunately, it means that even if someone has purchased services from yours once does not guarantee that couldn’t be your competition tomorrow or in fact go to one of your former clients next time.
If you can establish a relationship with them and become their trusted business partner, your long-term chances of retaining customers increases significantly. Selling to one customer is hard enough – having them purchase from you repeatedly gets ever more difficult. When they no longer need what you provide, many will simply go elsewhere instead of trying to work out another way. To retain their business more easily, make sure that your product or service comes back in some way! People with a good sense of what your clientele cares about know how to win customers most easily – so be on the lookout for any potential issues or opportunities for improvement and aim to resolve those issues as soon as possible so that everyone wins!
5. Ask for feedback
Asking your customers for feedback is a surefire way to increase customer loyalty. We have found that including a ratings box or an NPS survey with every support email you send out or in the tickets you forward to your support team can help you gather more critical insights into how satisfied your customers are with specific interactions they have had with your company. You can also get invaluable insight into how your customers experience interacting with your team on any given day (or complaint-wise if things haven’t gone smoothly). Ask regularly!
Keeping customers happy and more importantly adding on to your list of raving fans goes a long way in can benefit your business via word-of-mouth. The more you engage with customers directly, the more they will feel comfortable enough to support your ambitions and will talk positively about you to anyone they know who has a need that may align with your company’s services. Done right, this strategy can lead to exponential growth – even at start-up levels!
Are you also having trouble gaining customer loyalty? Reach out to us at www.philomathresearch.com