Your customers are your business’s greatest assets, so retaining them should be your number one priority. Customer loyalty is vital for businesses to succeed and grow, they are the lifeblood of your business.
What is customer loyalty and why is it important
Customer loyalty is quite simply customers returning for repeat business with you. It is important because retaining customers is much cheaper than acquiring new ones so your existing customers should be your primary focus.
Acquiring a new customer can cost five times more than retaining an existing customer. Increasing customer retention by 5% can increase profits from 25-95%. The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new customer is 5-20%.
If you consistently offer great value and exceptional customer service your business will reap the rewards of customer retention. This will mean you have to spend less time and money acquiring new customers.
Here are some ways in which to foster customer loyalty:
1. Communicate with them regularly
Keep in touch with your customers. Let your them know about new products or updates. Ask for their feedback, this will help you to make improvements. If you are running a special offer let them know, this might incentivise them to buy again from you. If you haven’t heard from some customers for a while, reach out to them. It may not result in immediate sales, but it will keep you to the front of their minds.
2. Provide exceptional customer service
This is important for new and existing customers. It starts from the moment they first contact you. People have high expectations and those you disappoint will be quick to vote with their feet. Always get back to customers and prospects promptly, and if you have customer service representatives make sure they are well trained. One study showed that 89% of people thought that a quick response was vital when deciding who to buy from. And half would switch to a competing brand after poor customer service.
Exhibition stand contactor, Quadrant2Design, get over half of their business from repeat customers. MD Alan Jenkins said “We really pay attention to each individual customer and make sure they have a positive experience. If there are problems, we sort them out straight away without any issue. Many of our customers return to us time and time again which is a great feeling, we must be doing something right!”.
3. Use social media
Social media platforms are a great way to interact with your customers. Using them can enable you to show a human side to your business which will increase customer loyalty. Use them to get feedback from your customers and keep them informed about your business. Monitor your customers’ likes and interests and show the most loyal that you care about them. This will show that you listen to your customers which will make them more loyal.
4. Start a loyalty programme
Offer loyal customers rewards in the form of free products or discounts if they purchase a certain amount from you. Retailers, coffee shops and hairdressers all do this successfully. Loyalty programmes help your customers feel appreciated and offering rewards might give you the edge over your competitors when customers choose who to buy from.
5. Ask for feedback
Asking customers for feedback can help you improve your business as well as giving customers a sounding board. While no-one likes negative feedback, if there are areas where you could improve it’s good to know about them. Ask your customer service representative to share feedback, conduct customer satisfaction surveys and look at online reviews and comments. Showing that you care about customer feedback will increase customer loyalty.
6. Create an online community
Setting up a group on Facebook for customers to share tips, thoughts and feedback will foster loyalty. Having a user group can help engage customers and also provide you with feedback. Facebook groups are becoming increasingly popular with businesses for these purposes. They enable customers to connect with you and each other in an informal way. Encourage engagement by sending out information to group members and hosting events for them.
7. Get personal
Treat your most loyal customers as individuals and know them by name if possible. Most customers place as much value on the quality of your service – friendliness, comfort, and familiarity – as they do on the quality of your product. 70% of buying experiences are based on how the customer feels they are being treated. Make your business a friendly and accommodating partner in your customers’ eyes. Show appreciation with coupons, discounts and thank you emails.
8. Take responsibility
If you make a mistake or a customer receives a poor experience, own up to it and apologise. Things are bound to go wrong sometimes and how you handle it will affect whether the customer stays with you. Taking ownership of the situation and resolving it will go a long way to help.
Building up customer loyalty is essentially building relationships with your customers. Loyal customers are much more likely to buy again from you and it is cheaper to retain customers than seek new ones so it’s worth your while. Treating your most loyal customers as individuals, making sure their experience is positive and paying attention to feedback will all help foster a sense of loyalty.