Customers are the heart and soul of any business. Without them, many businesses would cease to exist. And yet getting them onside can prove costly, with the acquisition of one new customer costing five times more than retaining an existing customer.
Though acquiring new customers is a great way to increase revenue and achieve growth goals, it’s also one of the most difficult. In an increasingly competitive market, the strongest and most successful businesses are those that focus their attention on building customer loyalty.
What is customer loyalty and why do you need it?
Customer loyalty, in the simplest of terms, is when a customer gives a company repeat business over a period of time. With almost 50% of a company’s revenue generated from just 8% of their most loyal consumers, customer loyalty has the potential to enhance your business and help you to survive during tough times.
However, what many businesses fail to realize is that loyalty is a two-way street. To ask customers to continually invest in your business and support your growth, you must first make your customers feel valued and appreciated.
Showing appreciation: the key to customer loyalty
When it comes to people and relationships, showing appreciation can go a long way. Psychological studies show that appreciation can strengthen the bond between people, creating a meaningful connection and a positive relationship.
Business transactions are no different. By showing your appreciation for your customers, you bring a human element to your business that shows recognition for your customers and the role they play in your success.
Strong customer service experience
According to Microsoft’s Global State of Customer Service report, 58% of Americans will switch providers without hesitancy because of poor customer service alone. With statistics like these, there’s no doubting the importance of developing strong service strategies when bidding for the loyalty of your customers.
Providing exceptional service is a great way to show your appreciation. And all it takes is a little time and dedication to listening to your customers’ wants and needs. Engaging with your customers and listening and responding to their feedback in real-time is one of the best ways to make them feel appreciated.
Though good customer service management systems can be tricky to implement, having the tools in place to listen to your customers provides the perfect opportunity for you to improve your business. With these systems in place, you’ll have the tools needed to turn negative experiences into positive interactions, reviews, and repeat customers. It’s no secret customers love helping businesses they patronize and are keen to reward businesses that repeatedly value them.
Reward & loyalty schemes
Providing extra perks to your existing customers is one of the best and easiest ways to promote loyalty. There are many different bonus schemes and no one size fits all. Whether VIP programs or spend-based systems, businesses can benefit significantly from reward and loyalty schemes.
With a points program, your customers will receive points in exchange for how much they spend per transaction. These points accumulate over time and can be transferred into some form of reward whether that be a discount, voucher, or free product.
Coffee shops and supermarkets are the most obvious examples of businesses that use points-based reward programs. But these programs are by no means reserved for one type of business. A points-based program can benefit any e-commerce store.
Establishing a VIP system allows the customer to be a part of an exclusive group that receives perks that the average customer doesn’t. A VIP system is a great way to reward your most loyal customers with the best perks awarded to those with the longest loyalty.
While VIP systems work particularly well with clothing retailers and niches with cult followings, VIP systems can also work well for service providers such as coaches, teachers, and more.
Engage with your customer
Engaging with your customer is one of the best and most effective ways to retain customer loyalty. Thanks to the digital world, keeping an open dialogue with your customers is easier than ever before and can be achieved through a wide variety of forms including email marketing, social media, or advertisements.
Many businesses and brands engage with their customers through email marketing, whether that is by promoting a brand-new product or an exclusive sale. Another great way to engage with customers is to adopt a personalized marketing strategy. This can be done by collecting the customer’s data and distributing emails that include their name or celebrating their birthday with an exclusive birthday discount code.
By consistently engaging with your customer, you’ll establish a strong relationship that develops a sense of familiarity and demonstrates your appreciation.
Invest in customer loyalty now to maintain longevity
Loyalty is a two-way street and showing your appreciation through listening, and responding to, feedback is the best way to jumpstart killer customer satisfaction.
Following these tips will ensure a positive, memorable experience for your customers that results in spreading positive feedback and continuing to transact with your business. Ultimately, this will strengthen your relationship with the customer and your business as a whole.