Whilst it's important to attract new customers to your business, it's also just as important - if not more important - to retain your loyal customers who have been doing business with you for a long time. In this blog, we cover everything that you need to know about this powerful strategy, whilst also discussing some of the benefits it holds for your business and how you can achieve it.
What Is Customer Loyalty?
To put it simply, customer loyalty is a customer's willingness to repeatedly choose one company's products and services over the competitors in the same market. Typically, they aren't easily persuaded by price, and they would rather benefit from the great service from their chosen brand.
These customers will continue to return to your company if the business has consistently exceeded the needs of the customers - helping to earn their trust to begin with. These customer relationships need to be nurtured unless you're willing to have them move to your competitors. The most successful businesses usually invest in their customers loyalty, which keeps them coming back for more.
Brands that can figure out the customer loyalty code do so by listening to their customers, respond to all their needs and use first party data to continually find ways to add value to their customers' lives.
Why Is Customer Loyalty So Important?
Customer loyalty is about a person's willingness to interact with and buy from specific companies on an ongoing basis. If you're able to create a memorable, and positive experience for your customers, you're going to increase the chances of them not only returning but they will be willing to spend more per purchase.
In recent research, the probability of selling to an existing customer is 60-70% more likely, in comparison to a 5-20% probability of selling to a brand new customer. This proves that a customer is more likely to buy from you as they already have a relationship with your brand.
Your loyal customers are your best customers, and they significantly contribute towards your profits. These customers are wanting to spend more of their time with your brand, whilst going to great lengths to do business with you - this proves that loyal customers are simply more valuable, and are worth putting effort into to keep around.
The Benefits of Customer Loyalty:
Brand Advocates: If you work on customer loyalty, your audience won't just keep returning - they'll most likely bring their friends and family along with them.
From relevant online engagements to high quality products with positive customer service interactions, if you can create positive experiences for your customers, they'll spread the word through word-of-mouth marketing.
People usually trust recommendations from friends and family over the online reviews, and these brand advocates hold powerful potential to help you reach new customer bases and attract buyers from outside of your typical marketing reach - this traffic will convert much faster than non-referral audiences.
Valuable Feedback: A business can only improve their offerings if they collect valuable feedback from customers to find out what they're doing well and uncover the things that they could improve on.
A great way to gain valuable feedback is to create surveys for your existing customers to find out how satisfied they are with your business. Loyal customers are a lot more likely to take the time to fill out your surveys as they're invested in your brand - think of these customers as the ones who want your business to improve and are willing to help.
Your long-term customers are also able to give more of an insight into what works for your business and what doesn't, since they've been around for longer - their feedback is more valuable than a brand-new customer.
Forecast Accuracy: Having loyal customers, you'll be able to make more accurate sales forecasts. This is one of the biggest challenges that any FMCG brand could face when starting out, as there is simply not enough data to accurately predict how many people will end up paying for your products.
Once you're able to establish your loyal customer base, it will be much easier to collect your data, whilst measuring behavioural patterns of the returning customers and their repetitive habits.
How To Build & Maintain Customer Loyalty:
Strengthen Your Customer Service - Customers are loyal to you and your business when they know they can turn to you for help with any questions or problems they may have, and your products and services can be the solution to their needs.
If you want to offer this service to your customers, you could set up a customer service email address, or if your business has the capacity and availability for it, a live chat tool is another great option. Ensuring that you have designated employees to respond to enquiries within a specified time frame will benefit your company and brand drastically. If consumers are in need of help, they will be expecting informed and fast responses - not having this can put you at risk with your competitors.
Loyalty Rewards Scheme - Some business may experience a degree of customer loyalty without investing any effort, but you can also attract new customers and strengthen the relationship with existing customers by implementing a rewards scheme. You can offer incentives for customers to return and purchase your products or services, whether that's future discounts or even free items after spending a certain amount - they will really appreciate the generosity.
Hire Employees Who Care - When you hire employees, you should consider hiring someone who wants to prioritise attending to your customers, as this can further build customer relationships - it's also a good idea to hire someone with similar values to yourself, the company and even the rest of the team.
Know Your Customers - To cultivate customer loyalty, customers want to feel that your business is willing to take the time to get to know who they are. It's great to learn their name, desires, and of course their buying habits.
You need to value your customers beyond what they're willing to spend. Make a point to send them personalised emails, this could be an annual birthday email with a one-time discount code. You could also make personalised product recommendations that are based off their previous buying history or send them a reminder to purchase the item before it runs out.
Customers are more likely to buy from a company if they offer a tailored experience. There is no 'one-size-fits-all' when it comes down to customer engagement - so you need to ensure that your interactions are unique to them, whilst taking into consideration their personal experiences.
It's always important to consider your loyal customers, especially during these uncertain times. A successful business balances attracting new customers whilst providing great quality customer service to their existing clients.
A great starting point is to feel motivated to spend time on these customers and actively promote more loyalty. This is something you can adopt if you go about it the right way, and with the tips we mentioned above, it's definitely a great place to start for any business.