Building customer loyalty is an ongoing challenge for most companies. Whether your organization is a small business or a multinational organization, your customer retention program plays a vital role in your success.
While it’s important to attract new customers, it’s equally important to retain the customers you already have. Repeat customers spend, on average, 67% more than new customers. Client loyalty is essential. So what is customer loyalty all about, and how can you build a successful customer retention program?
What is customer loyalty?
Customer loyalty is an existing customer’s willingness to do repeat business with your organization. A loyal customer returns to you time and again and chooses you over your competition. Loyal customers are more likely to act as brand ambassadors for your company and are willing to recommend you to their friends and family.
How to retain customers
Customer loyalty doesn’t happen overnight. It’s the result of a wide range of variables, including your product’s quality, brand message, customer service, and consistently positive experiences. When you’re building customer loyalty, you’re cultivating a long-term relationship, which doesn’t happen overnight. Fortunately, most of the steps and strategies used to create customer loyalty can be broken down into simple steps that build long-lasting relationships when practiced consistently.
Be selective when building brand relationships
Building “brand relationships” has been the focus of marketing departments around the world in recent years. However, it turns out that notion was, to some degree, wishful thinking on the part of the business world. According to the Harvard Business Review, only 23% of customers want a relationship with a brand.
Does this mean building brand relationships is pointless? Not exactly. It suggests you’ll get your greatest ROI from focusing your brand relationship building on the 23% of your customer base that wants such interaction. For the remaining 77%, focus on practical issues like discounts and special offers. Give them what they need without pushing them into relationships they don’t want.
Shared values are vital
According to the same Harvard Business Review, 64% of customers who say they had a relationship with a brand cited a common set of values as the primary reason for continuing the relationship. People have firmly-held beliefs and values and prefer to do business with companies that complement those values. If, for instance, your company is committed to sustainability — and more importantly can demonstrate that commitment — your brand will resonate with eco-conscious customers.
Your brand’s values should drive your social media presence, marketing campaigns, and product development. Make it easy for people to see and understand your values. A well-written About Us page can do wonders for showing people what you believe and why, as can your social media profiles. Just be sure you walk the talk. Customers can quickly tell when a business doesn’t act according to its values and will look for brands that do.
Be transparent with your product
One of the fastest ways to build customer loyalty is to deliver a high-quality, reliable product or service that improves your customers’ lives. This is the foundation on which your customer retention program is built. Without it, you’ll never improve customer loyalty. Ways to reinforce the quality of your product include:
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Making all product descriptions, photos, and videos of your product as realistic as possible. Make sure customers know exactly what they’re getting, what it looks like, what it does, and what the price is.
- Have clear store policies outlining return and shipping policies, and stand by those policies.
- Include value-added content such as how-to videos, live customer support, and FAQs.
- Respond to all customer questions, complaints, or inquiries promptly. Better yet, overdeliver. If your policies say you’ll respond to inquiries within 24 hours, get back to the customer in 12 hours instead.
- Don’t be afraid to ask for more time to answer a question or resolve an issue. Customers value honesty over excuses.
Create an online community
A social media presence is essential for modern business. It creates an environment where you can directly interact with your customers, sharing stories, providing behind-the-scenes glimpses of your business and employees in action. Your social media presence helps build your brand identity, demonstrate your values, and build brand relationships with that segment of your customer base that wants a relationship.
Equally importantly, your social media profiles offer locations where customers can interact with each other. Customers can see how you resolve issues, read customer reviews and testimonials, and ask each other questions. Customers who may have little interest in brand relationships may be receptive to chatting and talking to other customers, creating positive experiences that indirectly improve customer retention.
Reward customer loyalty
Communication, trust, and high-quality products all make building customer loyalty possible. Rewarding long-time customers adds yet another level to your customer retention program. Rewards may be small tangible items, such as personalized magnets, stickers, or calendars sent in the mail, or opportunities like discounts and early access to new products for those who sign up for your email newsletter. Larger ticket items, such as quality outerwear, can be used as prizes for contests aimed at your loyal customer base.
Many companies include little extras when they ship products to customers. If possible, choose items that add value to your products. For example, a stationary company might include a customized pen, while a company specializing in home gym equipment might include an athletic shirt with the purchase of a weight machine.
Rewarding your customers doesn’t have the same impact on customer loyalty as high-quality service and prompt, friendly customer service. Instead, customized gifts are a thank-you that keeps your brand in the customer’s thoughts while increasing brand awareness among the general public. Keep your loyal customers happy, and when someone asks them about the tote bag you sent as a thank you, they’re likely to sing your praises, increasing your chances of gaining a new customer to impress.