Do you want to build a successful business? Then you will need to prioritise customer loyalty.
Many studies have shown that loyal, engaged customers can help grow your business much faster than the most gifted sales and marketing teams.
Let’s discuss some easy and effective ways to build customer loyalty and ensure long-term success for your business.
What is customer loyalty and why is it important?
Customer loyalty is a customer’s readiness to repeatedly buy products from a company because they tend to trust it.
Loyalty isn’t a one-time event; it’s an ongoing positive relationship between a customer and a business that works to the advantage of both.
Building customer loyalty is one of the most important marketing strategies for your business because:
- Retaining existing customers is cheaper than acquiring new ones
- Repeat customers spend much more than new customers
- Loyal customers lead to higher conversion rates
- Loyal customers boost profits
- Engaged and loyal customers enable effective business planning
How to measure customer loyalty
There are four major metrics to determine customer loyalty. These include:
- Lifetime Value: Lifetime Value (LTV) refers to the total amount of money shoppers spend on a brand—from their first to their latest purchase. A LTV that continues to rise indicates loyalty.
- Churn rate: This refers to customers who opt out or disengage with the business. This metric is the percentage of customers lost based on the number of customers at the start within a specific timeline. Apart from the user churn rate, revenue churn helps to gauge how well (or not) the business is doing.
- Net Promoter Score: The Net Promoter Score or NSP estimates a customer’s willingness to tell others about the brand/product, which indicates the loyalty rate.
- Referrals: A business that runs a referral programme can measure how many new customers came in via recommendations. This allows tracking of new conversions along with loyal customers.
How to develop customer loyalty?
Business owners should do all it takes to build customer loyalty as this ensures a customer’s commitment to your brand.
Be it excellent customer service, matchless product selection, or any other way you differentiate yourself, it is important to make sure that you set yourself apart and ensure continued customer engagement.
Here are some ways you can earn and build customer loyalty for your business:
1. Improve your customer experience
All business owners know the relation between customer service and loyalty. Customer service was always important, but there’s no way you can neglect it in the time of social media.
A happy customer will recommend your business to friends and family; an unhappy one will make sure everyone in the vicinity knows about their experience.
Go above and beyond the call of duty for your customers. Ask for feedback, pay attention to what they are saying, identify any areas you can improve on, and put their feedback into practice.
Online reviews/recommendations or tags on social media channels are great places to respond to positive and negative customer feedback.
2. Offer a rewards programme
Extra perks have been used to reward customer loyalty for years. A reward system for the most dedicated customers is a great way to keep them coming back.
The simplest and probably the most popular loyalty programmes use a point system; customers earn loyalty points every time they buy from the brand.
Accumulated points earn them a reward, which could be discounts, freebies, gifts, and more.
3. Connect with your customers
Apart from gathering regular feedback from your customers—and acting on it, it is crucial to stay connected to them.
Regular communication with your customers keeps you fresh in their minds and allows you to convey important information.
Choose the best platform or method of communication—it could be email, phone, SMS, social media, or face-to-face communication.
Sending event-based emails can personalise communication and make your customer feel important. You can send out specific mails including newsletters, order placement confirmation, payment confirmation, and more—via a marketing automation service.
4. Create a community around your product/service
If possible, organise exclusive events, product reveals, sales, and happenings to make your customers feel they are part of an exclusive community.
It will tell your customers that the relationship is more than just about selling a product—it is about bringing value to their lives. It will compel your customers to return to your store time and again.
Use online channels to build loyalty
Going online can help you build loyalty by making it easy to interact with your customers.
Whether it is seeking their feedback, implementing a rewards programme, creating an online community, or more—a business website can ease the task of creating a loyal customer base.
Try Boost 360 today to build a business website, create a presence on social media, send newsletters, launch online shopping, and build stronger relationships with your customers to stay in profits and create value for both you and your clients.