5 Ways To Build Customer Loyalty For Long-Term Growth
Getting Your Customers On Your Side
Regular customers come and go, but loyal ones stay. Customer loyalty measures the likelihood of a customer doing business with a brand over an extended period. The more reliable a customer is, the stronger the emotional bond and willingness to interact and make repeat purchases.
A natural affinity and trust develop when a customer has a good experience, eventually becoming a form of loyalty. When successfully nurtured, loyal customers can be depended on to make frequent purchases, use the products they buy, and engage in more profound ways with a brand.
Characteristics Of Customer Loyalty
The traits of a devoted customer include the following:
- Not easily influenced by availability or pricing
- Willingness to pay a premium for familiar products and services
- Do not actively seek out new vendors or try out competitor offerings
- Are more likely to recommend the brand to their family and friends
- Open to additional products or services offered by the brand
- Forgiving when problems arise with the brand
- Often provides honest feedback
Do you have loyal customers that meet these criteria? Try to look at the customers who support you the most and see who fits the description. For example, there are many consumer brands that people love, such as Apple, Coca-Cola, and Nike. Customers will line up for long hours and pay almost anything for the products and services they enjoy. For B2B, some businesses will only use products and services from brands like Microsoft, Cisco, and FedEx. These brands have become ingrained in how businesses run day-to-day, and whole processes are designed to optimize their integration.
What Kind Of Loyal Customers Exist?
There are different levels of customer loyalty. Not all loyal customers are the same. There are 4 main categories of loyal customers, each with different reasonings why they love a brand:
The Contented Customer
These customers enjoy using a brand’s goods and services. They have never needed to complain and always come back for more. But the contented customer can still be lured away with small incentives, such as a better offering or savings when problems arise.
The Benefits-seeking Customer
These customers keep a brand on their favorites list for the best benefits. They look at factors like cost savings, purchase convenience, and loyalty programs. Another factor benefit-seeking customers consider is the possible high switching costs of going to another brand. When switching costs and benefits shrink, they may switch to a better deal.
The Service-seeking Customer
Many customers are drawn to certain brands for the level of services provided rather than the products themselves. Personal attention, ease of service, customizability, and extra care can play a significant role in being a customer’s favorite. Providing these customers with lots of digital and in-person attention gives them the feeling that they are cared for. When the brand is not engaging with these costumes, they may fulfill their attention cravings elsewhere.
The Loyal Supporter Customer
Customers who actively promote a brand to their friends and family are the highest level of customer loyalty. They buy and use a brand’s products and services regularly and will actively recommend others to do the same. As a result, these customers are great for business, sales, and marketing. Often only a significant disappointing change or event would cause these loyal supporters to switch from their beloved brands.
4 Reasons Why Brands Need Customer Loyalty
So, customers need great brands to buy from, but why do brands need loyal customers? The simple answer is profits.
These are 4 profit-related factors in favor of building customer loyalty:
- Returning consumers spend more money than new ones. They have significantly greater average order values, which grow throughout their relationship with a brand.
- Loyal customers have higher conversion rates, which equals more sales with less effort.
- Loyal customers generate higher profits as they buy more, at higher profit margins, and more frequently.
- Keeping an existing customer is also less expensive than finding a new one, including customer acquisition, success, and support requirements.
5 Ways To Build Customer Loyalty For Long-Term Growth
Customer loyalty doesn’t happen naturally; maintaining it requires conscious effort and active management. Loyal customers, especially those at the lower end of the loyalty spectrum, can be lured away if brands do not stay diligent and protect their customers from competitors.
Here are 5 methods a brand can use to engage and build loyalty within its customer base:
Gather and know as much as you can about your customers. A better picture of customer habits and personalities can be formed through surveys, sales notes, and customer support calls. With long-term customer information and history, a brand can personalize its communications and tailor its offerings to match customer preferences.
Related Link: 9 Steps To Building A Customer Journey Map and 3 Tips To Make It Great
Reward Customer Loyalty
Through loyalty programs such as rebates, discounts, additional services, etc., customers can feel rewarded and cared for by the brand. Every small reward shows that the business cares, and the customer can feel they are being treated differently from the rest.
Related Link: Customer Retention Strategies For Practical Profitability
Having multiple ways customers can engage with your brand highly reinforces the message that they are there and actively listening. For example, public forms and social media are great ways for customers to connect with a brand and share their thoughts, complaints, and successes.
Related Link: Applying Viewabo to the 7 P’s of Customer Support
Enhance Support Services
Similar to high levels of engagement, providing excellent support services helps engage customers and keep customers from leaving. Offer direct paths to customer services and individualized help such as email, phone, video, chat, and in-person support services. The easier it is to reach, the more content customers feel with the brand.
Related Link: Top 10 Tips To Improving Your Customer Service Training in 2022
Highlight Customer Success Stories
Your marketing communications can be used to point out loyal customers and what they have achieved with your offerings. Through case studies, social media call-outs, VIP events, and awards ceremonies, loyal customers can shine in the spotlight for their dedication to your brand.
How To Measure Customer Loyalty Changes?
After making efforts to grow customer loyalty, the next thing a brand needs to do is measure if it worked. There are two leading indicators of a growing customer loyalty base:
The first is a higher customer lifetime value (CLTV). This is the lifetime value of a customer to a company calculated by finding the sum of all consumer spending over time. A growing CLTV is a reliable sign of high customer loyalty.
More on CLTV: The Why, What, And How of Customer Lifetime Value
The second indicator of growing customer loyalty is a decreasing customer churn rate. Customer churn is when a customer leaves and is calculated by dividing the total number of customers at the beginning of a period by the percentage of customers lost. An ever-shrinking churn rate shows that customers are staying longer with a business.
A brand can see the impact of its customer loyalty-building programs from these two factors. Of course, customer loyalty is not developed overnight, but if done successfully, you will see the effects on sales and the whole organization’s brand power over time.