Haven’t you heard the business mantra “Customer is king?” It doesn’t matter which industry you might be in, no customer means no sales. Businesses thrive on customers. This is not just from a monetary point of view. There is a lot more which goes into maintaining and creating new customers. Customer loyalty does not happen easily.
A business begins with the purpose of serving others and gaining profit while doing so. The customer is your market. They build your company’s reputation and they also hold the power to ruin it. Not a single company works without knowing its customer. You can only deliver the right product or service when you have understood your target audience.
People are different. Each one has a different opinion and preference. It is never easy for a company to understand its audience fully well. You need to take your time to learn about them. You also need information and analytics. Making customers your priority helps in winning their loyalty. Customer loyalty is a key that can either make or break your business.
In pochi punti:
What Is It?
We often hear the term customer loyalty. What is it really though? In the simplest way possible, it is the loyalty of your customer toward your brand. It is When a Starbucks customer refuses to buy a coffee elsewhere because he only prefers Starbucks. It is The continuous emotional relationship between your company and the customer. A customer’s good experience and trust with your brand give rise to loyalty.
Your customer must be willing to not engage with your competitors. Your brand ethos must be able to convince them. They should find the need to make repeat purchases from solely your company. Such customers are a company’s biggest strength. They are your most interactive group of audience. They are also your most cost-effective marketers.
There are several kinds of loyal customers. A customer might be loyal to you for plenty of reasons. It could be because your product satisfied them. It could also be because they find your prices the best. Some customers stay with you because it is convenient while some because of the freebies. A truly loyal customer stays with you for all these reasons and without them too.
Customer loyalty is exactly what leads to retention. That is the capability of a company to keep old customers alongside creating new ones. As long as your customer is loyal to you, you can expect to stick with your company. In fact, as per statistics, 57% of customers spend more on companies they are loyal to. Each brand has its own designed customer loyalty program. These are strategies that help bring repeat purchases. Offers, rewards and discounts often play a big role. As per studies, 75% of customers favour brands which offer reward programs.
Customer Loyalty Benefits
Customer loyalty helps build an emotional connection with customers. Here are some of the benefits of customer loyalty:
- Revenue: Emotions drive behaviour. Therefore, loyalty is the best way to make customers buy your products. The probability of you being able to sell to a repeat customer is about 70%. On the other hand, the probability to do so with a new customer is a mere 5-20%. More purchases mean more cash flow. More cash flow equals more revenue.
- Brand representatives: Happy customers always like to spread the word. You need not ask or persuade these customers to do so. Customer loyalty is enough to do the work. Haven’t you ever forced your friend to go to your favourite brand? Repeat customers help bring new customers. They drive your sales through word-of-mouth marketing. The best part about this process is that it is natural. There is no incentive or motive involved.
- Quality Feedback: Nowadays, companies focus a lot on customer experience. They all want to provide the best user experience and therefore believe in feedback. So, customer surveys and feedback forms are frequently sent. Not every customer will spare their time to fill these forms. It is often your loyal customers who tend to do so. This is because they trust your company and want to help you improve. Therefore, customer loyalty helps you a lot in receiving honest and quality feedback.
- Customer acquisition: Bringing in new customers is not easy. It is an expensive and tiring task. Although, having good customer retention helps you bring in new customers too. You figure out ways to improve as well as see organic growth in new customers.
- Competition: Customer loyalty brings repeat business. This makes your competitors lose out on revenue.
Best Strategies for Customer Loyalty
Companies use several ways to create customer loyalty. It is not only important to build this loyalty but also to maintain it. Here are some strategies that help build and maintain customer loyalty:
- Discounts: We all love a good discount! It is important for a company to know when to give a discount. Doing so because they purchase regularly from you or because it is a seasonal sale. All these tactics help in creating a loyal customer base.
- Referrals: Referrals are an interesting idea to promote sales. You might have seen your friends taking part in a “refer a friend” program. Customers get involved because there is an incentive involved.
- Leverage data: Data has become so important in business nowadays. Mapping your customer data and any previous interactions helps you understand the customer. Once you figure out what the customer likes about your business, you work on that.
- Personalisation: Customisation is so in trend right now. Every customer wants to feel special and unique. No one wants a mass email. Therefore, adding a personal touch to the way you market and sell goes a long way. This is all made easy today due to CRM systems. Personalisation can also work while giving offers and discounts.
- Human touch: We all have interacted with a bot by now. None of us enjoys the experience. In fact, 79% of customers find human interaction important in their experience. It is way easier to get your queries solved over customer service calls. Also, always speak your customer’s language. Don’t be so formal, interact and make them feel understood. Also, it is good to have employees who speak different languages on your team.
- Engage: Customers love a brand that makes their customers engage with their content. It could be through hosting events or even social media!
Top 5 Customer Loyalty Examples
Loyalty programs are an effective tactic to drive sales. Some companies go a step further. Here are a few excellent customer loyalty programs:
- The Starbucks Rewards program
This program made its customers download the Starbucks app to gain loyalty stars. All you had to do was pay using the app. Once done, you would earn stars for it. You can use these stars to redeem free drinks or even Starbucks merch. This was a great way to drive repeat purchases as well as collect customer data.
- Sephora Beauty Insider
This is a very popular program. This is a point-based reward program. After earning points on every purchase, you could use them at their rewards bazaar. Shoppers can redeem their earned points at checkout and buy beauty products.
- Amazon Prime
Prime’s premium membership comes with a lot of benefits. This includes free 2-day shipping. This membership really helps bring in a lot of revenue from shopping. Prime users spend 4x more than other amazon users.
Designer Shoe Warehouse also has a VIP loyalty program like any other popular brand. It rewards customers with points that they can redeem on specific rewards. Their program doesn’t need a physical card. Their system easily recognises customers with their basic information. In 2017, they also began a personal email marketing campaign to inform customers about their points.
Hyatt has a 5-tier program. Members get access to member-only offers. One could earn points by spending nights at their hotel and using their services. You can redeem these Hyatt points in different ways. Their loyalty program is open to everyone.
Long ago, customer loyalty was heavily based on convenience and product satisfaction. We bought locally from the store closest to us. Least bothered about customer experience and offers. Today, that isn’t the case. 85% of shoppers begin their shopping search on google. Using just a few clicks, you can check different stores and compare several prices online. Therefore, holding customer loyalty becomes difficult as competition continues to increase.
Although, in the past few years, these reward and loyalty programs have proved effective. These tactics have been very helpful in not only boosting sales but also keeping customers. They have also had a huge role in increasing customer lifetime value. Therefore, brands need to keep investing in building customer loyalty. Brands need to make most of the data and feedback available to them. Long gone are the days when companies used to solely compete over price. World business is at a different stage now.
Do you think customer loyalty still exists? What are some brands you are loyal to? Let us know in the comments section below.