They like you. They really, really like you. That’s what customer loyalty is all about: building an army of dedicated, engaged, and passionate patrons who love your business. But why is customer loyalty so important? Isn’t a sale just a sale? No. Loyal customers are the ultimate prize because they generate most of your revenue, serve as spokespeople for your business, help your company improve products and services, and so much more. Learn about the value of customer loyalty and how you can strengthen your business by getting customers on your side.
5 Ways Customer Loyalty Impacts Your Business
1. Loyal Customers Are Your Bread and Butter
Have you heard of the 80/20 ratio? Studies show that 80 percent of your business comes from 20 percent of your customers. That metric demonstrates the power of customer loyalty; a small group of devoted customers essentially makes or breaks your bottom line.
2. Loyal Customers Provide Word of Mouth Marketing
Loyal customers tell their friends, families, and networks about their favorite companies—in person an online. As you know, a direct referral or testimonial from peer to peer is as good as gold. Research reveals that 90 percent of consumers look for online reviews of a company before doing business with it, and nearly three-quarters of people say a positive review makes them trust a local business more. When you have a large and loyal customer base, they’ll help build trust and credibility with strangers and bring in more business.
3. Loyal Customers Give Honest and Constructive Feedback
Loyal customers are engaged customers—willing to respond to surveys, reply to posts on social media, and give your business open and honest feedback. Listen to them! Allegiant consumers are familiar with the perks and shortcomings of your entire company—from products or services to customer experience. Consider your loyal customers a focus group, or feedback loop, that’s willing to divulge invaluable insights for free.
4. Loyal Customers Defend Your Brand
Crises happen to every company—big and small. If your business ever finds itself in hot water, it’s easier to navigate your way out of an issue with the help of a loyal customer base that comes to your defense. Since nearly 70 percent of people don’t do business with a company after finding at least four negative reviews or articles online, an army of positivity will help counteract naysayers to mitigate the fallout.
5. Loyal Customers Provide a Competitive Edge
Many companies can sell products and services, but not all can attract and retain loyal customers. Brand enthusiasts set your business apart from the competition for all the reasons above: your social media followings will be larger and more engaged; your loyal customers will give you ideas about how you can improve your business; they’ll also help attract new customers so you gain a larger market share.
3 Reasons Your Business Isn’t Retaining Customers And How to Fix It
Don’t get discouraged if you read this article and realize you don’t have the customer loyalty you desire. Instead, diagnose the issue(s) to determine the best course of action to build brand allegiance and affinity. Here are some common problems that hinder customer loyalty and how to remedy these issues.
1. Customer Issues Go Unresolved
When customers have negative experiences over and over again, they disappear quicker than employees from the office on a Friday. Soberingly still, almost one-third of loyal customers leave a brand after one bad experience. If you receive negative feedback on your customer service, products or services, or marketing materials, address it immediately. It doesn’t take long for a snowball effect to take place and stymie your customer loyalty goals.
2. You Don’t Engage Your Customers
When do customers become loyal? When they feel connected and invested in your brand. That means you need to develop a relationship with consumers by engaging them in conversation. Podium offers a Messaging Platform to communicate with customers at every touchpoint. You can also utilize your social media channels to respond to comments, engage with followers by liking their posts and commenting, and/or acknowledge their thoughts, wants, needs, and advice. Keep communication channels open to assemble the building blocks to strong customer loyalty.
3. Your Brand Doesn’t Deliver What Customers Want and Need
Supply and demand is all about finding a problem and delivering a solution. If you don’t improve the lives of your customers in a unique way—an experience they can’t find anywhere else—they won’t become loyal to your business. Conduct market research, use surveys for feedback, and do a full strategy audit to see where your business can improve. Once you cross your t’s and dot your i’s, more customers will notice the difference and flock to your side.
How to Build Customer Loyalty
There are a number of other ways to improve customer loyalty and increase brand affinity. Start with the following four tips.
1. Use Digital Reputation Management
Give loyal customers a place to rave about your company with Podium’s Reviews. Our reputation management service lets you invite customers to leave reviews, respond to consumers in one place, and analyze what people have to say about your business. When others see positive reviews about your company, they’ll jump on your bandwagon and embark on their journey to loyalty.
2. Leverage Customer Feedback and Insights
Show customers you value their feedback by incorporating it into your business. If customers complain about a similar issue or customer service, fix it. If customers ask for more of something, deliver. Listen and respond. It’ll help you customer loyalty tremendously – especially in hotels and similar industries where customer satisfaction is key.
3. Make Customer Service and Experience a Priority
These days, people expect nothing less than stellar customer service and experience. However, research shows companies still have a ways to go in this department. For instance, almost 60 percent of brands say its products are its value proposition. Only 10 percent identify a deep emotional connection to customers as a value prop. This means there’s room to become a leader in customer experience and win with customer loyalty.
You may need to address larger infrastructural issues. First, hone your sales funnel. The same study shows brands miss out on communication with customers at vital touchpoints like the engagement, awareness, and acquisition stages. Also, the CEO is most often times in charge of the strategy for customer experience, but this important task is often disorganized in-house.
Create a task force to address your customer experience goals and shortcomings so you can create a plan to improve it—like meeting your customers where they are on social media or messaging platforms or creating loyalty programs. The bottom line? Whatever you do, the more effort you put into putting your customer first, the more loyal they’ll become.
4. Evolve With Your Customers
Your customers may be loyal today but gone tomorrow if you stagnate. Always evolve alongside your customers’ preferences. This may mean expanding your presence to new social networks or switching to SMS texting rather than traditional email marketing. It may involve adding Webchat functionality to your website. Find out what your consumers love and give them more of it.
Loyalty means everything in relationships—and in business. Customer loyalty is a great gauge to see how people feel about your company. The more loyal supporters, the better you’re doing in your industry and across the board.