You probably know that boosting sales and profits doesn’t necessarily translate to attracting new clients. Instead, it’s more about keeping your current customers.
According to a study by Bain & Company, raising client retention rates by only 5% can boost earnings by 25% to 95%.
Moreover, since keeping an existing customer can save you 5 to 25 times as much money as finding new ones, it is crucial to devote at least as much time and energy to finding new ones. And it’s vital to approach it correctly, led by your company’s principles and a dedication to providing the best for your customers.
It might help you when you gain their trust because customers sustain your brand even when the market ebbs and flows over time.
What precisely does customer loyalty mean?
Customer dedication to your brand is known as Customer Loyalty. A devoted consumer will always pick you over the competition because of your superior customer support, unmatched product quality, and variety, or any other quality that sets you apart.
The most fundamental technique to measure loyalty is to look at how many transactions a customer has made in your database throughout his lifetime. Different sectors have different ways of doing this.
Your most valuable customers are repeat ones. Even though they might not make large purchases, it is possible that over time, their revenue will surpass that of the more significant one-time consumers.
In fact, across all industries, a 5% increase in customer retention rates results in a rise in earnings of 25% to 100%. Again, it is because satisfied customers spend money more frequently.
Having devoted clients also has many other advantages, including free word-of-mouth promotion, desired online reviews, and much more.
How do I build customer loyalty?
Customer loyalty is hard to come by. Customers are motivated by their objectives, and they will remain loyal to the business that can assist them in achieving those objectives. No matter how satisfied they have been with your brand in the past, if a rival makes a special deal, the customer will accept it.
8 Steps to Build Customer Loyalty
Nevertheless, the steps we list below can help your business stay one step ahead of the competition and develop a loyal consumer base with excellent customer service.
1. Build a multi-channel customer service system:
Being aware of your consumers’ demands is essential if you want to develop their loyalty. One of the finest ways to connect with your consumers, especially when they need assistance, is to have a multi-channel support system.
More customer engagements will result from increased customer access to your service staff. You’ll have more opportunities to affect your consumers’ experiences the more frequently you engage with them. The potential for an omnichannel customer experience is also presented by using different channels for customer assistance.
When a consumer has a consistent experience with a brand across different channels, platforms, and devices, it is known as an “omnichannel experience” and to do this you can use our social listening tool. It raises customer satisfaction since it makes your customer service more approachable, and when your consumers are upset, this is what you want.
If you are new to social listening, then read this : What is Social Listening?
2. Ensure exceptional customer service:
Giving away free goods, discounts, and perks is not what’s called providing exceptional service; it goes above and beyond the client’s expectations. In actuality, the reverse is true. Instead of a free sample, customers want solutions to their concerns. Giveaways and discounts only serve as temporary fixes.
Instead, put the onus on your team to pay attention to what the client is saying and try analyzing the feedback. Although these can help sweeten the deal, your customer will often be happier with the solution than with a fix or perks.
3. Be consistent
Consistency is one factor that significantly contributes to the success of franchises like McDonald’s and Chick-fil-A. No matter where they are in the nation, customers always know what to expect from these establishments. That might not initially appear to be a factor in fostering consumer loyalty, but it is, and here’s why.
Customers may readily adopt brands into their lives when they offer consistency in their products and services. Customers believe them because they consistently deliver on their promises with good customer service.
4. Focus on the customer, not the contender:
There are appropriate times and places to research competitors, but doing so won’t be as helpful in retaining customers as you might believe. The same outcomes won’t be achieved for you if you copy what your rivals are doing to get clients.
You must be even more inventive than your rivals to outperform them in the eyes of your clients. To achieve this, you must be aware of what they are doing.
5. Focus on building credibility:
According to research, almost three out of five consumers say having a positive brand experience is important to feel loyal to that company. Additionally, after one negative experience, 50% of customers said they would switch to a different brand.
Every company makes errors. But if you want to keep clients, you must limit these errors and fix them as quickly as they occur. Customers want to be appreciated, and if you fail to do so, you might lose them to competitors!
6. Share positive customer experiences:
Why not tell others about your pleasant Customer Experiences if you’re doing a good job creating them? Collect consumer feedback and post your reviews to inform everyone about your business’s advantages.
Use your omnichannel communication system to distribute these stories through several channels. Good interactions can help you get the most out of your clients because they would believe what other customers say than what you advertise.
7. Reward your customers:
The most valued customers for your company are those devoted to your brand. Studies have found that customers who feel a strong emotional connection to your business have a higher lifetime value than ordinary customers.
These clients ought to be compensated for their increased spending with your company. A loyalty program becomes crucial in this situation for fostering client loyalty. According to research, 68% of repeat consumers will sign up for a loyalty program if it is presented.
Customers who sign up for the program spend huge amounts of money with your business because they get rewards for their patronage. Why not give them another reason to continue doing so when they already appreciate doing business with you?
8. Deliver added value:
Your rivals are also battling for the attention of your clients, not just you. Everyone tries to prove to their clients that they can best meet their needs. How then do you defeat them? Overdeliver on their expectations.
Statista Research reveals that 61% of millennial customers are willing to spend more for a guaranteed positive experience. You may show that you care about the customer’s lifestyle and money by providing value after the sale. And one strategy is to hold events or competitions that your target audience would find appealing.
Successful examples of customer loyalty from franchises!
We have rolled out the models you can use to boost customer loyalty and scale your business. How about knowing how the industry giants do it?
Amazon Prime membership is one of the most prominent consumer loyalty programs. There is a single annual cost for this subscription-based service. Customers who subscribe receive free two-day shipping and Prime Video streaming access.
For Amazon, this program has been a huge success. According to research, Prime members spend an average of $1,300 on the website annually, compared to non-Prime members’ $700.
The Starbucks app is used to make purchases by 23.4 million adults aged 14 and older at least once every six months, making it one of the most popular mobile apps in history. It is 1.4 million more than Apple Pay and twice as many as Google Pay combined.
Customers may easily load a set amount of money onto their mobile device through the app, which you can use to pay for things in-store. Customers can place mobile orders and pick them up at the nearest store.
Customers receive “stars” for every mobile purchase, which can be redeemed for free drinks or other treats. Arguably, that’s a splendid step taken by Starbucks to build customer loyalty!
Ask Sephora, whose Beauty Insider customer loyalty program has 25 million members, sometimes offering customers unique experiences is just as, if not more, successful than discounts alone.
The well-known makeup company offers “insiders” access to special experiences, such as the first pick of new items, meet-and-greets with brand founders, and a behind-the-scenes peek at how their desired products are manufactured, in addition to discounts.
Create your customer loyalty program:
Prioritizing the client experience must come first when developing a customer loyalty program. A loyalty program is more engaging than saying, “Thank you; come again.” It won’t magically resolve all of your customers’ problems.
Once the clients’ trust has been earned, they will compete for the chance to receive benefits for using your brand. After all, they have been devoted customers; don’t they deserve to be treated like royalty?