Have you ever wondered what makes a customer a die hard supporter of a business? You’re not alone.
Determining customer loyalty is a hot topic right now and yet many people don’t know what it means, why it matters, what causes it and how to improve it.
Research has shown that 65% of a company’s business comes from previous customers.
If customer loyalty is that important to a business, why are businesses not aware of what will trigger this loyalty?
In this blog post, I will help you understand what customer loyalty is, how it helps your business and what you can do to create loyal customers.
What is customer loyalty?
Customer loyalty is an emotional relationship between you and your customer.
This relationship is made manifest by how willing the customer is to engage with and repeatedly purchase from you versus your competitors.
What Loyal customers do
1. Purchase repeatedly
Loyal customers are likely the ones that keep coming to patronize your brand. They always come back for more- maybe you have their favourite products, or they just want to try out other things you have.
Whichever way, they still come back to you.
2. Increase revenue
Repeat customers spend close to 70% more money on products and services when compared to first-time customers.
This inclination to spend more stems from trust that has been activated as the customer repeatedly comes back.
3. Become brand evangelists
Loyal customers will not only come back for themselves, they come back with more people.
They become happy evangelists who spread the word of your business to everyone they come across.
They are most likely to convert their friends and family into paying customers as well, thus offering you free word-of-mouth marketing.
4. Defend against the competition
The competition is out to take a big chunk of your business revenue. But when you have loyal customers who purchase from you, and also refer others, your competitors lose out on the money you gain.
5. Give valuable feedback
Because your loyal customers like your brand, and want you to improve, they are most likely to respond to all your surveys and questionnaires.
They don’t mind taking the time to give these feedback as success for you spells more satisfaction for them.
What is the key cause of customer loyalty?
While they are several factors/ points that can be attributed to customer loyalty which includes
Listening to customer feedback
Making the buying process easy
Exceeding customer expectations.
The main cause or driver of customer loyalty is customer experience, a positive customer experience which encompasses all other factors listed above.
Think of the last time you had a positive experience at a store. How did it make you feel? Did you feel like going back? Did you go back?
Now think of when you had a negative experience? Did you go back?
The experiences customers have with your brand can either make, or mar the reputation you have.
What is customer experience?
Customer experience is the impression your customers have of your brand.
It starts from the very first interaction they have with it, and includes every other interaction even if it doesn’t lead to a purchase.
This impression further impacts their loyalty to your brand, thus directly increasing your revenue.
The two primary touch points that create the customer experience are people and products.
Does the product impress them with its performance?
Are they delighted by the attention a customer service rep gives them?
Does it help to solve their problems?
Creating a great customer experience takes all of this into consideration.
Customer Experience vs Customer Service
You may be wondering, why customer experience? Why not customer service?
Customer service is a part of the customer experience .
Customer service is the support a company provides to customers who are facing issues while purchasing or using its products or services.
Customer experience on the other hand is the overall perception a customer has of a brand. This results from the interactions the buyer has had throughout his journey.
While customer service focuses on human interaction and directly supporting customers, customer experience is the sum of the entire customer journey with your business.
Why is customer experience so important?
Customer experience is beneficial to a brand as it helps:
Strengthen brand preference
When customers witness personalized efforts from a brand to make their enquiry, buying process and checking out easy, it strengthens their preference for that brand as they are likely to come back to experience the same.
Inspire customer advocacy
Positive experience makes happy customers. Happy customers make the best brand ambassadors.
Satisfied customers add to revenue with incremental sales. And positive word of mouth helps the organization to add more value in terms of new business sales.
Minimize customer churn
When a customer has a positive experience with your brand, they stick with you through thick and thin.
And this reduces the rate at which you lose customers as the loyal ones do not bulge.
Pillars of customer experience
To deliver an exceptional customer experience, businesses need to understand the emotional outcomes linked to it.
And this is why these pillars of customer experience were developed. They are;
Being trustworthy and inducing trust
For customers, organizations which can deliver on its promises are the key to integrity.
Therefore, to elicit a good customer experience, a business and its staff should create moments and events which help to increase its integrity.
Turn a bad experience into a great one
Never let a customer leave with a bad experience. This could put a dent on your reputation.
Things may go wrong at some point even if your processes are good. And when this happens, pull a reverse move, bring these customers right where they are meant to be.
Give an apology and fix the issue with urgency. Let them know that you are dedicated to serving them.
Meet, and Exceed Customer Expectations.
Do not over promise and under deliver. Under promise and over deliver. Set high standards for your business, match customers expectations and exceed those expectations.
Understanding customers’ circumstances to establish relationships .
Don’t be casual about customer relationships. Being empathic entails that you establish a strong relationship with these customers to better understand their pain points.
This then allows you to create solutions, tailored to their needs and pain points.
Using individualized attention to drive emotional connection.
One of the most valuable components of customer experiences is personalization. Create personal experiences by using customer preferences, past interactions and the use of names.
This makes the customer feel more valued after every interaction.
6. Time & Effort
Minimize customer efforts and create easy processes
Everyone is looking for instant gratification (thanks to lack of time), and your customers are not exempted.
Make every process easy. From decision making, to buying, to checking out and your customers will be grateful.
How to build Customer loyalty
To build customer loyalty is to improve customer experience. And this can be done by:
Giving exceptional customer service.
Creating a customer loyalty program.
Engaging with customers via social channels.
Leveraged personalized email marketing.
Delight customers on special occasions.
Ask for and implement customer feedback.
Though there has been much debate on what is the root cause of customer loyalty, it is clear that customer experience sets the pace when businesses are trying to institute such loyalty.
This is made evident by the fact that customers are becoming more informed, and adapting to businesses that create a space for them to be more valued and needed.
And since there is a growing competition for this customer’s attention, and patronage, it is very important to build and improve on customer loyalty in order to maintain market share and increase revenue