Beginner’s customer loyalty guide? Why should you ever need it? Let’s discuss this.
Customer loyalty plays the most important part in the success of any brand. To start with, customer loyalty shows that you are solving the right problem of the customers with your product.
Moreover, it tells that they prefer you over other competitors. Isn’t that a great feeling?
It costs 5 times more to acquire a customer than to retain an existing customer. Click To Tweet
Maybe now I have developed your interest in this topic. So, let’s start by understanding what exactly customer loyalty is and what role does it play in the success of a brand.
What is Customer Loyalty?
Customer loyalty is when a customer is delighted (more than satisfied) with your product, finds real value in it, and wants to continue buying it over and over from you because of the great perceived customer value and customer experience.
This is also the reason for needing the beginner’s customer loyalty guide.
What is the Importance of Customer Loyalty?
Fun fact: Existing customers are 50% more likely to try your new product.
Customer loyalty makes a positive impact on the business, benefiting it in many ways. Here are some of those:
1. Increase the Lifetime Value of Your Customers
When you think of customer loyalty, think of the lifetime value of customers. Many business owners fail to do so.
Whenever any of their customers are dissatisfied, they let that customer go without seeing what a huge impact it’s going to make on their businesses.
Example:
Let’s imagine, you own an organic grocery store at one of the corners of Brooklyn.
One day a customer complains about a product to you, “I bought this almond milk carton but it doesn’t taste right. I would like to get my money back.”
You can react and say, “you have already opened the almond milk bottle. So, we can’t refund the money.”
You have just saved yourself $5. Bravo!
But you have lost $50,000.
How does customer loyalty increase your profits?
Keeping in consideration that organic groceries cost much higher than non-organic ones, this customer of yours must be buying at least $50 worth of groceries from you every week, spending around $200 in a month or $2,400 in a year.
On average, let’s assume that people reside for at least 10 years in that neighborhood of Brooklyn before planning to move to a new location. This means $24,000 is the customer lifetime value.
Imagine, if the same customer gets married. This amount doubles up to $48,000.
You have just disappointed a customer who wanted to pay you $48,000 over a $5 product. Was that worth it?
Let’s make this situation more appropriate for the digital world. This customer goes online and posts a bad review for you.
He is able to influence at least 10 people out of 1000 who saw that review. Now, you have lost $48,000 plus 10 additional customers.
That’s why it is good to always think of long-term benefits when it comes to customer loyalty. That’s why we are working on the beginner’s customer loyalty guide.
2. Create an Army of Customer Advocates
Advocates are those people who speak on your behalf and defend your side.
Similarly, customer advocates are those customers who stick to your product and tell others why it’s worth it.
Wow!
That should be your reaction after reading it.
Can you wish for anything else than having a set of customers who are spreading the word out about your brand and making others familiar with the value of your product?
You just hired for your brand a team of marketers who are paying you and still marketing you.
Increase Customer Equity to Improve Customer Lifetime Value: Here’s How
3. Build a Community
You are building more than just customer relationships, you are paving the foundation of a strong community around your product.
This community is the one who loves your product and they take real pride in being associated with it. To point out, they are the ones responsible for growing your business.
Another fun fact, it has also been noticed that existing customers spend 31% more than new customers.
How to Build Customer Loyalty? A Guide for Beginners.
Just like customer loyalty, even the process of building customer retention and loyalty is a long-term process.
This entire process is built on two important blocks –
Building Customer Value
Building Customer Relationship
Step 1) Building Customer Value
You can’t build customer loyalty if what you are offering to your customers is failing to solve their problems. Customer loyalty and customer value go together.
Customer loyalty will increase when customer value will increase. It is a continuous process. Click To Tweet
Never be satisfied with your product. Always think about how can you add more value to your customers’ lives? What can you do to make your product even better for them? It will help you to innovate and be ahead of the curve at the same time.
Not to mention, your customers are going to love you for that.
Step 2) Building Customer Relationship
Building customer relationships is also an unending process. Imagine it like your personal relationships. It will need continuous efforts from your side, a lot of caring and nurturing.
The moment you fail to provide that, there will be dissatisfaction, and dissatisfaction is not good for any business growth.
Even a small change from completely satisfied to somewhat satisfied in the customer satisfaction level can bring a huge dip in the level of customer loyalty for your brand.
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How To Increase Customer Loyalty? 4 Easy Strategies For Small Retailers
Once you have achieved the initial level of customer loyalty, your next goal should be to increase brand loyalty. How you can do that? A custom strategy is going to be the answer to it.
Like I discussed in my past blogs, a strategy is unique to a business and created in accordance with its goals.
Many business owners don’t understand this part on time and they end up implementing some other business strategy for their business.
If you compare your business with the business whose strategy you just copied, you will find that you both are not alike.
Certainly, you have different target audiences, target different markets, sell different products, and have different business goals to achieve.
If there are so many dissimilarities, then the copied strategy won’t bring you any desired results.
If you think there are not many differences, then we have got even a bigger problem here than building customer loyalty.
And you should reexamine every aspect of your business because long-term business growth comes from being unique and not from being the same as others.
1. Start Customer Loyalty Cards / Customer Loyalty Rewards
The majority of brands use customer loyalty cards for building and increasing customer loyalty.
For example, most of the airlines, shopping stores, grocery stores, Walgreens, CVS, Starbucks, Sephora, and many other brands are using this kind of loyalty program.
In this case, a customer is required to collect points to get additional brand benefits. More points there are, more benefits can be redeemed.
So, From getting a discount to getting a free product, it includes various kinds of benefits.
It is one of the most common ways of rewarding your customers for purchasing from you and you can easily implement it even for your business.
This might be good for all those businesses that involve frequent purchases by the customers. For products, where frequent purchases don’t happen like cars, it might not be a great idea.
2. Provide Access to Community
The biggest example of this beginner’s customer loyalty guide is Harley Davidson. They have built a strong community of people who share the same kind of values and totally admire their products.
And all the Harley Davidson enthusiasts are allowed access to various VIP events, products, and experiences.
If you want to make this a part of your strategy, you have to start by understanding more about your customer.
You have to learn more about who your customers are, what are their needs, and what drives them?
So, all these things will help you in building a community around an interest that not just connects them but also inspires them.
3. Give VIP Perks
Many customers prefer exclusivity over any other kind of benefit.
That’s the reason we have VIP lounges at the airports for all those who prefer special treatment and we have Amazon prime for all those people who are not thrilled by the idea of paying for shipping and taxes.
If you have a product where special VIP perks can help retain more customers, then this definitely should be part of your customer-driven marketing strategy.
4. Do Gamification
This is the advanced version of customer loyalty solutions. In this case, you use the power of AI and virtual reality to keep customers engaged with your brand.
The only problem is that it’s a high level of strategy requires a large budget. If you have the budget for it, why not make a game out of this entire process as Pokemon did.
Key Takeaway: Customer Loyalty
Customer loyalty is something that all business owners should aspire to achieve for their brands.
Loyal customers will become your source for word-of-mouth marketing which will drive revenue and growth for your business.
That’s why don’t just settle for customer satisfaction, go for customer delight and you will be surprised to see the type of results it will bring for your business.
If you are struggling in retaining your customers and building customer loyalty, you need a change in your strategy. Reach out to us and we will definitely find a way to solve your problems.
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