6 Ways To Build Customer Loyalty To Your Business

Customer retention is a key factor for business growth, as loyal customers are typically the most predictable revenue stream and have a lower cost of sales than new net customers.

Therefore, creating an effective strategy that engages and helps retain existing customers is a top priority for organizations.

What is customer loyalty and why is it important?

Loyal customers have gotten into the habit of doing business with select brands and looking for them even if it’s a little inconvenient or if a competitor offers a similar product at a discounted rate. Customer retention offers several benefits which include, but are not limited to, the following:

  • commercial references from satisfied and loyal customers;
  • positive customer reviews on social media sites and other means;
  • information on the purchasing behavior of customers;
  • more targeted marketing to existing customers; and
  • better understanding of customer needs.
Engaging with customers throughout the buying journey can take them from being a simple buyer to being an advocate.

How to retain your customers?

In order to retain customers, it is necessary to understand several key areas that can help ensure that the company has an effective customer retention strategy. This strategy can help build customer loyalty and convert prospects into satisfied and loyal customers.

Here are six ways to build customer loyalty for a business.

1. Keep in touch with your customers through multiple channels

Keep existing customers informed of new products, promotions, and any other relevant information that affects the products or services that a customer typically seeks with this business. Tools like HubSpot and Marketo support multi-channel communication and can maintain contact with potential and established customers within the platform. These marketing automation tools natively support different digital communication methods or integration with popular messaging, texting and social media tools.

These communications can also be used to remind clients of the company’s core values ​​on topics such as climate change, recyclable materials and support for non-profit organizations.

2. Show you know the customer

Adobe and Woopra platforms, for example, can ingest different data sources such as sales data and customer demographics and provide insight into overall customer behavior. These data sets can then be used to guide the delivery of promotions and timely product recommendations based on the statistical likelihood of customers going in that direction.

Big data and artificial intelligence have given a huge boost in this area and are supporting initiatives that help deliver purchase forecasts based on a customer’s unique attributes.

3. Capture and benefit from customer feedback

Organizations must be able to capture and act on feedback from their existing customers. Many of today’s best CRM tools like Salesforce, Microsoft CRM, and others are a great way to collect and centralize customer feedback from social media posts, customer calls, e-mail surveys, telephone surveys or suggestion boxes. By analyzing this feedback and creating a strategic plan, businesses can better understand what they need to adapt to to retain these customers.

A business must demonstrate its ability to evolve with the market and meet customer needs in order to retain customers.

4. Show your appreciation with a loyalty program

While customers can’t save a huge amount of money by participating in a loyalty program, even small rewards can show a company’s appreciation for its customers. Offering customer-only discounts or promotions is an easy way to keep those buyers coming back. These programs also empower a business to collect useful data, such as identifying the most valuable customers and those at risk of doing business elsewhere. Additionally, a loyalty program can motivate a repeat visit because the customer is aiming to meet a certain goal or discount. For this to work, a business must ensure that the incentive is adequate and appropriate. Several platforms allow companies to access a loyalty program, including LoyaltyLion, Qualtrics Customer XM, TapMango, and Salesforce Experience Cloud.

5. Stay relevant to the customer

A business must demonstrate its ability to evolve with the market and meet customer needs in order to retain customers. Products don’t necessarily need drastic changes, but they do need enough to show that the business is keeping up with current events and customer needs. Being open and honest about these changes and why they happened can foster positivity when customers consider their purchasing options.

6. Know your numbers and measure them often

Building a loyalty program on its own is not enough to increase revenue or maintain the support of loyal customers. A business must also measure and analyze key data points to assess its effectiveness and correct course when needed. These key measures are:

  • customer satisfaction scores or net promoter scores;
  • Customer lifetime value (annual revenue per customer multiplied by the average number of years with a customer, less customer acquisition costs);
  • the ratio of customers who made a new purchase in a year (the number of repeat customers during an annual period divided by the total number of customers during that year or period);
  • annual revenue generated by loyal and repeat customers compared to other customers;
  • revenue based on loyalty level – if different membership levels are in place; and
  • number of purchases associated with promotions for loyal customers.

Customer engagement and retention should be a top priority for any organization. One of the best ways to do this is to set up a loyalty program that rewards loyal customers and attracts new customers to the business. However, the best loyalty programs require the right tools to collect and analyze data information, marketing and sales tools to implement that information, and a strategy to bring it together.

Joseph P. Harris