Building Customer Loyalty

Why do people buy an iPhone? Why do people prefer shopping on Amazon? Why do a large percentage of internet users prefer to use Google? Why do Ford fans buy Ford only? Why do Nikon enthusiasts prefer Nikon cameras and lens? Why do people stick with specific brands and names when it comes to purchasing a product or a service?

‘Customer loyalty’ is why people buy the same brand of tea, fly on the same airline, shop at the same places, stay in the same hotels, and continue to use the same products and services – despite the fact that there might be plenty of other alternatives available, some of which may even be cheaper or more easily-accessible.

Customer and brand loyalty is one of the essential pillars in building a successful business. It involves attracting the right customers, getting them to buy your products and services, getting them to buy frequently and in large quantities, getting them to come back and buy from you again and bring you even more customers through referrals and word-of-mouth.

Above all, it means investing in your customers so that they want to give you their business! “Our philosophy has been to take most of the money we would have spent on paid advertising and invest it into customer service and customer experience instead, letting our customers do the marketing for us through word of mouth.” says Tony Hsieh, the founder and CEO of apparel and shoes retailer Zappos.

Returning customers are essential to the success and progress of any business. As a business owner, you want people to come to you  and buy from you. And the 80/20 rule of customer loyalty suggests that 20% of your loyal customers will provide you with 80% of your revenue!

Most small businesses however have problems retaining customers, and turning one-time buyers into loyal, returning customers, simply because they cannot compete with larger corporations, who are not only more well-equipped but have much more resources at their disposal.

The fact however is that keeping business and building a large base of loyal and decicated customers is not as hard as you might think, especially if you’re a small business owner.

Here are a few simple steps that will allow businesses to build customer loyalty:


Identify who your loyal customers are.

It is said that 80 percent of your business comes from 20 percent of your customers. These are your loyal customers. Small-business owners can use this principle to identify their loyal customers – customers who bring them the largest proportion of business – and create rewards programs and other strategies to nurture those relationships and drive customer loyalty.

If you want to retain your loyal customers, you need to identify them first! There are a few ways to do this:

  • Research: through the collection of primary and secondary data. This includes collecting customer data and information, such as their names, numbers and email addresses.
  • Social media: through Facebook likes, Foursquare check-ins, Twitter hastags, etc.
  • One-on-one interactions and personal marketing.
  • Through your website
  • On your Amazon page
  • By running a Google search

I suggest reading this article on how small businesses can identify their ‘loyal customers’.

It is also equally important to update data on a regular basis, as this article suggests.


Make a compelling offer

Are you products good enough for people to consider pledging their loyalty to you? Are the services that you offer THAT good?

Your products, services or any offerings should speak for themselves. They alone should be compelling enough to attract first-time buyers and turn them into loyal customers.

This is precisely the reason why people buy an iPhone, an iPad, or an iMac, despite the fact that there are devices with better specs and cutting-edge technology available out there. This is the reason why people prefer staying at a certain hotel when they travel. And this is the reason why people insist on buying and using products made by certain companies.

These brands and businesses offer excellent products and services, which not only fulfill their customer’s needs, wants and requirements, they offer a great experience!

Give one-time buyers a reason to come back to you.


Offer value to your customers

Go above and beyond what your promised; over-deliver and exceed people’s expectations.

Try differentiating yourself from the competition in order to give people a reason to come to you.

Give your customers extraodrinary value – such as something that they can’t get anywhere else. Or perhaps consider offering a new product/service, or try to excel when it comes to customer service (more on this in a bit). Offer online shopping, easy payment and free home-delivery. Or maybe you could try offering a more personalized and tailor-made experience to your customers.

Or you can try offering something extra, that you think your customers would particularly like.

The point is, you need to stand apart from your competition, as this gives people are reason to give their business to you. Look at how you can add value to each aspect of your business.  How you choose to go about doing this depends entirely on you.


Create customer loyalty programs

In order to build a strong base of loyal customers, you need to make your customers feel special. One terrific way of doing this is creating a system through which your business will reward it’s most loyal customers.

Airlines, for instance, offer frequent flyer programs. This is a great example of a loyalty program: fly with us, and we’ll give you more miles for free!

The great thing about loyalty programs is that they don’t need to be uncecessarily complicated. For instance many businesses ofer loyalty cards, which essentially work on a points-based mechanism: each purchase adds a certain amount of points to your total and once you reach a certain limit, you can redeem those points for free prizes, free products, discounts, etc.

Want to make it even more simple? Give customers a punch card, and offer something for free after a specific number of punches, e.g. for every 5 lattes, get the 6th free.


Offer members-only perks and benefits

This too is an excellent strategy to help make your loyal customers feel more special.

Apart from loyalty programs, there’s a whole lot more that you can do. Offer your loyal customers something to thank them for their regular business and unwavering support – coupons, discounts, bonus suprises, or something that your loyal customers would appreciate.

For instance a local cinema that I’m a member of not only offers a ton of members-exclusive priveleges and benefits such as online booking, access to the VIP box, invitation to red-carpet premieres and special screenings,  but often offers perks such as free movie tickets, free +1’s for certain shows, and priority ticketing for members for new shows and so on.


Seek and value customer feedback

When someone gives you their money, they’re not just buying a product or a service, they are paying for after-sales support and customer service as well.

One of the best ways that you can build a strong and loyal group of customers and improve the quality of your after-sales service.

Seek customer feedback, thank your customers for sending their feedback, and make it a point to respond and be prompt with your response. Nothing says ‘I care about our customers’ than a prompt reply to their queires and complaints.

If you successfuly do this, people will make it a point to give you their business AND spread the word about your exemplary customer and after-sales service!


Thank your customers for their business

Sometimes, a simple thanks could go a long way!

Remember to say thanks to your customers when they buy from you, it’s a simple way of acknowledging that you value their business, and it doesn’t cost you a dime.

  • Harry says:

    Emma – Excellent tips on how to improve customer loyalty. It costs 10 times more to attract new customers than to keep the existing ones. Yet I am amazed at how many businesses fail to reward their loyal customers and constantly chase the new ones. Many of the offers they provide are only valid for new customers. Why not reward the loyal ones with the same or similar offers. After all, they are the ones who keep coming back to your business.

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