3 Tips for Building Customer Loyalty

In our fast-paced world customers are spoiled for choice. Through technological advancement and increasing globalization, the proliferation of online retailers has created a vast increase in the options available to customers. These same advancements opened the door for a shift during the turmoil of the pandemic and saw many more people opening small businesses and online side hustles.

Faced with such increasing competition in a highly competitive market customer loyalty has become more important than ever. As an industry-leading loyalty provider, we are going to explore the role of customer loyalty in your business and 3 of our tips on how to build it effectively to help you understand how we build loyalty for our customers.

What Makes a Loyal Customer?

Loyal customers are the wheels that keep a business spinning. They are the bedrock on which a business endures, ensuring repeated custom and sustained revenue over long periods.

So, what makes a loyal customer?

Customers want to feel valued. They want to know that their custom matters to the business and that in some way it is acknowledged and appreciated. This can be achieved via excellent customer service, personalized rewards, and incentives, and by presenting yourself as a trustworthy and reliable brand for the customer to return to.

Customers develop loyalty based on the quality of service and how it addresses their needs. If two businesses offer roughly the same product for roughly the same price, it is the business that offers exceptional service that will attract and retain loyal customers. When a customer has a positive experience, they develop an emotional connection to the business and it is that connection which promotes loyalty.

What’s The Value of a Loyal Customer?

In our role as loyalty providers, we see loyal customers as the bedrock of a business. They are the reason you can stay open this year, next year and the year after that. The greatest challenge of any business is finding customers for their product or service. Once the time, money and effort have been expended to find that customer, it needs to be expended again to find the next customer and the next.

The wonderful thing about loyal customers is that although there is an initial investment in attracting that customer to you, once they are loyal to your brand they become invested in you and your business. This means that loyal customers generally spend more over time, are happy to spend on the premium products you offer, are more resilient to price fluctuations and are highly likely to recommend your brand to others.

So, revenue goes up, custom stays steady and brand awareness increases. All from one loyal customer.

Furthermore, loyal customers are much more likely to engage in offering feedback and so can continue to help you grow your business and stay one step ahead of the competitors.

3 Tips for Building Loyalty

1. Use Data Effectively: To build effective customer loyalty we first need to understand how our customers currently see us, and how to measure and track changes to show how our new policies affect customer loyalty.

We can do this by using tried and tested metrics such as:
Net Promoter Score (NPS): to understand how likely customers are to recommend your brand.
Customer Retention Rate (CRR): to understand what percentage of customers you retain in a given period.
Customer Lifetime Value (CLV): to understand the value your customer has to you.

With these metrics, we can begin to paint a picture of our customers and the areas in which we need to improve.

Couple hard metrics with soft metrics, such as customer feedback, surveys, and polls, and we can begin to identify what customers value about your brand and how to offer them more of it in exchange for appropriate rewards and incentives.

2. Deliver Exceptional Value: Once you’ve understood your customer it’s time to deliver on your promise of value and exceptional service. Remember, what a customer values most is the experience of choosing you over your competitor and this is what we should focus on to retain our loyal customers.

To deliver value we must make our customers feel valued and this can be achieved at every interaction your customer has with your business. By knowing your customers, you can offer them personalized experiences via exclusive rewards and bespoke discounts tailored to their desires and shopping habits.

3. Maintain High Quality of Service: On top of bespoke discounts and personalized rewards, it is important to offer impeccable standards of service in every customer interaction. Customer demands for quality service are high and any mishandling in this area can inspire distrust and disloyalty.

Remember each customer is an essential part of your business, how successful it is, and how long it can operate. Treat each person with as much value as they hold by taking a walk in their shoes through your business operations. Consider what you find to be missing, what you feel goes above and beyond, and what your experience would be of interacting with your brand.

By remembering that each customers want to be respected and valued, you can maintain an immaculate level of customer service that keeps customers returning for years to come.

Conclusion

Customer loyalty takes time to build. It requires dedication, understanding and a keen ear for listening to your customer’s needs. But every customer is important and each adds value to your business, loyal customers the most of all.

So, pay attention to what your customers value from you and offer them even more value in return. By paying attention to the appropriate metrics, and delivering exceptional value and personalized experiences, whilst maintaining the highest standards throughout, we know you can build a strong customer base that keeps your business going for years to come.

The next time you're looking for an industry-leading loyalty provider we hope you'll think of Loyalty Works.