Are you looking for an explanation of what customer loyalty is? You can google this question and get a wide range of responses. But we would suggest you follow our explanation to clarify its key concepts.
The article aims to provide a concise and authoritative explanation of customer loyalty. This is specifically tailored for business owners and strategists seeking to enhance it.
Firstly, let’s know the definition. Afterward, we will discuss the importance of customer loyalty and how to build it.
What is customer loyalty?
Definition of customer loyalty
Customer loyalty is a sign of a customer’s willingness to do repeat business with your company.
Of course, repeat business happens when your company is able to provide a favorable customer experience. When a customer regularly receives overall value from your business, he will automatically convert into a loyal customer.
Customer loyalty is a customer’s commitment to your brand. Consistently cultivating customer loyalty will result in the establishment of a base of customers on which your business can rely month after month and year after year. What’s nice here is that an emotional attachment is available between customers and your products or services. Fortunately, they will always choose you over the competition.
Most importantly, pricing, availability, or anything else does not easily sway your loyal customers. They are willing to pay more as long as they get the same quality product or service they are familiar with and love.
Furthermore, they are also more likely to refer the business to their friends and family. In most cases, loyal customers tend to spend more money on your brand than new customers because they trust your business.
Now that we know what customer loyalty is, let’s explore other things about it.
Be where your customers are!
Hear your customers wherever they need you.
Customer loyalty vs brand loyalty
The term “brand loyalty” automatically appears when talking about customer loyalty. There is a close connection between customer loyalty and brand loyalty. A noted concern is that it will be irrelevant if you use the same strategies for both of them. Check out the bullet points we discussed below to learn the differences.
- Definition: Customer loyalty is a sign of a customer’s willingness to do repeat business with your company. In contrast, Brand loyalty is the tendency of some consumers to keep buying the same brand of goods even when they have more appealing options.
- Focus: Customer loyalty mainly focuses on the relationship between a customer and a business, whereas brand loyalty focuses on how a customer feels about the brand.
- Pricing: Pricing is a major factor in customer loyalty, but it does not play a significant role in brand loyalty.
- Marketing strategy: To instill customer loyalty, companies must offer low prices, discounts, or sometimes special deals. On the other hand, to make people loyal to the brand, businesses must provide high-quality products and services.
- Measurement: Customer loyalty is measured by the number of returning customers and how much money they spend on average. But in terms of brand loyalty, it is usually measured by the number of times a customer buys from the same brand.
- Customer retention: Customer retention is low with customer loyalty compared to brand loyalty.
Importance of customer loyalty
Customer loyalty will play a key role in the success and sustainability of your business. It could boom your revenue. So, consider it the lifeblood of your company.
As a business owner or strategist, you know your customers are the reason for your business. So why not make an effort to gain their loyalty?
Fosters repeat sales
One of the characteristics of loyal customers is that they come back to you again and again. This is because they’ve surely had excellent customer service from you, and they have a strong feeling that you won’t disappoint them in the future. Consequently, your company will automatically drive more sales from repeated transactions.
Moreover, you will be surprised to know that 93% of customers are likely to make repeat purchases with companies that offer excellent customer service. Therefore, pay attention to it and build customer loyalty to foster repeat sales.
Cheaper marketing strategy
According to the Harvard Business Review, “Depending on which study you believe and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” So, if you want to make more money with less money while doing marketing, build customer loyalty as your marketing strategy. But how will that work? Let’s look at it.
For instance, when you are attracting new customers, it requires several key factors, including marketing research, an advertising budget, time, resources, and so on.
On the other hand, when you have loyal customers, you don’t have to work on the aforementioned key factors. Thus, it is both a cheaper marketing strategy and a time-saving opportunity.
Improves word-of-mouth marketing
Your loyal customers will provide free marketing through word-of-mouth when they tell others of the great experience they had with your business. That’s how you could automatically generate unpaid sales ambassadors. They continuously talk about your products or services with people around them and refer to building a business relationship.
According to a HubSpot research, 81% of customers trust recommendations from friends and family. Here, the additional benefit is that you are carrying out two tasks with one action. First, you are making customers more loyal, and second, you are setting up essential referral networks.
What could be better than that for you? Think about it.
New product launch
For business expansion, you must launch new products alongside your successful ones. Here, we mention successful products. When you have successful products, it is obvious that you have loyal customers. These loyal customers will support you when you are about to launch new products for business expansion. How will it work?
You can leverage the opportunity by collecting feedback on new products. Here, your loyal customers help you identify potential issues, refine features, and improve the overall product before it is available to a larger audience. Also, loyal customers become powerful advocates when a new product is introduced. They are passionate about your brand and will continue to recommend it to their friends, family, and social networks.
Help you survive tough and challenging times
Build customer loyalty in your business, and it could bolster your business even in difficult economic times. It’s not certain that your business will always perform well. There will be difficult periods. But your loyal customers will always be devoted to your business. They are more likely to continue purchasing from your business, even in challenging times. Their ongoing support acts as a remedy that helps you get through tough times.
Moreover, during challenging times, emotional support is a big deal. Here, your business will get support if you build customer loyalty in your business.
Thinking about it?
Your loyal customers always feel connected to your brand. By expressing their solidarity and loyalty, they might provide emotional support. Emotional support can give you the push and confidence you need to turn challenges around.
How to build customer loyalty?
You have arrived at the most important section of our blog. In this section, we will explore seven ways you can build customer loyalty.
Provide exceptional customer service
First things first! If you want to build customer loyalty in your business, your first step should be providing exceptional customer service to your existing customers. At every touchpoint, make sure your customers feel valued and appreciated. Striving for it will keep your audience happy and remind them why they chose your brand in the first place.
By doing so, your customers will have a positive experience, which will lead to increased customer loyalty. So, place customer service at the core of your company’s overall strategies. Think of your customers in everything you do and consider their needs at the forefront of your business. This will not only lead to more sales but also build customer loyalty for the long haul.
In comparison to earlier times, consumers have much higher expectations for customer service. According to a report, “93% of customers are likely to make a repeat purchase with companies that offer excellent customer service.”
The positive aspect of it is that your repeat customers typically turn into loyal customers. So, keeping up high standards of customer service will help you build customer loyalty in your business.
Know your customers and let them know you
When contemplating how to build customer loyalty in your business, know your customers on a personal level. Discover who they are, what their buying habits are, and sometimes learn about what they do for a living.
To get started, create a sales pipeline based on this data in order to figure out how you can make the purchasing process memorable for your typical customers. To best serve them, tailor your products, services, and marketing efforts to meet their expectations. Just creating a comfortable environment and nurturing them is all that is required. All that is needed is to create a comfortable environment and
For instance, a clothing store could reward customers with special discounts on their birthdays or provide exclusive offers to the targeted audience. You may be thinking this is time-consuming. The convenient thing is that this can be done automatically with the help of useful marketing tools, including text messaging marketing software or email marketing software.
Besides, don’t just be limited to knowing your customers. Let them know about your business. Encourage your clients to have trust in your business. Share your values and let them understand that you care about their needs.
Create awareness of your brand. The more they know about your company, the more likely they are to remember you when about to purchase your niche-related product. That’s how repeat customers are created, who are more likely to turn into loyal customers sooner or later.
Moreover, don’t forget to create a comfortable environment. A comfortable environment will make them feel more enthusiastic. Once you have done that, start nurturing your customers to be loyal.
Encourage customer feedback
Great strategy comes with great results. If you’re seeking a great strategy to build customer loyalty, you must encourage your customers to share feedback. Collecting feedback about products or services is the best possible way to constantly improve them.
When you are into constant improvement, considering your customer’s feedback, and showing it, there will be no reason for a consumer not to be loyal. Remember, your main purpose for collecting feedback is to act on it.
The main point when running the strategy Here, customers are aware that their suggestions or feedback are being acted upon. They feel prioritized and are more likely to continue business with you. From collecting feedback to acting on it, the whole process is called the customer feedback loop.
Let’s see how this feedback loop relates to increasing customer loyalty. Here, customers are aware that you are assessing their feedback.
What else makes the most sense to prioritize them?
This feeling forces customers to do business with you repeatedly. So, as we mentioned before, repeat customers are more likely to become loyal customers sooner or later.
How can you collect the feedback of your customers? Do the action with the help of surveys, online reviews, feedback forms, social media monitoring, live chat, and more. We recommend you use tools like Fluent Forms, SurveyMonkey, Qualtrics, etc. to make the action easier.
Now it’s time to act on the feedback. Set up a dedicated team to complete the loop. Deeply analyze the relevant feedback and make changes or improvements to your products or services. Constant improvements will lead to high chances of better customer service and customer satisfaction.
Don’t you think increasing these two terms is enough to build customer loyalty?
Set up a referral program
Do you know?
“Refer a Friend” is an efficient way to reward existing customers and gain new ones.
For better customer loyalty, set up a well-designed referral program where customers receive certain benefits if they refer your business to people they care about. This customer loyalty program can be a key selling point since a report found that 93% of customers overwhelmingly trust the recommendations of their friends and family. Another study found that 65% of a company’s revenue comes from repeat and referral business. Considering the numbers, why not bother to set up a referral program?
Among various customer loyalty programs, this one is effective as well as affordable. Here, you are offering reward points to your existing customers for their recommendations. Also, don’t forget to give them an award when someone makes a purchase for their reference. This assists in attracting new customers and also ensures that your customers come back for more.
What’s more, create incentives for customers to do business with you. As they now have incentives to do business with you, this will automatically turn them into loyal customers.
Engage customers on social media
Engaged customers are loyal customers. You must agree with that. To engage with customers in a deeper way, what could be better than social media? Make your move and take advantage of the various social media channels.
You need to create a space for your loyal customers where they can interact with each other and share their experiences and issues. Fostering a sense of community among your customers will make it easy.
Moreover, in a social media community, they could support each other enthusiastically. Be active on your social media as well as encourage your customers or audience. Share the input on your social media accounts.
Create promotional content that is exciting, entertaining, and informative. According to your customer’s response, experiment with different mediums like videos, infographics, social media content, and so on.
It is important for a business to have active profiles on different social media sites. Give your loyalists a place to connect with the brand and each other. They may offer guidance on how to optimize the products. Here, community managers can continue nurturing the relationship by providing additional resources and support.
By posting positive reviews, you’re likely to attract new customers and reinforce current customers’ trust in your business. In fact, if you are not available or active on social media, many customers will consider your business irrelevant. Share insights and offer support to one another.
Customer journey mapping
You are trying to build customer loyalty, which means you are learning everything about the customer. So why not create a customer journey map where you can see how customers interact with your brand throughout the buying process?
According to Fluent Support, “A customer journey map is a diagram where you can depict a customer’s pathway while interacting with the business at a different touch point.”
By doing this digital journey mapping, you will get to know the areas for improvement. In the buying process, at each stage, you can easily identify their needs, interests, and pain points. To improve the customer experience, take into account all the potential improvement areas.
What will it result in? This will result in an improved customer experience. Consider all the areas for improvement to create a better customer experience. Sooner or later, it will be a positive outcome to increase your loyal customer base.
It looks good for building customer loyalty, right? If you can pull this off flawlessly, this strategy will be a game changer for building customer loyalty. So, collect customer information in a smart way and then create a visual representation of the map.
Moreover, customer journey mapping will assist you with buyer prediction. In that case, buyer prediction greatly boosts customer loyalty. Buyer prediction enables personalized experiences, anticipating needs, targeted marketing, and proactive support.
Finally, by utilizing data and insights, you can strengthen customer relationships and enhance their overall satisfaction.
Building customer loyalty is important because it can affect the long-term success of your business. So, don’t waste your time on hesitation; assemble your team and make the best effort with what you learned from this blog.
Lastly, I appreciate you taking the time to read this blog.
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