How to build (and maintain) customer loyalty?

What is customer loyalty?

Customer loyalty is achieved when customers repeatedly buy your product or service with enthusiasm and without much concern for your competitors. This is typically the result of a superior product, authentic branding, personalised marketing and excellent customer service. Most importantly, customer loyalty is the ultimate goal of almost every company.

Why is customer loyalty important?

Loyal customers are one of the most valuable assets of any business. They provide a stable source of revenue, ongoing referrals and strong social proof, which are the lifeblood of any successful business. According to business.com, returning customers spend 67% more than new customers. Some additional benefits:

• Saving on marketing costs: attracting new customers requires market research, advertising budget, time, resources and strategy. On the other hand, existing customers are already on your email list and many are engaging with your brand on social media.
• Selling new products.
• Build referrals: one study found that 81% of customers trust recommendations from friends and family. When building customer loyalty, it's also essential to build referral networks. They help spread the word about your brand, get more eyes on your offers, and increase conversions.
• Increase sales and profits: 65% of your company's revenue comes from existing customers. Increasing customer retention by 5% increases profits by 25%-95%.
• Customer loyalty is incredibly important for both online and offline businesses. Now let's look at how to build customer loyalty.

How to build and retain customer loyalty?

Deliver excellent customer service

Excellent service can help create customers for life. According to American Express, about 60% of customers are considering switching brands after two or three poor service experiences. Listen to your customers' needs and provide timely solutions to their requests and problems. Also, make it easy for your customers to contact your business by leveraging available technologies. Many companies are starting to use AI chatbots to provide 24/7 (constant) assistance to website visitors. These chatbots can provide relevant product recommendations that can help increase conversions and even resell to consumers.

Reward customers with special offers and discounts

Retain your returning customers by giving them special offers, discounts and rebates as a "thank you" for their business. To increase success rates, make sure that the special offer or discount is tailored to the needs of each customer. Whatever strategy you choose, always make an effort to help them feel appreciated.

Leverage user-generated content (UGC)

Businesses can build and maintain customer loyalty by promoting user-generated content (UGC). A UGC strategy helps audiences feel like they are seen- like they are part of the brand. To create an effective UGC campaign, you can develop a hashtag to get people to participate in your program. Many customers will participate just to see their photos or stories shared on your company page. Or they can join in on the fun by offering an incentive, such as a prize draw. Examples of UGC include photos of customers wearing their favourite pieces from a new clothing range, or Instagram stories of people showing how they use a beauty brand's skincare products in their cleaning routine. 
 

Create a custom customer loyalty programme

Many businesses, including airlines and cafes, have customer reward or loyalty programmes that are an effective way of encouraging returning customers. Through a loyalty programme, customers can earn points that can be redeemed for shopping vouchers, exclusive holiday rewards and more. It's also a great way to upsell - customers can earn more points at a higher value.  

You can also mark down new products and items that need to be promoted. Also consider offering rewards for reviews on your products to build loyalty and attract new customers. Referral programs are also a must. Reward customers when someone they refer makes a purchase.

Know your customers

When thinking about how to build customer loyalty, take the time to understand your customers on a personal level. Listen to them, share your values and build a relationship with them. If you want loyal customers, you need to develop a customer-centric mindset. Let your customers understand that you have their best interests at heart. You should also make sure that this is reflected in your actions.

Create a sense of community

Use the many social media platforms to create a sense of community with your current and potential customers. Through community, you can start a conversation with your existing customers and target audience. You can also encourage them to post photos or videos of themselves with your product, thus launching a UGC campaign as discussed above.

Make it personal

Make it personal by creating personalised emails and messages for each recipient. Personalized emails provide 6x higher engagement rates than non-personalized emails. In the email, address the customer by name and include a personalized message that addresses their unique interests. For example, you can send special greetings and offers on their birthday and on the customer's anniversary to treat them to something fun. This type of gift builds emotional attachment and positive feelings towards your brand.  

In addition to personalised emails, don't forget to use personalisation in retargeting campaigns for existing customers. A remarketing campaign that focuses on previous customers can encourage them to return and make a purchase. Because you already have information about what they are interested in based on previous purchases, you can easily create personalised product offers that entice them to engage and convert.

How does customer loyalty improve brand image?

Loyal customers often share product and service feedback with your company and their networks. This kind of social proof is a crucial part of the purchase decision process for other consumers. You can share these testimonials, customer reviews and feedback on your website or social media platforms.  

Honest feedback can help improve products and service delivery, gain consumer trust and boost sales. All of these activities will help you retain customer loyalty and strengthen your brand image.

How does customer loyalty minimise costs?

Serving loyal customers is very cost effective. These returning customers are already familiar with the products and services you offer. They can help you market to their friends and family through word-of-mouth and social sharing. This free promotion helps minimize service and marketing costs. Since you already have their contact information and they are likely to follow you on social media, you can communicate with them about new products, sales or other company information for free and easily.

How does customer loyalty improve the accuracy of your forecasts?

Forecasting is a vital part of planning and running a business. Accurate forecasting makes it easier for companies to calculate growth rates, determine spending or discounts, and prepare for emergencies. Feedback and testimonials from loyal customers can provide your business with valuable information on product or service pricing, areas for improvement, and what types of products these customers expect in the future. Because they buy regularly, loyal customers can help you set realistic expectations for sales and stabilise or offset changes in buying patterns. 
 

Take the extra step

Loyal customers are the foundation of every successful brand. These customers are always willing to spend money on your products and services as long as you consistently deliver the quality they expect. Loyalty means continued revenue and less need for marketing budgets, advertising spend and acquisition costs. That's why you need to do everything you can to retain your existing customers and encourage loyalty to your brand. By following the tips above, you can reap the rewards of building and maintaining customer loyalty.