Customer loyalty is one of those concepts that all businesses need to pay close attention to, despite their company size. The level of your customer loyalty significantly impacts how well your business does.
Businesses need to care about customer loyalty since retaining current customers is way more affordable than acquiring new ones. Did you know that acquiring a new customer costs five times more than keeping one? Well, now you know, and this is why you should worry about how loyal your brand’s customers are.
In this article, we first define customer loyalty and then talk about why you must keep your customers loyal. Then we discuss five ways to make your customers loyal to your brand.
Let’s get started!
The definition of customer loyalty
Like many other marketing terms, customer loyalty is hard to define exactly, but it refers to the ongoing emotional relationship between a brand and its customer. Moreover, it can manifest itself by how willing your customers are to engage with your brand and repeat their purchases from your company.
One of the most important indicators of customer loyalty is repeat purchases. A real loyal customer returns to buy your products and services for a long time, maybe even for the rest of their lives.
Customer loyalty comes from customer satisfaction which outweighs availability, pricing and other factors influencing buying decisions. Furthermore, it is the result of your customers’ positive experience with your brand and can create real trust. During the COVID-19 pandemic, customer loyalty became especially important as consumers were highly conscious of their budgets.
Loyal customers typically:
- repeat their purchases,
- interact with your brand via different communication channels,
- talk to others about your brand, actively advocate for you and create word of mouth.
Why is customer loyalty important?
Now that we know what customer loyalty is, let’s take a look at why it is important.
Helping companies grow
First of all, customer loyalty helps companies grow. It all has to do with churn.
Churn happens when you lose old customers more than you acquire new ones, and it has an enormous impact on how well a business performs. If the cost of acquiring new customers were the same as retaining the old ones, churn wouldn’t be a problem. But unfortunately, it isn’t.
As mentioned earlier, it costs five times more to gain new customers than retain the old ones. Therefore, businesses that want to grow to pay extra attention to the happiness of their current customers.
Bringing higher profits
One fantastic thing about loyal customers is that they typically tend to spend more than new customers. This is why they already know your business and trust it enough to spend more money buying your products and services.
Moreover, how much repeat customers spend increases with the duration of doing business with a company. Loyal customers yield higher conversion rates compared to new customers. This means that your business can get more value from loyal customers who visit your website.
Contributing to brand image
Customer loyalty is also important because it contributes to your brand image. Nobody wants to buy from a business with a bad reputation and an unsatisfied customer base.
If you keep your customers happy and loyal, they are more likely to talk your brand up with others and refer your business to their friends and family members. This can create word-of-mouth, and we all know how valuable WoM actually is.
How to make your customers loyal
We know the importance of customer loyalty and how it benefits businesses. Now, let’s learn how to make your customers loyal.
To make your customers loyal, you need to be:
- Be generous with your customers
- Show that you care
- Offer a benefit with each purchase
- Communicate with your customers effectively and regularly
- Create a community of your customers
Be generous with your customers
Looking from the outside, most customer loyalty programmes might seem to be a scheme to get customers to spend more money with a company. And this is why you need to be really generous with your customer loyalty programme because generous loyalty programmes stand out; otherwise, you will end up being one among millions offering the same programme.
If you design your customer loyalty programme in a way that requires your customers to spend a large amount of money to get a tiny discount for their next purchase or get samples that they don’t really need, you need to rethink it.
Instead, you need to walk in your customers’ shoes and show them how much they bring value to your business.
Show that you care
You might be tired of hearing it, but if you want your customers to return and repeat purchases, you must show that your brand cares about them.
Various businesses repeatedly bombard your customers on daily basis. Every company wants to attract as many customers as possible. But what makes you stand out among other brands is showing gratitude. If your customers feel that you care and value them, they are more likely to become loyal and purchase more from you.
A great and effective way to keep your customers loyal is to express your gratitude through handwritten notes or direct, one-to-one messages. You can include thank you notes in your packages or the emails you send them. You can also send special cards on holidays!
Offer a benefit with each purchase
You can build loyalty by providing your customers with unique benefits related to your products or services.
Offering a benefit with every purchase is one of the best ways to keep your customers loyal. This works incredibly well when you don’t want to design and offer a whole loyalty programme.
This is also a great way to show your customers that every purchase matters and that you value them greatly.
Communicate with your customers effectively and regularly
If you want to create loyalty and maintain your customers’ trust, you need to communicate with them continuously. Transparency and honesty go a long way in keeping people trusted in your business. When customers know that you are interacting with them with honesty and transparency, they will trust you more, resulting in a positive experience with your brand.
Customers should know what is going on with your business. This means good and transparent communication. New products and services, updates, significant changes, shortages or anything that a customer should be aware of need to be clearly communicated. These are all parts of good communication with your customers, and it is necessary to build customer loyalty.
Create a community of your customers
One of the most effective ways to keep customers loyal and build trust is by creating a community of customers for your business. Customers always trust their peers more than they trust any company.
Besides building customer loyalty, online communities offer many benefits for brands, from getting feedback and innovative ideas to fostering meaningful relationships and increasing customer engagement. This is why community marketing has become one of the fastest-growing trends in the marketing industry.
There are different ways to create a branded community. Some businesses create their communities on social media platforms. However, the most effective way to create a brand community is to provide a dedicated space.
Pukket is a community-building assistant that helps brands build and manage online communities and create word of mouth. If you want to know more about what Pukket can do to help your brand, be sure to fill in the form below, and we’ll contact you as soon as possible!