April 21, 2023
In any business, regardless of size or industry, customer loyalty is a major key to success. Customers who have a positive experience with a brand will often become repeat customers, ultimately creating all-important customer loyalty. Customer loyalty should be a top priority for any business owner because of the crucial benefits it brings to the business.
Research has shown that repeat customers are more profitable than new customers as they are more likely to spend more, and are more receptive to trying new products launched by a brand or business with whom they have established their custom. Loyal customers also require less investment to retain, as businesses do not have to spend as many marketing dollars compared to the expense involved in enticing new customers. In addition, loyal customers are highly likely to refer their family, friends and colleagues to the business, leading to increased and improved sales and revenue.
In times of crisis, customer loyalty becomes a critical component to a business’s survival, and businesses and brands must be ready to adapt their customer loyalty strategies. For example, during COVID-19, businesses had to rely on the support of loyal customers to get them through the pandemic. However, that proved trickier than expected as customer loyalties were disrupted by the easy access to alternative brands, especially since a significant majority were shopping online. Many businesses, especially those with the in-store approach, had to rethink their loyalty programs to encourage customers to continue supporting them.
Customer loyalty is also important to businesses as it aids in building brand awareness and recognition. This can be established by providing exceptional customer service, fostering trust and credibility, and proving reliability. For example, if a business is able to establish prompt deliveries as promised, customers are more likely to continue shopping with that brand. When this trust is established, they are highly likely to talk about their positive experience with others. This word-of-mouth marketing is extremely valuable for businesses and enables businesses to reach new customers without having to spend significantly on marketing.
Word-of-mouth marketing from loyal customers is also highly beneficial for businesses because it carries more weight for new customers to try a brand’s product. For example, suppose a customer has been purchasing skincare products from a brand for one year, and is a walking testament to the effectiveness of those products. In that case, their family and friends are highly likely to believe their positive words—compared to marketing strategies, such as advertising. Loyal customers are able to increase a brand’s visibility, boosting sales in the long run.
There is no one better to provide a business with feedback than a customer who has remained loyal to it. A loyal customer, who is likely more willing to provide feedback, would have a better understanding of the products and business, and are able to provide valuable insights that will benefit their operations. As such, businesses are able to identify areas of improvement that will allow them to meet the needs of their customers better, thus giving them the much needed edge over their competitors. Gaining customer loyalty is an essential component of a business strategy to ensure success. By prioritising customer loyalty, a business can achieve multiple objectives. Building customer loyalty will also be a more cost-effective strategy with a return on investment that is more assured. While it may take longer to establish, the benefits a business can expect from loyal customers make it an extremely worthwhile investment.
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