Learn why customer loyalty and retention is important and what strategies you can use for your business here.
In this article:
- Encourages Repeat Customers
- You’ll Gain a Built-In Focus Group
- Enables You to Do Cross-Selling Efforts
- Helps You Set Yourself Apart
- Helps You Forecast Better
- Ways to Gain Customer Loyalty and Retention
5 Benefits of Customer Loyalty and Retention to Businesses
1. Encourages Repeat Customers
Customers who receive excellent service and products along with the best customer service are more likely to return. Additionally, they will refer their friends and relatives to your business. Word of mouth travels fast – and that works both ways. You could have the best products or service, but sub-customer service would most likely lose a repeat customer. And with that loss, you could lose several additional customers.
If your customer doesn’t like the way he or she is treated, that customer will most likely not return and will definitely not refer you. A repeat customer is a happy customer. Happy customers always refer your business to others. Furthermore, repeat customers are more likely to try new products and services you offer.
Loyal customers spend more than they really need to. Because they want to support your business, they will often buy products and services that could be useful, though those products and services are not necessary purchases. This could significantly reduce your marketing costs. Tie a loyal customer in with word-of-mouth advertising, and you have more sales for new and old products, which means that you spend less on marketing.
A loyal customer will always take your side. For example, if a competitor is closer to a loyal customer, that customer will spend the extra few minutes to go the extra distance for your products and services. Liken it to two top brands of soda. If one store is out of your favorite, you’ll go a few miles down the road to get your favorite. It works this way with businesses of all sizes with any amount of competition.
2. You’ll Gain a Built-In Focus Group
Majority of loyal customers wouldn’t mind taking a few minutes to answer your surveys. Since they want you to succeed, they will let you know if you are doing a great job or how you could make your products and services even better. Whether your loyal customers want additional products and services or have ideas to make what you offer better, this customer base will stay with you through thick and thin, especially if you listen to their ideas and suggestions.
3. Enables You to Do Cross-Selling Efforts
Since repeat customers are loyal to your brand, you have the opportunity to add other products and services to your line. Instead of focusing on finding more customers for the new products and services, you may make several sales with existing customers. Once again, those customers will help you spread the word about your new lines, thus reducing your marketing expenses.
4. Helps You Set Yourself Apart
In addition to exemplary customer service, your customers must feel as though they are getting a good deal. Even if your products and services are a little pricier than your competitions’, if the quality is high and the customer service knocks their socks off, they are more than willing to stay loyal to your brand and to refer it to others.
Making yourself stand out from other competitors could be as simple as being available on odd hours or holidays to providing gifts for those most loyal to you. Adding a little extra to services and products by adding a personal touch or using materials and/or ingredients that are of top quality also makes the difference between keeping and losing a customer.
With loyal customers, you also improve your brand image. When people know that you have a set base of regular clients, new ones know you must be doing something right. It becomes easier to build a larger customer base as more people become loyal to your brand, especially those that found you through word of mouth.
5. Helps You Forecast Better
One of the most important things about having loyal customers is that you are able to more accurately forecast earnings for upcoming quarters. Your loyal customers will buy at least the same amount of products or services every month or quarter – if not more. This allows you to base other parts of your operations, such as purchasing more inventory or adding a new product line, with the ease knowing you have sales that are nearly guaranteed.
Ways to Gain Customer Loyalty and Retention
Whether you are looking for new customers or have a good base of regulars, you want to stay focused on customer loyalty and retention as part of your marketing budget. One of the best ways to show customer appreciation is to give them gifts. However, the ultimate way to retain customer loyalty and retention is exemplary customer service.
You don’t have to spend a lot of money to gain these for your business. If your employees are trained in providing exemplary service, you are well on the way to keeping your customers around for many years. Those who interact with customers should always be polite and have a smile, even when the employee is not feeling well or is otherwise having an off day.
You could also show customers your appreciation with small gifts that are personalized with your company’s name. Make sure the gift is of high quality and is something that the customer will be is able to use in his or her business.
Also, providing extra touches to your services and ensuring your products are of excellent quality also keeps customers in your back pocket for many years.
Even if your customer service, products, and services are all top notch, you can help your company stand out by showing your customers your appreciation. Giving gifts on special days, when a customer spends a certain amount of money in a set time frame, or even because a customer tries a new product shows your appreciation for your customers’ loyalty.
LogoX has many different products to help build a customer’s loyalty. If you are having a difficult time choosing the products you believe will be appreciated by your customers, give us a call. We’ll help you with ideas for the best products to show off your brand and your appreciation for your customers.
What do you think are the other benefits of customer loyalty? Let us know your thoughts below.