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How to Build Customer Loyalty: 10 Simple Tips

July 07, 2020

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One of the most common challenges businesses face is how to build customer loyalty.

In uncertain times when prospects are hard to come by, it’s more crucial than ever to grow your relationship with existing customers so that they stay loyal to your business. 

The Importance of Customer Loyalty

Every business owner will appreciate customers who buy or visit regularly. After all, repeat business is one of the most effective ways to increase revenue. 

But not everyone fully understands the true value of loyal customers. If you’re focusing the bulk of your time and money on acquiring new customers, consider investing resources in efforts to build customer loyalty. Here are some reasons why.

You Save on Marketing Costs 

Many companies focus more on customer acquisition than retention, even though it costs more to attract new customers than to keep and connect with current ones.

Businesses also don’t break even on one-time customers. This highlights the importance of customer loyalty: to recoup your investment, you must have a strategy for convincing customers to keep coming back. 

customer loyalty saves on marketing costs

It Takes the Guesswork Out of Growing Your Business

Once you figure out how to build customer loyalty, it will be easier to predict the growth of your business and plan accordingly. You can also make smarter decisions to improve operational efficiency.

Based on the purchase behavior of loyal customers, for example, you can accurately identify areas for product development. Marketing teams, meanwhile, can look at the spending trends of regulars to hone their promotions or refine the overall strategy.

 
 

It’s Easier to Upsell and Cross-Sell to Loyal Customers 

Customers are more likely to make repeat purchases or try new products and services when they’re happy with their initial experience. 

drive word of mouth

According to research, the success rate of selling to a customer you already have is 60-70%. Meanwhile, the success rate of selling to a new customer is only 5-20%. 

Repeat customers also spend up to 67% more than new customers. They’re no longer testing the waters with their first purchase, and their chances of making future purchases increases as they make more transactions over their lifetime.  

Loyal Customers Drive Word-of-Mouth Marketing

Creating customer loyalty can also spark organic discussions about your business, with your customers acting as brand advocates. This form of word-of-mouth marketing is a powerful way to generate new leads.

Someone who orders delivery from your restaurant every week is likely to recommend you to their friends and family. Loyal customers will tell people about your automotive services when they’re asked where they get their oil changed.

How to Build Customer Loyalty

What prompts customers to repeatedly choose your company over a competitor with similar offerings? How do you encourage customer loyalty at a time when consumers are becoming increasingly satiated with choices? 

The way to a customer’s heart is much more than a loyalty program or a solid mix of products and services. To build customer loyalty, consider implementing these simple and effective tips.

  • Reward your loyal customers
  • Open your lines of communication
  • Ask for customer feedback
  • Increase personalization
  • Showcase your best online reviews
  • Offer incentives for referrals
  • Do community outreach
  • Deliver excellent customer service
  • Invest in data and technology
  • Measure customer satisfaction

Reward Your Loyal Customers

To build customer loyalty, you must make loyalty worth your customers’ while. 

There are several ways to do this, from providing special offers, exclusive coupons, and discounts to handing out freebies, offering free shipping, and expanding loyalty program rewards.

how to build customer loyalty_reward programs

If you run a service-based business, simple conveniences like immediate seating, priority lanes, or the ability to skip the line can make loyal customers feel highly appreciated and valued.

It helps to emphasize that the perks are reserved for your most loyal customers. This encourages them to stick around, while also motivating others to strive to reach “loyal customer” status. 

Open Communication Lines with Customers

Communication is key to building lasting relationships with your most loyal customers, keeping you fresh in their minds. 

Email and SMS are effective platforms for sending messages with useful information and product updates. You can also use social media and business review sites to communicate with customers and keep them updated.

It’s important to limit sales pitches and overt advertising messages. Also, remember that successful communication is a two-way street. Whether a customer contacts you by email, SMS, phone call, contact form, social media comment, or online review, make a commitment to respond quickly and address their feedback. 

Be Proactive in Asking for Customer Feedback

Another useful tip for creating customer loyalty is to demonstrate that you actively seek customer feedback. This lets customers know their voices are being heard. If some aren’t vocal about their experiences, you can encourage them by sending out surveys or simply asking for reviews

Reaching out to customers and soliciting feedback using a timely approach also helps you determine whether or not you’re delivering experiences that meet or surpass customer expectations.

request reviews facebook

Personalize Your Communications with Customers

Customers want to be heard individually and addressed personally. This makes personalization — the process of tailoring your communications to accommodate specific customer segments — a strong loyalty driver. 

This involves more than just addressing customers by their names (though that’s a great start). Personalization is also about greeting customers on their birthdays, inviting them to try beta releases of your new product, and giving them a heads-up before news and special announcements get to the media.

email personalization

Showcase Your Best Online Reviews

Sharing online reviews on your social media profiles lends your brand an extra measure of authenticity and credibility. It’s also a great way to publicly recognize your best customers and keep your fans and followers engaged.

showcase online reviews and feedback

You can also showcase your best reviews by displaying them on your website. Not only does this provide social proof essential to inspiring consumer confidence; it also puts the spotlight on your loyal customers acting as your brand advocates.

Not getting enough reviews? Just ask. According to customer reviews research, 28% of consumers are likely to leave a review after a positive experience. 

Offer Incentives for Referrals

If you think customers are willing to recommend your business to their friends and family, it may help to give them a little push. The best way to do this is by creating a referral program, with incentives and rewards that make it worthwhile for your most loyal customers. 

Referral programs also help decrease your customer acquisition costs by making use of your current customers to help spread the word. 

evernote referral program - building customer loyalty

Reach Out and Contribute to Your Local Community

Businesses that visibly demonstrate their ethics and show a commitment to the community are more likely to have a stronger reputation and attract customers who care deeply about what a business stands for.

Community outreach doesn’t necessarily have to be about saving the sharks or ending famine in the Horn of Africa. The key is to choose strategic efforts that allow your business to create meaningful connections with customers in the local community. 

A campaign as simple as allowing neighboring schools to hold fundraising evenings in your stores or developing a localized procurement program amidst gentrification can resonate powerfully with customers, inspiring loyalty and brand advocacy.

Provide Customer Service Worth Talking About

This seems like an obvious tip, but it bears repeating because it’s so important. Businesses that truly know how to build customer loyalty are also typically adept at creating memorable customer experiences. 

customer service builds customer loyalty

According to research, 67% of consumers say that a “good customer service interaction” has an effect on their future buying habits, specifically by recommending the product or service to others. 

At the end of the day, if you’re able to serve customers in ways that they cannot experience elsewhere, they will share it with friends and family, sometimes without you even having to ask.

Invest in Data and Technology

Forget business cards in a fish bowl. To truly understand your customers and build customer loyalty, you have to make data and technology an investment priority. 

This allows your company to collect actionable data and manage high-impact trends and issues that affect the customer experience. 

In these unprecedented times when businesses across various industries are experiencing major disruption, technology can transform your organization and exert bottom line impact through reduced costs, increased efficiency, and improved processes.

Categories that may be useful to your business include:

Measure Customer Satisfaction

It’s nearly impossible to improve something you don’t measure. To be a master at creating customer loyalty, you must identify key customer satisfaction metrics and understand what people love about their experience and where you can improve. 

Along with your chosen metrics, take a look at other factors that can be linked to customer satisfaction levels, such as: 

  • Order completion times
  • Product returns
  • Common keywords used in online reviews
  • Number of customer complaints
  • Support tickets created and closed per day, along with response and resolution times

With the right set of metrics, you can accurately measure customer satisfaction, which helps your company turn happy customers into loyal fans. 

What Drives Customer Loyalty?

Approaches to creating customer loyalty vary according to the size and category of a business. So do the factors that drive loyalty.

The bottom line is customer loyalty is not just a program. It’s an executive decision, requiring a firm commitment across all levels of your organization, to recognize customers for every interaction they have with your brand. As the adage goes, “When the customer comes first, the customer will last.”

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