When it comes to businesses, a loyal customer base can mean the difference between staying afloat and skyrocketing sales figures. The mad rush in front of Apple stores every time a new iPhone is launched is a strong customer loyalty example.
From a statistical perspective, it is crucial to invest time and resources in strategizing how to enhance customer loyalty because:
- Your existing customers are more likely (about 50%) to try out your latest products than new customers.
- Repeat customers also tend to spend an average of 31% higher than new customers.
- Loyal customers often turn into brand advocates, and word-of-mouth recommendations contribute to nearly 90% of purchases.
So, if you want to know how to enhance customer loyalty, Read on.
Customer Loyalty Vs. Customer Retention
Before we dive into the nitty-gritty of how to improve customer loyalty, we first need to understand the difference between customer loyalty and customer retention. Often misused interchangeability, they are two sides of the same coin but have two distinct meanings.
Customer retention is a metric that tracks the likelihood of retaining a customer over a specific period of time. Simply put, it is a strategy that focuses on maintaining relationships with current customers. The primary goal here is to encourage repeated business and reduce churn (the percentage of customers who stop doing business with you).
That said, a retained customer is not always a loyal customer. Any customer who buys from you a second time is categorized as a retained customer. However, that could also be the last time they do business with you.
A loyal customer on the other hand (think Apple fans again) will keep coming back to do business with you over and over and encourage others to do so too.
Strategies like discounts, automatic renewals, and a wide range of convenient payment options can help retain customers. Building a loyal customer base, on the other hand, is a whole different ballgame.
Strategies To Increase Customer Loyalty
While customer retention is more of a number game, increasing customer loyalty requires you to establish an emotional connection. Here is how you can do that.
1. Understand your customers
Consumer behavior is constantly changing, and businesses need to recognize this, understand customer expectations, and adapt accordingly.
For starters, customers of today expect personalization. In fact, nearly 60% of them agree that they would become repeat customers if offered a personalized shopping experience.
A large segment of customers prefer businesses that prioritize sustainability and are socially responsible. Highlighting these traits across your social media channels can go a long way toward building a genuine connection with them.
Transparency is another key expectation from customers. Everything from hidden charges to how customer data is used can go a long way in building trust with customers. About 19% of customers abandon their carts because they don’t trust websites with their credit card information.
Adapting to your customer’s changing needs is a sure-shot way to build genuine connections with your customers.
2. Deliver exceptional customer experience and service
The overall customer experience can go a long way in laying the foundation to gain a loyal customer.
According to Salesforce research, 74% of customers are willing to switch brands because their shopping experience is too complicated. The same study also found that nearly 50% are willing to switch to another organization if one doesn’t offer a mobile-friendly experience.
The quality of your customer service can also go a long way in converting a retained customer to a loyal customer. Statistics show that 50% of customers will switch to a competitor after a single instance of poor customer experience.
However, a positive experience will increase the likelihood of a customer recommending you by about 38%.
3. Listen to your customers
While excellent customer service is a cornerstone of building customer loyalty, it’s just the beginning. To truly understand your customers and build lasting connections, you need to move beyond one-sided interactions.
Actively solicit and listen to their feedback. Send out feedback forms and review the reviews they leave on your social media. Analyze customer interactions with your customer care department to learn what they love about their experience and where you fell short.
A survey conducted by Red Point showed that nearly 74% of customers would choose to be heard, appreciated, and understood over special offers any day.
4. Reward your customers
You can further develop customer relationships by rewarding your most ardent customers with well-designed customer loyalty programs. A whopping 64% of loyalty program participants shop more frequently and spend more to boost their point earnings, so it is not surprising that most major brands have a loyalty program.
Sukran Rewards, for example, is a loyal program offered by the Landmark Group (which is based in Dubai) across the UAE, encompassing nearly 57 global brands.
That said, loyal programs are not just about the points. Acknowledging and rewarding your customer’s continued business can go a long way in instilling a sense of value and appreciation.
You can take things one step further with member-only perks like exclusive discounts, early access to new products, or special birthday offers, which can make your customers feel like valued insiders. You can also offer tiered programs where higher tiers unlock even more benefits, further incentivizing customer loyalty.
5. Use technology to your advantage
Data is the most valuable currency you can use to further bolster customer loyalty. Leveraging it effectively will give you a holistic view of current market trends and, more importantly, help you understand each customer’s needs intimately.
Use CRMs like LeadSquared to store and analyze valuable customer data. Use website analytics tools like Google Analytics to track essential metrics, and employ social media listening tools to better understand your customers’ preferences and concerns.
Summing It Up
There you have it: five simple yet effective strategies to help improve customer loyalty for your business. As we said at the beginning of this blog, loyal customers are your biggest brand advocate, and a mere 5% increase in loyal customers can boost your revenue by a staggering 25-95%. In short, prioritize your customers above all else.
We have already established that exceptional customer service is key to building customer loyalty. If you are looking for a software solution that can help you achieve that, look no further than LeadSquared. It is an all-in-one platform that offers everything from a Sales CRM and powerful automation features to customers’ self-serve portals.
Simply put, it offers everything you need from a technology standpoint to help improve customer loyalty.
So why wait? Book a Demo with them to know more.
