Customer is the kingpin of the market. We all know that it is an indisputable fact. Consumers have the most fundamental role to play in the success of a business. History says that businesses making customer-fit product have proven to be the most sustainable and profitable ones.
Have you ever wondered what makes a successful business distinctive from its unsuccessful counterpart? A sure answer is Customer loyalty. In layman terms, Consumer Loyalty is a measure of the willingness of a customer to repeat a transaction with a particular business or brand.
To get sustainable profit growth, every business must have customers who are loyal to them. Do you know it costs five times more to acquire new customers than to retain current ones? The data demonstrate that more than 50 per cent of loyal customers like to try out a business’s new product.
Customer Loyalty and Businesses
It is surprising that Loyal Customers embody 20% of consumers but are the source of 80% of revenue.
- Reduces Marketing Cost: Customer Loyalty makes people disseminate positive reviews of a business through one of the most effective tools known as word of mouth marketing.
It is the most viable form of advertising in which your loyal customers tell about their experience to their family and refer them, talk about your brand, and products etc., which makes the business spend less on marketing.
- Tackles competition: There is cut-throat competition among businesses having similar products. So, the only way to rise above the competition and gain a top-notch market share is to have consumer loyalty.
For example, several companies today make Smartphone, but Apple has been the most successful thanks to its customer retention.
- Drives Profits: Loyal customers never compromise on their preferred brand just because of pricing. So, when a brand gradually increases its prices, it still doesn’t lose customers, which in turn surge the brand’s profit margins.
Customer retention plays an instrumental role in driving profits higher as the more loyal customers the business has, the less its Customer Acquisition Cost is.
- Repeated Business: The fascinating part about customer retention is that it leads to repeated business. When customers become loyal, they come more frequently to buy goods and services of the brand.
Frequent buying also leads to an increase in sales per customer. Apart from this, it shortens the sales cycle of the company.
- Brand Image: Every business needs to have a brand image which in return can attract new customers and massive profits to progress by leaps and bounds.
Consumer Loyalty and Brand Image are directly proportional. More customer retention helps to gain the trust of the new ones. The positive feedbacks of existing buyers improves the brand image in the industry
How to Earn Customer Loyalty? Top Ways
- Foster Feedback A business needs to build an inextricable connection with its customers to retain them. So, asking for feedback such as their product reviews or shopping experiences is of utmost necessity.
Online reviews and social media tags are some of the best platforms to seek customer feedback. Feedback inspires the company to work on its limitations and improve the first-hand customer experience. This, in return, leads to customer retention.
- Improve customer experience A recent survey showed that 86 per cent of the customers are usually willing to pay more if they get a better customer experience. Companies must emphasize treating their customers with politeness and hospitality
Constructive customer service pays rich dividends in the future by establishing an informal relationship with customers, which leads to customer loyalty. It includes talking with respect, listening to the grievances etc.
- Providing perks One of the best ways to achieve customer loyalty is to give offers to them like discounts, free giveaways. Apart from this, a point system is gaining prominence these days.
In the point system, every time a customer purchases something, he gets some points. With the collection of points, they get rewards like shopping vouchers, free movie tickets etc. It allures them to spend more in search of perks and leads to customer loyalty.
- Subscription service Charging a monthly or annual subscription for providing services is a great tool to get customer loyalty. If the brands render a fascinating service, then customers surely renew their service because they do not get the service somewhere else.
Example: Netflix is an excellent example of a subscription service. More than 200 million users are regularly using Netflix. Its subscription-based model and breakthrough content make it able to retain its consumers.
- Building an emotional relationship Nowadays, to make customers content, there has to be an emotional bonding. Customers want to be heard, seen, felt etc. So, employees must listen to their needs and provide them with the best-suited thing.
Consumers would feel rejoiced if the employees talk to them about their professional life, needs, routine etc. The emotional tool comes in immensely handy to give them an unforgettable experience.
- Live up to their expectations Customers expect the company to fulfil their promises on time. For example, the product must be timely delivered, and after-sales services must be provided.
Fulfilling their expectations helps to build the brand image and win the trust of customers, which make them repeat their shopping experience with the company.
- Honest Information With the advancement in technology, customers have access to all the information regarding any particular product, so giving them truthful information about the product puts a positive image.
To get customer loyalty, the company also has to be loyal. Giving correct information establishes a trust factor between the business and consumer.
Consumer Loyalty has a drastic contribution in a company rising through the ranks. Customers can be the maker or breaker of a business. So, businesses had better use the techniques mentioned above to keep the customers in their yard.
The pace at which competition is growing presents a challenge to dominate the market. But, if you have loyal customers, then the sky is the limit.