Customer loyalty consists of retaining won customers, who continue to buy your products or services thanks to the positive experiences they have had with your company. For this, a set of satisfactory interactions is necessary, which will develop a long-term relationship of trust with the clientele.
Did you know that retaining customers can cost up to 5 times less than getting new ones? Still, 44% of companies focus on acquisition, and only 18% focus on retention. The data, compiled by Invesp , shows that retaining customers can bring benefits to the business, but that despite this, actions of this type remain little explored .
One of the main ways to retain consumers is through customer loyalty. In times of crisis , such as the one caused by the Covid-19 pandemic in 2020, this is even more important. After all, any loss of income is detrimental.
If you don’t know where to start, or you think that customer loyalty is a difficult thing to achieve, we’ve put together this comprehensive article to keep you up to speed on the subject, from theory to practice. Join us!
What is customer loyalty
Customer loyalty is a process that consists of developing a positive relationship between consumers and the company, so that they return to buy your products or services.
A customer is loyal based on a set of successful interactions with your business. In this way, a relationship of trust develops, little by little, that needs to be nurtured over time to maintain itself.
One of the main reasons why it is worth investing in customer loyalty is the fact that selling to current customers is faster and cheaper than doing the entire acquisition process, from Marketing to Sales. But there are many other reasons to go for this strategy. That’s what we’ll talk about in the next topic.
Why is customer loyalty important?
You sell for the same customers
A loyal customer will certainly buy from your company again when they need it. After all, if he has had a positive experience with your product or service, why take a chance on the unknown? And the best thing is that the acquisition cost of this customer, which is already in your base, is much lower compared to that of a consumer who buys for the first time.
You get recommended to friends and family
Your loyal customer has great sales potential. This is because if he had a good experience, he will recommend your products and services to friends and family. This is called Referral Marketing and later you can make a Marketing program of Affiliates .
You have more predictability of income
What company wouldn’t like to have a predictable income? Well, I know that one of the ways to do it is through loyal customers. This can be done by studying how often current customers buy, how much they spend, and how many people they refer.
You receive suggestions for improvement
A loyal customer is more willing to share opinions with the company. Since loyal customers often consume your products and services, they can help you by providing feedback and suggestions for improvement.
Customer loyalty in practice: 5 tips to start now
Now that you know, in theory, what customer loyalty is and what are the advantages of it, see how to implement this strategy in your company in 5 steps.
1. Invest in customer service
customer service can be the first step towards customer loyalty. Still, there are companies that still do not pay due attention to this strategy.
To differentiate yourself in terms of service, you must have a trained team that understands how you would like to be served as a customer, adapting its approach according to the needs of the clientele.
In addition, it is important to offer multiple channels, such as chat, phone, email and social networks, to facilitate contact and respond quickly.
2. Customize communication
Not all clients are the same. So, invest in customization. Not only in assistance, but at any point of contact with customers, use the available data to your advantage.
In this way, it will be possible to improve the relationship, humanize your brand and establish a closer relationship.
3. Learn to listen
Another way to retain your customers is to listen to them. This can be done by paying attention to the customer, but also with specific actions, such as:
- Market research
- Careful reading of comments on social networks and on claims websites
From these feedback from different channels, you can work even harder to meet needs and retain customers.
4. Create loyalty programs
Beyond the loyalty card, there are several customer loyalty programs that your company can use. One is the scoring system, which allows the customer to exchange points for rewards, be it a discount or another exclusive benefit.
Another tip is to choose, among your clients, those who can be considered VIP. These customers can be treated differently, with discount coupons and other benefits in a loyalty club. In addition, they can receive first-hand the next launches of your brand, for example.
5. Help the customer to make good use of your product or service
Your relationship with the customer should not end the moment they make a purchase. After purchase, steps should be taken to ensure that you are making the best use of the purchased product or service. By seeing that the acquisition makes a difference in their day to day, the client can buy from you again.
How can the company operate here? Educate the customer about the product. This can be done by producing content, sending helpful materials to customers to get the most out of what the product or service has to offer.
How to control customer loyalty?
If you measure all the shares of your company, customer loyalty should be no different. With monitoring, it is possible to constantly optimize the strategy and know if you are giving results.
Here are some metrics that help measure the effectiveness of this work:
Net Promoter Score (NPS)
The NPS is that super famous metric that lets you quickly know if your customers are satisfied with their purchase. For that, they only need to answer the question: “on a scale of 0 to 10, how much would you recommend our company to a friend or colleague?”
Then, you can divide your clients into notes:
- 0 to 6: detractors
- 7 to 8: neutral
- 9 to 10: promoters
Then, just apply the percentages of customers in each of these categories in the following formula:
Promoter Net Score =% Promoter Clients -% Harmful Clients
The buyback index lets you know how many of your sales in a period were closed by someone who already bought your product or service. Let’s say you made 100 sales in a month. If 40 of these were made by new customers and 60 by those who have already bought at least once, then your buyback rate is 60%.
You don’t need to use only quantitative indicators here. The in-depth interview can also be done with some customers to understand how loyal they are to the brand and why it happens.
In addition to these tips, there is much more you can do to build customer loyalty: some of the actions are identifying retention points, reducing churn, and improving long-term retention. Many of these points can still be mapped in the purchase process, identifying customer needs and adapting your after-sales service.
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- Digital Marketing Strategy