In today’s world, consumers have more options than ever before. How can you become the one they go to consistently? And, is their loyalty so important?
Loyal customers are the ambassadors of your business in the world. Among them are the ones who will recommend your product or service to others, give you positive reviews, and strengthen your reputation. In terms of revenue, loyal customers are key in business success; according to Rosseta, a loyal customer delivers three times the value to a business over the course of a year.
The following 2015 statistics give us some very important insights on what drives today’s loyal customers:
– 28% of consumers are loyal to their providers and brands (Accenture)
– Engaged consumers buy 90% more frequently, spend 60% more per transaction and are five times more likely to indicate it is the only brand they would purchase in the future. All of these factors lead to engaged customers delivering three times the value to the brand over the course of a year (Rosetta)
– 73% of consumers cite price and value as the leading factor that determined brand loyalty (Support.com)
– While 89% of consumers agree that good service makes them feel more positive about the brands they engage with, 48% also said they are suspicious about how their data is used (Verint)
– Top 3 reasons consumers switch brands: cheaper pricing (31%), rude staff (18%) and too many mistakes (16%) (Verint)
– The most important driver of brand loyalty for millennials is a great product at 77%, followed closely by brand recognition and trust at 69% (NewsCred)
– 44% of millennials say they are loyal to brands they buy, and 52% will choose quality over price (IRI)
– 64% of millennials reported to have abandoned a brand because the brand was no longer unique (Lim College)
– “Fully engaged” customers (those with a strong attachment to the brand, or brand ambassadors) deliver a 23% premium over the average customer in share of wallet, profitability and revenue (Cap Gemini)
– Engaged customers are four times more likely to say they “appreciate when this brand reaches out to me” and seven times more likely to “always respond to this brand’s promotional offers.” (Rosetta)
With this in mind, let’s look at some ways in which you can foster lifelong relationships with your customers:
1) Check in with your customers
Reach out to your customers and ask them how they feel about your services. Be open to their feedback, and use it thoughtfully to enhance your business and best meet their needs.
An interesting way to measure customer satisfaction and loyalty is the Net Promoter Score. It is a management tool first published in the Harvard Business Review article “One Number You Need to Grow” by Frederick Reichheld. This system asks customers the question “On a scale of 0 to 10, how likely is it that you would recommend our company/product/service to a friend or colleague?” The simplicity of this question, standing side by side with the lengthy, elaborate, and often-times tedious customer surveys, seeks to narrow the focus of companies in actually using survey results and align employees on the task of satisfying customers to foster growth. Customers are sorted between Promoters (who answer with a 9-10 likelihood of recommendation) and are likely to buy more, more consistently, and recommend your business to others, Detractors (0-6) who are likely to be vocal about their dissatisfaction in reviews and social media, and are probable not to recommend you to others or be returning customers, and Passives (7-8) whose behavior falls in between. This measurement allows businesses to have a quantified idea on their standing with their clientele, and establish and meet their priorities of target segments and customers with a personalized plan that fits their customers’ needs. According to Reichheld, even though loyalty isn’t the only factor that influences a company’s success, it is a core element in sustained growth.
Although NPS has become increasingly popular around the world, it also faces stern criticism from academic and market research circles. Many believe that the question formulated isn’t more effective than a customer satisfaction one, its 11 point scale lacks predictive validity, and that it fails to recognize unique cultural and social tendencies that interfere with an individual’s drive to recommend a brand or product, but not with his or her loyalty to it. However you decide to check in with your customers, we encourage you to create a space where they can voice their opinions and let you in on their needs and wants.
2) Don’t compromise the quality of your product
Like the data above reflects, even though customers are driven to the best price of a product, they place great value on its quality and many are willing to pay more if it’s worth their while. If you sacrifice quality you may be able to reduce your investment, but your customer’s experience will likely suffer. A study conducted by the University of Technology in Sydney found that customer retention is highly influenced by your client’s ability to trust you which largely depends, upon other factors, on the maintained quality of the product you provide.
3) Offer fantastic customer service
Customer loyalty isn’t solely dependent on the best price. They often return to the same service provider even though it may not offer them the best deal in terms of price, because it gives them something they value even more. Great service and a positive personal experience has an invaluable impact on a customer, and it often times is a key factor in retention. The study we mentioned above determined that good customer service is one of the 4 main factors of customer loyalty (the other 3 being trust, commitment, and satisfaction.) Instill a culture of genuine customer care in your company, and encourage your employees, especially those in the front lines of your business, to offer clients a thoughtful and personal experience.
4) Treat your customers with respect
Your customer trusts you with fulfilling their wants and/or needs. Their vote of confidence must be honored by carrying your relationship with respect, transparency and appreciation. According to SDL, once a customer experiences a major customer experience failure, 64% will stop recommending the organization, start looking for an alternative brand or actively disparage the company via word of mouth, social media or other online channels. Respect your customers’ privacy by keeping their information safe, handle complaints with care and composure, consistently offer them value through your products, and carry your business with transparency.
Creating loyal customers is an art where you weave several key aspects into a web of security for them where they feel eager to return. We hope that the implementation of these tips will help you continue creating lifelong clients who feel fortunate to have you as their service provider – they surely are.