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How to improve customer loyalty

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Last editedApr 20212 min read

As a business, you should aim to value your customers as much as they value you. You want to build a brand that customers trust, and one that they’ll keep coming back to. With that in mind, focusing on building and maintaining strong customer loyalty is essential to any business with a goal of growth.

Customer loyalty definition

What is customer loyalty? Customer loyalty refers to an ongoing relationship between a customer and your business. A loyal customer is one who trusts your business and will always choose your product or service over competitors in the market. More specifically, customer loyalty measures the spending power of customers and is an indication of how much and how frequently a customer will make repeat purchases.

Why is customer loyalty important?

There are plenty of benefits of customer loyalty, but perhaps the most important is that there is a direct correlation between customer loyalty and retention. Customer retention refers to a business’s ability to retain its customer base over time. This is a measurable attribute and one that is hugely important towards the survival and growth of a business.

As a matter of fact, businesses would be wise to prioritise customer retention over customer acquisition, as it offers far more potential for success at a much lower cost. Engaging with new audiences is important, but can be quite costly, and you’ll find that it’s both easier and cheaper to establish an ongoing relationship with the customers you already have than it is to find new ones.

So, you want to hold the attention you’ve already gained, and building customer loyalty is absolutely essential to doing so.

Focusing on customer loyalty and retention means that you’re far more likely to get repeat purchases from your customers, driving sales and revenue, but the benefits of customer loyalty go further than the direct financial benefits. When you keep your customers satisfied, they’re far more likely to promote your brand to their friends and family. Building a strong relationship with your customers can lead to customers becoming what some call evangelists, brand ambassadors, or Net Promoters.

The happier a customer is with the service or product you provide, the more likely they are to spread the word.

How to improve customer loyalty

To form a strong relationship with your customers you need to really understand them and their customer journey. You can use Customer Relationship Management (CRM) tools and platforms to gain a better understanding of how to interact with customers using real data, insights and analysis.

CRMs can be used for managing email marketing, which is a great method for building customer loyalty. CRM platforms help you automate customer interactions, and track buying patterns, among many other customer loyalty solutions. 

You might consider measuring customer satisfaction using a CSAT or Net Promoter Score survey, which will give you insights into the strengths and weaknesses of your brand and reveal how likely your customers are to recommend you to others.

Understanding how to measure customer lifetime value (CLV) will also offer you a better understanding of your customers’ journeys with your brand. When you know how to tailor customer experience for different customer journeys, you can create a more personalised, relevant experience that will help your customers feel valued.

A lot of the time, it simply comes down to treating your customers well. Making sure you offer excellent customer service will make a massive difference. Your customer may enjoy your product, but they can still be unhappy with their interactions with your business, and this would be hugely detrimental to customer loyalty. Strong communication is key.

It’s important to emphasise how much you value your customers. You may do so through customer loyalty programs, schemes or discounts for repeat purchases, incentivising further interactions to show you appreciate their support. Referral programs are a great way to reward your customers for their support while targeting new acquisitions at the same time.

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