Customer Loyalty, and its Importance to Your Business
The business landscape has changed irrevocably with the end of the last financial year; consumer spending is set to tumble following an attack on the average cost of living, while overhead costs for businesses are set to skyrocket. With new customers projected to be thin on the ground in the coming months, customer retention has become more important than ever – and engendering loyalty in your customers is the most effective way to do just that.
The Importance of Customer Loyalty
Customer loyalty is a deeply important aspect of running any company. Customer acquisition is a difficult process, and a costly one as far as marketing and sales outreach are concerned. Failing to keep customers returning for more will result in an inefficient and expensive business model; meanwhile, enacting appropriate customer retention strategies to ensure customer churn rate is kept low can have multiple positive effects on your business.
Firstly, and perhaps most importantly, regular customers happy with your service are a ringing endorsement in and of themselves, and their word-of-mouth or review testimony can win you even more business. Secondly, cultivating a core cohort of regular customers can provide you with a solid financial base on which to build your profits.
Keeping Customers Loyal
There are a number of approaches you can take when it comes to cultivating customer loyalty, and some will come naturally. Whether B2C or B2B, your business will be conversing directly with customers and clients; this point of contact is crucial to the retention of customers.
You could also be offering unique perks and benefits to existing customers, which you can telegraph in a number of ways. If you have store branches on the high street, you could promote these customer benefits through printing and distributing posters as a visual reminder of the perks of repeat custom. One more refined approach to customer loyalty can be found in the form of the loyalty program – a unique retention strategy that encourages loyalty with the promise of exclusive rewards.
Loyalty programs come in many different shapes and sizes, and you will be well-familiar with the concept already as a result. Perhaps the most common example of a loyalty program is that of a coffee shop stamp card; each coffee earns a stamp, and the tenth stamp garners you a free drink. There are also more involved forms of loyalty programs such as the Tesco Clubcard. Membership alone grants you exclusive discounts and offers on products, while you can accumulate Clubcard points to spend in place of currency.
Each kind of loyalty program has its own benefits, depending on the kind of business you are running. As an extreme example, the points-based loyalty card concept works well for major supermarkets that make their profits on volume sales but would not work for a small B2B contracting firm. Instead, a contracting firm might benefit from directly offering an upgraded service after a set number of jobs are completed for a client.