5 Ways to Build Customer Loyalty and Retention
One of the most important things to understand about customer retention and loyalty comes down to the fact that, according to one recent study, the probability of selling to one of your satisfied, existing customers is between 60% and 70% on average. The probability of selling to a new customer, on the other hand, is between 5% and 20%.
When you also consider the fact that it literally costs about five times more to attract a new customer than it does to just keep an existing one, it’s easy to see why both customer loyalty and retention are two concepts that are critical to your long-term success as a business.
But how do you lay the groundwork necessary to support and empower these two pivotal concepts? Thankfully, building customer loyalty and retention isn’t necessarily “difficult.” It is, however, a very precise process that requires you to keep a few key things in mind.
1. Offer a Great Product
This particular point may seem a bit obvious, but at the same time, it’s also by far the most important when it comes to establishing long-lasting and mutually beneficial relationships with the members of your target audience.
In no uncertain terms: every other element of your business could be objectively perfect by every conceivable metric you choose to use, and it ultimately wouldn’t mean a thing if you’re not offering a product worth being loyal towards in the first place.
It doesn’t matter what type of business you’re running or even the industry that you’re operating in – if your product is of poor quality, customers will not continue to purchase from you. At best, they’ll go searching for a competitor who offers a similar solution in a better way. At worst, they’ll realize that they never actually needed what you were trying to sell them.
If you fail to offer a great product, every other element of your brand is going to suffer – from your reputation to your customer service efforts on down.
Therefore, you need to focus on the product first. Once you have that under control and the quality level is where it needs to be, THEN you can move onto the rest of the items on this list.
2. Focus on Customer Service
These days, your relationship with your customers doesn’t end as soon as they’ve made a purchase. In many ways, it’s just beginning.
Modern customers want to know that if they have a question, there is a source that they can go to for the answer. If they have a problem, there’s someone they can get in touch with for a solution.
In other words: if you’re not willing to put in the extra effort to be loyal to your customers, why should they, in turn, be loyal to you?
Not only that, but customer service can also easily be a key value differentiator in a marketplace that is growing more competitive all the time. This is especially true in the “instant gratification, on-demand” world that we’re now living in.
There are probably many companies that offer products and services that are similar to yours, with more cropping up all the time. Therefore, if the products themselves aren’t what separates you from your competitors, the level of customer service you show AFTER that purchase is made needs to step up and fill that role.
Not only have people shown that they’re more willing to do business with a brand that has an excellent reputation for customer service, but their customer lifetime values also tend to be higher – making this one element that you’ll absolutely want to pay close attention to in the future.
3. When in Doubt, Be Authentic
Consumers are being bombarded by marketing messages during virtually every second of every day. It’s easy to take a cold and cynical approach to the world around us. But because of that, whenever a brand does go above and beyond to break free from that image, people can’t help but sit up and start paying attention.
People value authenticity in companies – more so than almost any other quality aside from that organization’s products and services themselves. Therefore, the more authenticity you’re able to show whenever you have the opportunity to do so, the more likely it is that you’ll improve both customer loyalty AND retention in one fell swoop.
If you make a mistake, don’t try to pretend it didn’t happen – fess up and show people that you understand what happened and how you’ll do better in the future. Take meaningful steps to address or correct any negative criticism. Go directly to the people and ask for feedback. Let them know you value their opinion and you will be rewarded in kind.
4. Build Trust Whenever You Can
People aren’t going to be loyal to a brand that they don’t feel they can trust. In the world of business, respect isn’t a given – it’s earned. You need to do that by SHOWING, not TELLING people that you’re worthy of that trust and you need to be proactive about doing this on a regular basis.
Note that oftentimes building trust is less about any one major move and is more about a series of smaller ones. Do what you say you will and if you make a promise, do whatever you have to in order to keep it. Always stand by your product because if you can’t believe in it, why should anyone else? Fix problems as they arise and show people that you care just as much about continuous improvement as they do.
All of this will go a long way towards showing consumers that you’re worthy of their trust… and their loyalty.
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5. Communication is King
Finally, we arrive at the topic of communication – something that far too many brands don’t pay nearly enough attention to until it’s too late.
Communication isn’t just about keeping people in-the-loop – it’s also about setting expectations to avoid disappointments, frustrations or worse.
If there’s going to be a delay in your next big product launch, hey – it happens. But tell customers when this is the case, especially in terms of shipments they’ve already paid for. If things are ahead of schedule, tell them that, too.
You’d be shocked by just how much open and honest communication can buy you, particularly with today’s modern consumer.