In the minefield of marketing, growth is everything: we talk about acquisition of new customers on a daily, if not hourly basis. Yet what about the people who helped you even be a business in the first place? The satisfaction of your current customers is just as paramount to growing your business and we want to flip the discussion to recognise their vital role. Marketing is all about building a relationship, you can’t start a relationship and then stop putting the effort in with them - it needs to be maintained.
How loyal is the average customer?
Competition for most products and services is fierce. How do you stop your customers hunting for the cheapest or the newest option? If there is no incentive for a customer to come back to you, what reason do they have to stay loyal?
With the birth of price comparison websites, consumers have more ability than ever to scrutinise your product or service against everything else on the market and they will shop around unless they have a clear reason to stay with you.
Loyalty is low - you need to put in the work to keep people with you.
You need to increase their switching costs, making it more difficult for the consumer to want to leave the benefits your brand has to offer. Of course, it depends on your industry as to how loyal people are; energy and finance demonstrate low levels of loyalty with customers constantly switching providers to get the best deal. However other industries such as supermarkets and mobile phone companies tend to hold on to their customers.
Once you’ve got a customer’s loyalty, you put yourself miles ahead of your competitors. 61% of customers will go out of their way to buy a specific product because of their loyalty to the brand. Therefore, creating and implementing a loyalty strategy is vital.
Benefits of loyalty
The higher cost of acquisition – It costs between 5% and 25% more to acquire a new customer than to sell to an existing one. Yet increasing your customer loyalty by just 5% can boost your profits by 45%. Rewarding and encouraging loyalty pays off - big time!
Creating brand advocates – Loyal customers provide one of the most traditional yet beneficial forms of marketing - word of mouth. They share their positive experiences, promoting your service or product to their friends, family and colleagues. This can be more powerful to their friends and family than any advertising campaign.
Customers feel valued – With a loyalty strategy, customers feel a connection with your brand. The deeper this connection becomes the more loyal they will be.
Steps to help you increase loyalty
Understanding your customer base – You need to get to know your customers - their likes, dislikes, and shopping habits. The more information you have, the more targeted your communication can be. This makes your customers feel special and valued.
Communication and reassurance – Do you take your customers for granted? Do you keep in contact with them? Do they see your brand? You can’t just expect them to return. If your brand isn’t in front of them, their loyalty may well be tested. They could have their heads turned by a competitor, easily.
Data effect – Loyalty schemes are one of the best ways of collecting customer data - allowing you to offer products or services customers are interested in. Do you reward your loyal customers before you scout for new ones?
Money, money, money – Loyal customers buy more and are often willing to pay more, which boosts your revenue. By increasing loyalty, you can also increase profitability.
Personalisation really is key – Using personalisation not only within communication but also throughout your customer’s shopping and buying process can make customers feel valued and show that you understand their product or service needs. You’re demonstrating that you value their custom and they’re not just a number. One size doesn’t fit all.
At Sixothree, we provide our clients with the strategies and tools to not only acquire new customers but also to keep their existing customers loyal. Talk to us for a review of your acquisition and retention strategies and see how we can help you to keep your customers coming back for more get in touch today.