Why customer loyalty matters
Business owners sometimes say that getting customers is one of the hardest parts of business.
Landing customers can be difficult, and keeping them around can be even harder. We know that offering good customer service is important, but that’s not enough anymore.
A recent Forrester report stated that nearly 95% of businesses–your competitors–said their number one priority this year is providing a great customer experience. With that many companies providing grade-A customer service, how can a small business or startup even hope to stand out?
By winning loyal customers, of course!
Customer loyalty is defined as “A buyer’s preference for doing business with a particular business establishment.” It’s the relationship between a satisfied patron and the business establishment she frequents. It can also be the relationship between a satisfied patron and the ice cream shop he comes to once each year when he visits his mother.
Customer loyalty goes beyond just enjoying the services or products a business offers. It’s enjoying them so much you’ll promote them, go out of your way to seek them, or attach them to your best memories.
Sounds great, right? But how does customer loyalty actually boost your business? Why does customer loyalty matter?
What does customer loyalty do for you?
Customer loyalty doesn’t come easily, so why should you work to earn it? How can it help your business? There are 5 main reasons increasing customer loyalty is the cure-all for any business or startup.
1. Loyal customers spread the word about your business.
Word of mouth marketing is real, and it works–we trust people we know when they recommend a service or company to us. Loyal customers truly believe in your company, and they’re not shy about sharing its greatness with anyone who will listen. This is undeniably a benefit for your business.
An example of word of mouth marketing:
My mother used to go to the farmer’s market on weekends. A friend of hers sold his produce there. She would buy a few things, and he would give her free fruits, vegetables, honey, jams, and preserves each week. I remember thinking “How is this a good idea for the man? He’s giving his items away for free every week.”
What I didn’t realize was that she would cut his hair at no charge every week, and rave about his watermelons, apple butter, and pink girl tomatoes to the hundreds of women at her beauty salon. She became one of his greatest tools for spreading the word about his business.
She was a loyal customer of his, and she showed her loyalty by actively promoting his products on a regular basis. He, in turn, was a loyal customer of hers, never going to another barber or stylist for his haircut.
2. Loyal customers stick with you no matter what.
If a customer has given you their loyalty, they stick around. They don’t visit your coffee shop a few times then stop, or visit your website for supplies every month and suddenly jump ship.
Because they like what’s at the core of your company, loyal customers will stay with you when times are hard or things are unsure.
Even if something goes wrong, loyal customers are more likely to give you the benefit of the doubt and stay true to your business.
3. Loyal customers come back more often.
Sometimes, loyal customers use a business more often than they logically need to, just to support the company.
If there’s a need for baked goods and you’re a loyal customer to the bakery down the street, you’re going to come to the bakery for any and every baked good need you have. You’ll find yourself on a first name basis with many of the employees. That’s the essence of the loyal customer-business relationship, and part of why customer loyalty matters.
4. Loyal customers can act as your focus group.
Who answers surveys or responds to social media posts requesting opinions? Your loyal customers. They don’t mind taking a moment of their time to share insight or opinions with you if they think it will help the company. Why? Because they love the company and don’t want it to go away! Keeping loyal customers around gives you a built-in focus group.
5. Loyal customers will always take your side.
Every person is faced with situations where they can’t or don’t use the company of their choice: There are only McDonald’s at this exit. This company I don’t love is having a major sale. I usually use Buffer, but this position uses Hootsuite.
However, when it comes down to it, loyal customers will take your side. What Big Mac lover has ever sung the praises of the Whopper? Even though there are always scenarios in which we won’t be able to use our favorite businesses, we’re always ready to take their side. That gives your business a competitive advantage.
Customer loyalty matters. Making customers loyal to your business helps with word of mouth marketing, customer retention, rate of patronage, feedback, and competitive advantages. How are you working to make your customers loyal? How are you working to be loyal to your customers?