The latest guide in our Business High Five series, The SME Guide to Building Customer Loyalty, offers useful insights on how to keep customers coming back and staying loyal to your business.
In this guide, your SME will gain insights into the following:
- The Importance of Customer Loyalty
- How to Measure it
- The Six Stages of Loyalty
- Steps to Retain More Customers
- The Future of Customer Loyalty
The Importance of Customer Loyalty
Customer loyalty is the act of continually choosing one company’s products and services over its competitors. Customers that are loyal to one business are not readily influenced by price or availability. When necessary, they are prepared to pay extra to obtain the same high-quality service and product they are accustomed to.
High levels of customer loyalty help drive business drive growth in a number of ways:
- Returning customers spend more
- Loyal customers refer their friends, helping to acquire new customers at lower costs
- Both of which lead to increased profitability
How to Measure it
Loyalty isn’t a concrete concept, yet it can still be measured. To do so, it’s often necessary to employ a variety of metrics. Some of the most practical examples are:
Customer Satisfaction Levels
Two easy-to-implement and understand methods of measuring customer satisfaction are:
- Word-of-Mouth referrals
- Net Promoter Score
Your customer lifetime value (LTV) reflects how important a client is to your company throughout their relationship with you.
Repeat Purchase Rate
The percentage of clients that return to buy your product or service is known as your repeat purchase rate.
Six Stages of Loyalty
On the journey to becoming truly loyal to a brand, a customer typically progresses through six phases, with each stage demonstrating an increasing level of loyalty.
Steps to Retain More Customers
You can increase customer loyalty by excelling at the things that influence it. Here are five essential factors that drive loyalty:
- Offer a 10X better experience than competitors
- Make customers feel valuedÂ
- Understand the full consumer journeyÂ
- Long-term planning, not quick fixes
- Employee experience
The Future of Customer Loyalty
Today, instead of going to the local shopping mall, 85% of customers start their search on Google. Customers may compare costs across all businesses online by just entering a description of what they wish to buy. They may get it delivered the next day with just one click. Customer loyalty driven by traditional influences is fading as competition rises.
The most successful businesses will be those that truly understand their customer’s needs & focus on providing the best customer experience.
