Businesses need to create a loyal customer base to stay afloat and propel the growth of their brand. Especially now, we can't undersell the importance of customer loyalty efforts.
And it's important to go about it the right way, guided by your company values and a commitment to deliver for your customers. You need to earn your customers trust so they continue to support to your brand even as the market ebbs and flows over time.
What is customer loyalty and why is it important to build?
Simply put, customer loyalty happens when customers give a company repeat business over time. If you provide great value in your product or service, and the customer experience stays consistently good, then your business will reap the benefits of customer retention. That means less effort spent on customer acquisition (though of course, you'll always seek out that new customer).
Here are some statistics from our Trends Report that show the importance of building customer loyalty through good customer service.
- Loyal customers spend more: 90 percent of customers will spend more with companies that personalize the customer service they offer them.
- Loyal customers are less likely to churn: 74 percent of customers say they will forgive a company for its mistake after receiving excellent service.
- Loyal customers improve customer retention rate: 81 percent of customers say a positive customer service experience increases the likelihood they’ll make another purchase.
- Loyal customers are less likely to turn to a competitor: 76 percent of customers say they would switch to a company’s competitor due to multiple bad customer service experiences.
- Loyal customers are more likely to recommend your business to a friend and improve brand reputation: 64 percent of business leaders say that customer service has a positive impact on their company’s growth.
Here are a few ways you forge meaningful relationships with your customers and create lasting customer loyalty:
How to build customer loyalty
1. Communicate your values
Before you can increase customer loyalty, you should first understand what aspects of your brand are worthy of your customers’ loyalty. Sit down with your team and come up with a marketing strategy that outlines what makes your brand stand out, what your purpose is, and how your values align with your customers' core beliefs.
Specifically, your marketing should focus on those brand attributes that are unique to your brand and where you can stand out from your competitors. Sometimes standing out can mean taking a stand, which is becoming more common. Two thirds of customers now buy based on beliefs, according to an Edelman study. But you don’t necessarily need to get political. In fact, that might not be true to your values. Your brand values should be your guiding light. Be firm in your beliefs and communicate them authentically.
2. Provide exceptional customer service
For new and existing customers, you want to provide the best possible experience. Your customer experience includes everything about the way your customers interact with you, from the moment they first land on your website to when they call and ask your customer service team for assistance. People have high expectations, especially for customer service. A study we conducted with Dimensional Research showed that 89 percent believe a quick response to an initial inquiry is important when deciding who to buy from. Couple that with the fact that nearly half of people say they would switch to a competing brand after just one bad service experience, and it’s not hard to see why an emphasis on customer service is so important to building brand loyalty. To respond quicker to customer requests, you can start by expanding your channel offerings. Taking an omnichannel approach to customer support will allow you to provide a fast, helpful experience no matter where your customers are reaching out to you.
3. Activate loyalists to help spread the word
Once you understand your values, you can find your fan base—the most ardent supporters of your brand and its values. These consumers are your ride-or-die customers, the ones who mention you on Twitter, who tag you in their Instagram Stories and tell their friends how much they like your product or service. It’s likely a small group of highly satisfied customers, especially if you’re just starting out, but they are essential if you want to understand who is connecting with your brand and why. It’s your job to find them and learn as much as you can about them, so you can find others who fit the same profile. These people will become your brand ambassadors out in the world. You should engage with them often - you may even want to surprise an existing customer with special gifts to thank them for their loyalty, a strategy known as “surprise and delight” that can help increase retention and cultivate customer loyalty.
4. Show your appreciation with a loyalty program
To build customer loyalty, it helps to incentivize repeat purchases with special offers, discounts or perks. You might even consider creating your own customer loyalty program. There are many different types of loyalty programs, such as those based on points systems—the virtual equivalent of the coffee shop punch card. By giving your customers some kind of reward, you make them feel good about purchasing and motivate them to keep coming back. Loyalty programs like these help your customers feel valued and appreciated, while also providing valuable customer data you can use to improve your customer experience. These tactics can bolster your results in the short-term, but because they’ve become so commonplace, they can sometimes fall flat when it comes to building a meaningful relationship with your customers. You should also strive to serve your customers by creating a good customer experience and living by your corporate values. Together, these efforts can help turn repeat customers into loyal customers.
5. Connect in a deeper way
You can continue to grow the relationship with your customers by giving your loyalists a place to connect with the brand and with each other. Creating a community forum is an easy way to do that. They can share tips and tricks for optimizing the product, and community managers can continue nurturing the relationship by providing additional resources and support. Sometimes these conversations happen organically on social networks, and if so, you should take advantage of those opportunities as well. For example, more brands are creating Facebook Groups where they can engage with their most active fans. These are often successful when they focus on harnessing the enthusiasm of a niche group of supporters, like the Facebook Group that Starbucks created for fans of their signature Pumpkin Spice Latte. These types of community hubs serve the valuable purpose of engaging fans, and they can also be a tool to collect feedback and product suggestions from some of your most loyal customers and brand ambassadors.
6. Ask for feedback
If you're looking for ways to build customer loyalty, you should be asking your customers for feedback every chance you get. Customer satisfaction (CSAT) surveys are commonly used following a support interaction, and they give you an indication of how happy your customers are with the help they received. You can also ask your customer service team members to share anecdotal feedback about how customers are responding or common issues they are encountering in the tickets they work on. Beyond surveys, you can also look at social media activity or analyze online reviews. No one likes to get negative reviews, but negative reviews can actually help you because they pinpoint the exact areas that need improvement. Plus, taking customer feedback seriously shows customers and prospects that you care about them and are committed to providing a good experience. This can help increase satisfaction and build loyalty.
7. Continually improve your customer experience
To drive customer loyalty, make this a continuous process of evolution and improvement. The world is constantly changing, so you should be checking in with your brand identity and values regularly. While your values shouldn’t change drastically, your positioning should match the mood of the moment. As new people join your community, you might also want to refresh your messaging or develop communication strategies for multiple audiences. You should always have a finger on the pulse of your customer experience, which means talking to your customers and asking for their feedback frequently. Pay close attention to customer complaints, because those are warning signs about the health of the customer relationship. Customers’ behavior and channel usage can change seemingly overnight, and you want to be ready to pivot and meet them where they are—wherever that might be in the months and years to follow.
Building customer loyalty is really about building relationships. As with any relationship, it takes time and effort to establish trust, and an ongoing investment to keep the relationship afloat. Loyalty and retention can’t just be bought—they have to be earned. To improve customer loyalty, look to your customer experience and do everything you can to make your customers’ lives easier and hopefully, more enjoyable.