8 Ways to Earn and Build Real Customer Loyalty for Your Business

8 Ways to Earn and Build Real Customer Loyalty for Your Business

No matter the size of the business, customer loyalty is incredibly important. Repeat customers spend up to 67 percent more than new customers. Plus, it’s up to ten times more expensive to attract new customers than to keep the ones already doing business with you. If you’re looking for real ways to create and maintain customer loyalty, consider implementing these strategies.

What is customer loyalty?

Customer loyalty is the measurement of a customer’s willingness to continue engaging and purchasing your product or service. Building customer loyalty improves the lifetime value of current customers, which can make up most of your consistent revenue. It also helps bring in new customers, as happy customers are more likely to recommend your product or service to others.

How to measure customer loyalty

Measuring customer loyalty goes beyond whether customers stay or go. To truly measure loyalty, you need to understand the intent behind repeat purchases, how often and when customers stop purchasing, where they make purchases, and how satisfied they are with each transaction.

While every business will use different metrics to answer these questions, here are the best ways to measure customer loyalty.

Customer satisfaction levels

There are five levels of customer satisfaction:

1. Not satisfied: customer needs were not met.

2. Slightly satisfied: some needs were met, but not most.

3. Satisfied: customer got what they expected.

4. Very satisfied: customer got what they expected plus pleasant surprises.

5. Extremely satisfied: customer’s expectations were completely exceeded.

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Gauging customer satisfaction levels can come from star ratings, reviews, surveys, and customer interviews. Start simple, like sending an email asking for a rating/review after a purchase. Then follow-up with a request for a more in-depth interview if the feedback is either very positive or very negative.

Churn rate

Your churn rate is the percentage of customers who cancel or do not renew their subscriptions. Analyzing your churn rate through the lens of customer satisfaction helps uncover why customers are leaving. Provide incentives like a cancelation survey or a one-on-one interview to gather more information.

Customer lifetime value

Your customer lifetime value (CLV) tells you how valuable a customer is based on their entire relationship with you. Focusing on increasing the value of existing customers can guarantee growth and improve the chances of gaining new customers through referrals.

Repeat purchase rate

The repeat purchase rate is the percentage of customers that come back to buy your product or service. It helps define customer loyalty and can guide you in building customer relationships. Analyze the purchasing habits of your most loyal customers to determine the best times to push out promotions or reminders to other customers.

Affiliate purchases

Affiliate marketing involves businesses and individuals earning a commission for sharing information about another company. Assess the return from affiliates to determine if you should continue leveraging that relationship. Popular methods of affiliate marketing include affiliate links, exclusive coupons, and social sharing.

How to build customer loyalty

Knowing the tools and metrics for analyzing customer loyalty is just the first step. Now, develop a method for building customer loyalty. Here are a few steps to get started.

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1. Improve your customer experience

Customer service matters. A survey in 2021 showed that 86 percent of customers were willing to pay more for great customer service. Identify areas for improvement and go above and beyond for your customers.

2. Determine the best communication channels

Know which platforms and methods of communication are right for your customers. Email, social media, webchat, and phone calls each have their strengths and should be used accordingly.

3. Develop a reward program

Implement a rewards program to incentivize customer loyalty. Point programs, spend programs, tiered programs, and exclusive VIP programs are common options.

4. Offer a head start on rewards

Give customers a head start on a loyalty program by providing initial rewards or incentives. This encourages them to stick around and complete the program.

5. Seek out customer feedback

Seek feedback from customers through surveys, phone calls, and online reviews. Respond to both positive and negative feedback and reward customers for their positive contributions.

6. Consider different payment plans

Offer payment plans or other flexible options to accommodate customers’ needs. Different payment methods like ApplePay or PayPal can also improve convenience.

7. Maintain voice, tone, and language at every touchpoint

Consistency in your brand’s voice, tone, and language is crucial. Positive language, tone, and visuals should be maintained across all customer interactions.

8. Give customers a reason to be loyal

Create excitement around your products and services. Make product reveals, sales, and launches exclusive events to enhance the customer experience.

Investing in customer loyalty now will lead to future benefits. Focus on providing a positive and memorable experience for your customers, which will result in happy customers, positive reviews, and strengthened loyalty.

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