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There is a difference between repeat buyers and loyal customers. The former regularly buys from you, while the latter does the same even though your competitors’ products or services may be cheaper or better.
You want to pursue the latter, of course. After all, the more loyal customers you have, the more predictable and established your business becomes.
The excellent news is that nurturing customer loyalty doesn’t have to be rocket science. By putting together sound customer retention strategies, you can foster customer loyalty and be on your way to Revenue Wonderland.
Customer loyalty is built on trust. It is a deep relationship between customers and companies forged through meaningful encounters often initiated by the brand through showing genuine concern and a sincere desire to help its customers.
Just like any meaningful relationship, customer loyalty isn’t built overnight. You need to show care, create a sound plan, and foster a reliable and repeatable strategy to produce an excellent customer experience. The more pleasant your customers’ experiences are, the higher your customer retention rate becomes.
Loyal customers can do wonders for your small business. Below are some of the benefits you can enjoy for putting a premium on customer loyalty.
Selling to existing customers is easier and less expensive. You don’t need to educate them about your products; they’ve already bought and used them. You don’t need to prove your trustworthiness because they’ve already experienced it firsthand.
The same can’t be said if you’re trying to win new customers. You still need to establish that your company is legit and that your products are easy to use and worth purchasing.
Studies show that acquiring new customers is five times more expensive than retaining existing ones. This highlights why investing in brand loyalty is essential. Not only is it good for sales, but it works like magic on cost reduction, too.
Loyal customers can spend 70% more than first-time buyers. The main reason? Trust.
These customers are likely to return to your store, purchase more, and recommend your products to friends and family. All these can boost your referral traffic, increasing conversions and sales opportunities.
Loyal customers aren’t indifferent to the brands they support. They talk about them on social media, blog about them, and take the time to share valuable feedback to the company about the product or service they received.
New customers, on the other hand, often do not care enough to share their feedback. As far as they’re concerned, it might be their first and last purchase or interaction with the brand, so there’s no point in investing time to share what they think of your products.
When implemented correctly, reward programs can draw in new customers and skyrocket your sales — after all, they nurture customer loyalty. Consider these initial steps for building an effective customer loyalty program.
Create a loyalty program that resonates with your audience. Do this by offering customer rewards that your shoppers love. To know what’s important to your customers, use these tips:
You can build on and develop basic types of reward systems based on your customers’ and business’ needs. Here are some of the common types of customer loyalty programs.
Not every type of client retention program can work for your business. Use one that resonates well with your customers so they won't think twice about participating.
Base your rewards on interactions that help move your customers along your conversion funnel.
Consider these action-based rewards when building your customer loyalty program.
Instead of creating generic loyalty programs, customer segmentation allows you to personalize so your programs become more relatable and enticing. Segmentation also lets you tailor your program’s mechanics to your customers’ preferences, letting you send the right message at the perfect time.
Use robust and feature-packed software to streamline your customer loyalty program. With the right software, you can track your results and tweak and optimize your campaigns.
Also, be sure to use intuitive software. If your loyalty programs are housed on software that's complex and clunky, you immediately discourage your customers from participating.
Take inspiration from these well-executed customer loyalty programs.
Starbucks' app-based loyalty program inspires customer loyalty and helps the company collect customer data to refine its marketing and sales strategies.
It’s a great example of incentivizing customer purchases, centralizing transactions, and learning more about customers to improve your loyalty program and marketing approaches.
Beauty brand Sephora exemplifies using a loyalty program to build connections with shoppers through a private community. The brand’s Beauty Insider program offers different reward types that appeal to its customer base, from membership discounts to product samples and events.
The program also nurtures a community, a space for beauty lovers to get inspiration and tips from other members. It’s an excellent way to build communities, keep customers interested in your products, and build loyalty.
You don’t always need to fight tooth and nail to generate sales. Your loyal customer base is more than willing to support you by telling its network about your products and buying. That’s why you need to grow your loyal customer base -- you gain so much from having them.
Build upon the tips shared above. As you personalize and implement the strategies to fit your business dynamics, you are bound to generate more sales.
Our Small Business Expert
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