Revealed The Secret of Customer Loyalty

Growing customer loyalty is not about gimmicks. It’s much more powerful and profitable than that.

There are only two businesses to which I’m genuinely loyal – my hairdresser, and
I am pretty typical of most people today. I go where I think I can get the best deal and the quickest, easiest service. Loyalty counts for little.

The phenomenal growth of the Internet has much to do with it. We can order things online from the comfort of our own home, the price is good and the products get delivered to our door. As a means of purchase, it’s very compelling, albeit extremely impersonal. The result is a society where customer loyalty is disappearing fast.

Sadly, there is very little which distinguishes any retailer or business these days – they all have similar products or services on offer; and prices are sharper than ever. Few stand out as creating great experiences for their customers – the norm is frustration.

It’s an interesting exercise to try and name some businesses to which you are genuinely loyal. Chances are you may only come up with one or two examples or you may have difficulty naming any!

So how can your business survive in this modern world where customers can disappear at the drop of a hat? How can you buck the trend and build genuine customer loyalty?

Take the two businesses to which I’m genuinely loyal.

First, my hairdresser. He does an excellent job, is a good conversationalist, takes an interest in what I’m doing and how I look. There are plenty of other hairdressers. Some of them may be cheaper. But I always return to my own hairdresser because he makes me feel good. He could put his prices up a dollar or two and I would still keep going back. It’s a relationship that we both value.

Another example is They do things for me that no other bookshop has ever done! Their shopping process is streamlined, incredibly quick and easy. I enjoy shopping at Consequently, I now spend more money on books than ever.

There’s a common theme. Both these businesses pamper me, anticipate my needs, and treat me like royalty. The truth is, customer loyalty is mainly about feelings and emotions. It’s not about price.

And don’t confuse customer satisfaction with loyalty. Many companies count on customer satisfaction as a guarantee of future success. But they are becoming increasingly disappointed to find satisfied customers may shop elsewhere without a moment’s hesitation. Harvard Business Review reports between 65 and 85 per cent of customers who chose a new supplier say they were satisfied or very satisfied with the former one.

Loyalty goes deeper than satisfaction. Loyalty is an emotion. A feeling. Above all, it is about building a genuine relationship with the customer, which the customer values. And you don’t need gimmicks or so-called loyalty programmes. Unfortunately, many businesses seem to have given up trying to grow genuine loyalty, which is why we have all these gimmicks around.

Loyalty cards don’t create loyalty. They may entice customers back, but this is only to get a cheaper price or collect points for a future discount, not because customers are emotionally attached to the business.

One of the biggest mistakes most businesses make today is using loyalty programmes to try and win new customers. Instead, they should focus their efforts more on building loyalty with existing customers.

Remember it’s how you perform after the customer buys that determines whether you keep them as a loyal customer. On average, it costs at least five times as much to acquire a new customer, as it does to retain an existing one. So it makes sense to do everything possible to create an ongoing relationship with the customers you already have. A loyal customer is less likely to be lured away by a few dollars discount.

Loyal customers will spread the word about your business to their friends and associates – the most powerful form of advertising you can get. And it’s free. Invest time and effort into building customer loyalty and you will reap the benefits long term by having to spend much less on advertising to bring in new customers.

The key to building customer loyalty is to look after the people who work for you, so they, in turn, will take care of your customers. Take time to find the right people. And once you have found them, look after them the way you would like them to look after your customers.

Follow up with customers to find out how they feel about your company. Most unhappy customers won’t complain directly to you but they will complain to just about everyone else they know, and take their business to your competition next time. Make follow-up calls or mail feedback questionnaires after the sale.

In fact, research suggests people whose complaints are properly dealt with may become more loyal customers than those who have never experienced problems!

The good news is that people, by nature, like to be loyal. It is a fundamental human need. We want to belong. We are tribal and social by nature. The key for your business is to provide an experience that your customers enjoy and value so much, they’ll go out of their way to keep coming back.

Chris Bell is managing director of Customer Experiences; a company that specialises in helping businesses improve the way in which they interact with customers and clients. Click here to contact us.