Investing in customer retention and loyalty rather than acquiring new ones is a proven business strategy. Customers can be retained for 7 times less money than new ones, according to a well-known statistic from Bain and Company. Additionally, companies that increased their spending on customer retention over the past 1 to 3 years achieved a 200 percent higher probability of increasing their market share!
According to Accenture, businesses that invest in customer loyalty programs generate an additional 12 to 18 percent in revenue over those that do not.
What drives customer loyalty
Good customer service
Whether a customer contacts a company via phone, chat, email, or in person, their experience with customer service influences how much money they are willing to part with and how much time they are willing to invest in a brand. In order to keep customers happy, it is important that your customer service team prioritizes and responds to their concerns. A poor customer service experience can also hurt your brand’s chances of attracting new customers and retaining existing ones.
Asking for feedback from customers
Customers will form an opinion about your products after using them. The best way to find out how they feel about it is to give them a way to communicate with you. These insights can be useful in a variety of ways.
Some opinions may account for why they leave the product in the future, or they may be input from more experienced users on how to enhance the product.
Nike, for instance, is a good example. Using a different Twitter handle, the brand responds to customers’ questions and comments in real-time. Previously known as Nike Support, Nike’s Team responds to all of Nike’s customer service-related tweets. In addition to being prompt, the answer is courteous and professional. As a result, the dissatisfied consumer is less likely to vent, and the open nature of the medium encourages others to do the same.
Use social media to thank your most loyal customers.
Once you’ve provided your consumers with a platform to share their thoughts and opinions, you’ll want to reward them for their support by making them feel appreciated.
Users of social media sites such as Instagram and Twitter have a forum for expressing their individuality, allowing them to share their thoughts and deeds with their friends and followers.
In addition, you can utilize these tools to stimulate customer engagement by displaying user-generated content on your website (UGC). When customers are rewarded for engaging with a company on social media, they are more likely to spread the word about it.
Frank Body, an Australian skincare line, makes use of Instagram to interact with and recognize its customers and followers. In order to be featured on the official Frank Body Instagram page, customers are invited to post images of themselves using the products in question.
Reward and incentive programs are a great way to drive customer loyalty.
Indeed, clients can be loyal to you but still switch to a rival brand that is less expensive or newer. If you want customers to stick around, you have to provide them with a reason to do so. So, it’s necessary to have various ways to retain customers apart from your new offerings.
Essentially, your consumers will be more likely to return to your business if you have a reward program in place for them.
The Beauty Insider program at Sephora is one of the most renowned customer loyalty programs in the world. According to Sephora’s VP of Interactive Media Bridget Dolan, 80 percent of all their transactions are now facilitated through the Beauty Insiders program.
(Download Whitepaper: How to Influence the Customer Journey for Better Business Outcomes)
Marketing strategies to drive customer loyalty
The customer experience (CX) is a competitive differentiator for forward-thinking brands because it increases customer retention levels. With a CRM system, you can ensure that your customers are getting a scalable, consistent, and unique experience. Understanding your customers is essential to customer experience, and data is essential to understanding your customers. Using a CRM system, you can build more personalized customer experiences by storing all of your customer data in one place.
Feedback loops for customers
Another easy strategy to increase customer loyalty is to implement a customer feedback loop. A consumer feedback loop is not a tool. When customers offer positive or negative feedback, it’s important to respond to them in a relevant way. The simple act of noticing a client’s concern and striving to resolve the problem has saved or strengthened many customer relationships.
Customer account management teams
Customer management teams are all about building and maintaining strong relationships with their customers. You can utilize them as a point of contact between clients or customers and your sales, support, and customer success teams to keep customers committed to your brand.
In order to promote long-term client relationships, tiered loyalty incentives focus on classifying consumers into specific levels (or tiers) depending on parameters that you establish (usually, this metric is quantity purchased or the number of referrals made).
Customer loyalty can be enhanced through gamification, and many organizations incorporate some form of gameplay into their entire customer retention strategy. Gaming is used by organizations to encourage short-term behavioral adjustments that they believe will lead to long-term behavioral shifts.
According to a recent LoyaltyOne study, 94 percent of consumers who received an unexpected surprise or special acknowledgment felt more positive about the company, and 34 percent of them claimed the experience motivated them to give the company additional business.
Offerings from affiliates
Distributors, wholesalers, and retail partners should be allowed to award loyalty points to customers who make purchases online.
Utilize customer satisfaction surveys
As a customer loyalty strategy, social media outlets like Twitter can be accessible to customers as customer service platforms. You must be proactive in requesting information about your clients’ feelings if you hope to learn more about their opinions.
An easy technique to gather input from your consumer base is to conduct customer satisfaction surveys. Customer feedback should be solicited at the appropriate time (e.g., a few days following delivery or after the start of service) so as not to be perceived as intrusive. For example, after a booking, Airbnb sends out a survey request and promises that it will just take three minutes.
In addition to the above, there are a number of other customer loyalty strategies to try out:
- Reward points
- Engagement activities
- Subscriber-based products and services
- Personalized communications and offerings
- Consumer onboarding
- Connected customer experiences
- Exclusive access
- User-generated content
- Customer experience workflows.
Various tech tools to ensure a great customer experience to drive customer loyalty
Businesses are increasingly relying on the cloud and the resources it provides, and for good reason. According to the 2018 IDG Cloud Computing study, 57% of survey participants indicate that improving customer support or services is a great driver of investment in cloud solutions.
Nowadays, customers expect instantaneous information because of the widespread use of smartphones and mobile search functions. Even still, according to consumer research, customers are ready to wait up to four hours for a response to an online question, but businesses fail to respond to nearly 90% of these requests. Sales conversions, brand sustainability, and revenue will inevitably suffer as a result of a lack of response.
Virtual & Augmented Reality
People’s ability to communicate and work collaboratively will be strongly impacted by the advent of augmented reality (AR) and virtual reality (VR). When it comes to customer experience, AR and VR applications and other solutions are becoming more commonplace, and their impact on a wide range of industries is expected to grow as the technology matures.
B2B customer service is already experiencing the benefits of AR and VR. They make it easier than ever for customers to learn about your business and find solutions on their own.
There has been a rise in the use of speech capabilities in customer service as a result of devices like Amazon Echo and Google Home. According to eMarketer, 31 million Americans made purchases through a smart speaker last year.
The smartphone is still, arguably, the most crucial part of modern technology. Customers often transact businesses from their mobile devices, such as smartphones and tablets. They can make phone calls and send text messages via SMS to chatbots that respond. Virtual and augmented reality (VR/AR) technology can be used to provide individuals with life-changing learning opportunities. They use vocal capabilities to shop, teach, and communicate with customers.
Ultimately, a company’s ability to maintain and grow its customer base relies on more than just social media involvement, customer loyalty programs, or referral bonuses. As a business, it’s all about showing your customers how much you appreciate and value them.
Using the examples and customer loyalty tips in the content of this post will enable you to engage with your consumers on a more personal level. Customers will have even more respect and loyalty to your brand if they see that you value their input and put it ahead of your own financial interests.