Customer loyalty – Are you aware that over 80 percent of your future profit will come from 20 percent of your existing customers and 65 percent of your future business comes from existing customers according to business trend? (https://www2.deloitte.com/us/en/insights/industry/consumer-products/trends-2020.html)
In light of the above data, retaining existing customers should be the priority of every business that seeks to survive competitive trends.
At this juncture, it becomes necessary to let you understand that customer loyalty is an indisputable “recipe” for a continuous and sustainable business.
As a small business owner, you might find it challenging to win customers let alone getting them to stay. This guide has been prepared to help shape your business for optimal viability.
What is customer loyalty?
Customer loyalty refers to the extent to which a customer is willing to stick to your business and offer their money in exchange for goods or services rendered. You’ve probably done something positive and quite different from what’s obtainable elsewhere to win this loyalty, it could be embedded in “unique value proposition.”
This is the result of consistent positive emotional experience, physical attributes based on satisfaction and perceived value of an experience that comes with the product or services you offer, as simple as that.
To say the least, you must be capable of rising to the occasion and willing to serve these customers beyond conventional boundaries.
Illustration
Two businesses, say “A & B” are in a competitive market for limited buyers, otherwise known as prospective customers.
You had an issue with a product line marketed and distributed by business A. Having gone in, the customer service representative hardly noticed your arrival.
You managed to stand in queue and after about 30 minutes you realized that you’ve been left to your own faith. When you called out the customer service officer angrily, he/she drags you to the dry-cleaners and irked you shouldn’t disturb the peace of the environment. So, you quietly went back into your shell.
After about 2 hours, someone drag-footedly walks up to you and asks “Is there a problem?”
You lamented your ordeal and was told they’d take care of your challenges with no effort at apologizing for wasting your whole day and in the end, they failed to live up to their promise.
On the other hand, you encountered similar challenge with business B, you walked into one of their customer care centers and on arrival, you received a first class welcome.
Your issue was resolved timely and professionally, you were respected without bounds and you felt so delighted with the reception.
Now, between businesses A & B who would you have a repeat business with, who would you pledge your loyalty based on your experience?
Recall, both businesses are competitors with same line of products targeting similar customers. So, the answer is an open secret.
How to win customer loyalty and edge your competitors
Winning customer loyalty comes with a lot of tasks you must strive to accomplish otherwise your business will suffer severe setbacks, or worse…
To do this effectively, kindly adhere holistically and religiously to the following:
- Offer Excellent Customer Service
This is an important part of any business that must not be handled with kids’ gloves as it brings about repeat business and customer loyalty typical of the illustration above.
Excellent customer service brings about more sales, repeat business and better cash-flow. You must put up a stellar performance in this aspect to maintain relevance to your customers.
Here are some interesting customer service satisfaction and experience facts that drive businesses.
- About 54% of customers have higher expectations for excellent customer service
- Gartner predicts that 89% of businesses are expected to compete mainly on customer experience, this means your competitors are on their way to avail your customers the experience they lack while patronizing you. When this happens, it translates into loss of revenue.
- More businesses are directing their investments to customer experience innovations, why can’t you if they can, the resultant effect will be catastrophic if you dare turn a blind eye to it or throw caution to the wind.
- Feedback being provided by customers are being addressed rapidly with great innovations, seen as a means to improve service delivery, new business grounds and competitive advantages found, what made you think these businesses are wasting their time?
- Are you aware that 70% of your customers already made up their minds on who provides the best customer service, they are ready to support such business, are you one of those businesses under immense consideration with such competitive advantage?
- Are you aware that reviews are going on about your service, without you granting such approval? 90% of these customers who intend to make purchases are influenced by positive reviews. Should your business get reviewed, what would be the likely outcome, positive or negative? The honest answer lies somewhere in your subconscious and should you
entertain doubt about your answer, then you need to reposition your business to meet ethical and industry standard in terms of customer service.
Benefits of Excellent customer service and how it affects customer loyalty
An excellent customer service no doubt benefits the business in a number of ways which include but not limited to:
- It gives your business a good publicity which turns in more referrals
- It leads to higher profits since your loyal customers get to do repeat business with you and become brand ambassadors
- Consumer satisfaction is unavoidable, nothing delights a customer like getting great value for money exchanged.
- It motivates your employee to do more, since the reward for excellent performance is more performance.
- More investors will come in since the business is performing and returning profits.
- The business grows and expands, you have a larger marketable prospect to conquer, this means more money, more profit coming your way.
How to offer excellent customer service to win customer loyalty
A number of ways to improve your brand perception are:
Customer centric employees
How good do your employees attend to your customers, do they sound rude, careless, nonchalant with reckless abandon?
You see, a lot of businesses have packed up courtesy of the aforementioned attributes usually seen in employees who were meant to portray good and ethical business policies.
To achieve your aim, your employees must be friendly and willing to assist these customers at all times with no strings attached. Recall, about 54% of customers have higher expectations for excellent customer service, so it’s no business of theirs if you fall short of expectations. They would simply Porte to your competitors and we don’t want that to happen.
Listen to your customers
It takes at least two or more people to have a conversation, and the key to successful conversation is listening. If you listen well, it creates confidence and builds trust.
Brands that listen well, respond positively by addressing what they get as feedback, the response should be in taking action on what you hear not in words or excuses of any kind.
You can only understand your customers better by giving a listening ear, do not assume you already know where they’re headed to, they have more concerns and believe you can provide solution to better the situation which in most cases, is correct.
Do not argue with your customers
Your customers will complain about an unsatisfactory experience. Sometimes it’s their fault other times it’s yours. The difference between the companies that succeed and the ones that do not is how they handle their customers’ problems.
The customer is always right, acknowledged. But it really doesn’t matter who wins the argument, because when you think you do, you lose such customers.
So what’s the basis of arguing in the first place when after all said and done, you lose trust, image and the customers?
Don’t fall for arguments and bruise your clients’ pride, they just want their voices to be heard so as to have their needs met the way they want it to.
Deliver on your promise
It’s better not to promise and surprise the customer with results than make huge promises without keeping them. It’s a fast-track to losing customer loyalty.
- Your brand must serve the need
In line with the afore-mentioned, listening to customers gives you a top-notch idea as to what the client is willing and able to exchange their hard earned money for. Products that fail to address the needs of the consumers will keeping gathering dusts in shelves and freelancers who fail to capture clients’ needs in service delivery will have a hard time competing with, let alone stand out from other brands.
Products sold and services rendered must be compelling, inviting and above all, it should meet and surpass the aim for which it was purchased. Your business must strive to set the standard others wish to follow.
Effective branding leads to customer loyalty, elevates a business and builds recognition and loyalty. Customers are attracted to brands that share similar values with them. When you showcase what you value through branding, customers will develop an emotional connection to you out-rightly. Undoubtedly, this translates to increased sales and revenue.
Having a brand that serves the market gives you the following advantages:
- Customers get to spot you from the crowd– it leads to customer recognition which spurs repeat business and referrals.
- You edge the market competitively- This is where your Unique Value Proposition comes to play. Your brand differentiates you from the pool of competitors, your customers love you for what and who you represent.
- Your new products get easy access- Introducing new products into the market gets easier since you are already a trusted brand, nothing beats that. You spend less for product awareness since your existing customers are now brand ambassadors.
- You command customer loyalty- Your customers will be in for repeat business, they hardly get poached by competitors so long as you connect with their emotional and physical experience through your product or service.
When you produce a brand that serves the benefit centers around business continuity, with less financial outlay, the cash-flow grows. There lies the point number 2.
- Product Pricing
Pricing refers to how much you decide to let a unit of product or service be sold and when your brand meets the market, pricing should as well not be underscored.
Pricing can affect brand equity in different ways. You either go for premium, discounted, competitive, cost-based, and introductory or penetration pricing. Depending on the ideal situation, finding the right pricing method is vital.
Introductory, penetration and discounted pricing are ideal for a new product trying to get announced in the market, it gives acceptability and the willingness to try something new on the part of the clients/customers. Setting a premium price for a new product invariably suggests the product is dead on arrival.
Price optimization is one of the key factors in business operations that can improve sales. You have to identify important market indicators like the products that are most profitable/suitable, consumer demand, taste and choice before pushing your brand into the market so that even if you meet an already saturated market, your brand stands out.
- Create a purposeful and responsive feedback channel
It is customary to have customers complain, take reservations on products bought or services received. No matter how good your brand appears, it can only satisfy some people, all of the time; some people ,some of the time; all the people, some of the time but cannot satisfy everybody, all of the time. But effectively handling feedback gives room for re-strategizing and product improvement.
Such customers should not be perceived as problematic or nagging customers. The secret to your success lies in their collective and individual discovery. You must therefore address the issues raised and take action to grow your brand than exchange mere words that cut no ice.
Customer feedback is important because it serves as guiding resource to know what your business is getting right and wrong from the view of your customers.
You can find gems in the rough that make it easier to adjust and adapt to customer complaints over time.
Let me run you through a few effective customer feedback methods you could adopt
- Create a template to collect feedback– You can create your own questions and get answers from your real customers.
- Allow customer blog commenting – Some business websites ignore this veritable tool by putting off blog commenting. But as good as their reason may sound, it as well hurts business in that they do not get to understand how their customers feel exactly about a line of product. It thus deprives them of improvement which is not too good for the business.
- Create a customer satisfaction page- This allows your customers to tell how satisfied (or not) they are with your product/service, encourages them to air their dissatisfaction which leads to brand improvement.
- Use social media- The good thing here is that the users are authentic and real, they express themselves through comments, hashtags and mentions.
- Take a customer survey- Surveys are important because not all customers will leave public and detailed feedback through comments, some prefer to keep it anonymous.
- Make your email and contact form available- This allows customers to contact you directly and privately. It’s a more personal approach that enhances engagement.
Conclusion
In order to gain customer loyalty ahead of competitors, excellent customer service and effectively implementing feedbacks go a long way. Remember also that your brand must serve the market needs with a reasonable product /service pricing. These are effective tools in the hands of businesses to see tremendous results.
There’s no reason to lose any customer to your competitors and when you have these measures in check, they form the basis upon which customer retention and referral rests.
Let me know if you have questions on customer loyalty, and kindly draw my attention to any grey areas using the comment box below. Until then, thanks a lot for your time.
