The 60 second guide to customer loyaltyby
By Neil Davey, editor
The life blood of most successful businesses is a group of loyal customers. Estimates suggest that leading firms glean as much as 80 percent of their business from a mere 20 percent of their customers. As such, each one of those customers is worth its weight in gold. Yet how loyal to your company are they really? So-called ‘satisfied’ customers jump ship every day. Can you be sure that it won’t be the turn of one of yours next? The stakes are certainly rising. Today’s customer is more demanding than ever before and expects to be able to customise and place orders across multiple channels, check order status and examine new goods and services 24 hours a day, seven days a week. And good customers aren’t easy – or cheap – to replace. Common business wisdom stresses that it is far more costly to acquire new customers than it is to retain existing customers. Indeed, some estimates put it as high as six to ten times higher than for repeat business.
But if you successfully breed loyalty, the rewards can be enormous. Research by Fredereich F. Reichheld and W. Earl Sasser at Harvard University calculated that a mere five percent reduction in customer defections increases company profits by 25 percent to 85 percent. But in a sense this is preaching to the converted – most businesses know that they need to aggressively focus on retaining their most important customers and grow this base of ultra-profitable customers. The question is, how they can achieve this; or more accurately, how can companies improve customer loyalty? There are plenty of tips to keeping your clients cosy, but as we know that time is money we’re giving you the busy businessman’s guide to customer loyalty: in under 60 seconds.
00.60 – Communication is critical!
Ensure you stay in contact with both existing and past clients. E-mail newsletters, monthly fliers, holiday greeting cards and postcards are just some of the ways that you can reach to your customers. By not forgetting them, they won’t forget you! But communication is a two-way street, so make sure that you also listen to any suggestions – you could even pick up some good ideas!
00.45 – Get personal!
The theme tune to 80s comedy Cheers provided sage advice: “You want to be where everybody knows your name”. There’s nothing quite like the personal touch. If you get to know the names and faces of your regulars you will go a long way to securing their loyalty. Sadly, when businesses get too big, often this is forgotten. Why not combine these first two points and send a personalised note/card as an after-sales service to check that they are satisfied with the product or service?
00.25 – Rewards and incentives
In a nutshell – recognise those customers that have done business with you on multiple occasions and reward them. This could take the form of special promotions. Or try tying loyalty points schemes with discount programmes, so that the customers who make the most purchases will save the most money. And if your products or services are discounted, you are even more attractive, encouraging greater custom.
00.15 – Go the extra mile with customer service!
Don’t just meet customer expectations – exceed them. Clients always remember being treated well. So try to instil a culture of superior customer service in your organisation, from the management down to the staff on the shop floor. That means ensuring that the products that your regular customers buy are always in stock, providing products and services that may complement them – and presenting a friendly face.
00.05 – Make it enjoyable!
Ensure that doing business with you is an enjoyable and easy experience for your customers. Whether it is purchasing goods or services or resolving any problems, they should find it hassle-free and a pleasure to deal with your company.
How else can businesses keep their customers loyal? If you had another 60 seconds, what else would you have liked to have seen in the list? Why not share your thoughts with the community?