“Customer satisfaction is worthless. Customer loyalty is priceless,” said Jeffrey Gitomer, an author, lecturer, and business trainer on sales and customer loyalty.
As the world of business and consumerism constantly changes, there’s only one thing that will keep your customers coming back. It’s not your prices, new products, or your flashy marketing campaigns. It’s how loyal they are to your brand. There are a lot of ways to build customer loyalty, but it’s not always easy. It takes time, effort, and a lot of work to create a truly loyal customer base.
In this blog, we’ll take a look at why customer loyalty is so important for businesses and how you can create and foster it. We’ll also show you how to leverage monday sales CRM to help your company build enduring customer loyalty.
What is customer loyalty?
Customer loyalty is the positive attitude and behaviors that a customer has towards a company. This can include repeat purchases, positive online reviews, and referrals. When a customer chooses to repeatedly purchase a product or service from a particular company, despite having the option to choose from competitors, they’re displaying loyalty to that brand.
Why is building customer loyalty so important?Building customer loyalty is essential to a company’s success. It’s the key to keeping customers coming back and to creating a base of customers willing to recommend your business.
Customer loyalty can lead to increased revenue from repeat purchases, as well as decreased marketing costs thanks to word-of-mouth referrals. Additionally, loyal customers are typically less price-sensitive, meaning they’re less likely to switch to a competitor if prices increase.
Key benefits of establishing customer loyalty
Studies show that businesses that increase their retention rates by just 5% result in increasing their profits by 25-95%. That’s a huge impact on a company’s bottom line!
Laying the groundwork for customer loyalty has a number of benefits for a business. For example, it:
- Generates referrals: When customers are happy with your product or service, they’re more likely to tell their friends and family about it, helping you attract new customers and grow your business.
- Creates trust: Establishing customer loyalty shows that you are committed to providing a good experience for your customers. When customers feel like they can trust you, they’re more likely to do business with you.
- Improves retention rate: It’s no secret that keeping a customer is much cheaper than acquiring a new one. Therefore, establishing customer loyalty is essential to any business in order to maintain a high retention rate.
- Increases profits and growth: By fostering customer loyalty, businesses can increase profits. Loyal customers have much higher conversion rates. On average, a returning customer converts at a rate of 60-70%, while a new one only 5-20%.
- Simplifies financial planning: Repeat customers spend more frequently, meaning planning for future growth, forecasting, and making budgeting decisions is a lot easier.
5 ways to earn customer loyalty and keep it
There are many distinct strategies businesses can use to establish customer loyalty, but not all of them are going to work for your brand or industry.
Understanding your customer is the first step in earning customer loyalty, followed by the strategy you take.
Here are a few we recommend starting with:
1. Offer benefits through loyalty programs
Customer loyalty programs provide customers with incentives to continue doing business with a brand. Some common methods include offering exclusive discounts or rewards to loyalty program members, providing members with early access to new products or services, and offering personalized service or support.
2. Engage with customers on social media
Responding to customer complaints quickly and efficiently on social media, offering exclusive deals to followers, and showing your appreciation online are all solid ways to earn customer loyalty through social engagement. It’s good practice to mention customers in testimonials, tag them in posts, and highlight user-generated content.
Starbucks regularly engages with its customers on social media by responding to mentions, complaints, or general comments. This helps Starbucks customers feel appreciated, inspiring a deeper sense of loyalty.
3. Focus on providing excellent customer service
Companies can earn customer loyalty by providing great customer service. Prompt and responsive customer service, fair and transparent pricing, keeping promises, and going the extra mile all help exceed customer expectations.
4. Personalize communications
Add a personal touch to communications by sending messages that are tailored to a customer’s preferences. This could include special offers based on products a customer has previously purchased or sending birthday discounts. By doing this, companies can create an intimate relationship with their customers, leading to increased loyalty.
5. Create an emotional connection
In a survey, 43% of respondents claimed that emotional attachment was the biggest driver of a company’s value. Creating an emotional connection is paramount to fostering customer loyalty. Customers want to buy from brands that they had positive experiences with, identify with, and proudly support. Building emotional attachment involves building ad campaigns, community, and company culture around values that align with customers’ personal values.
Patagonia is a prime example of how this works in action. This outdoor gear brand runs campaigns based on sustainability and environmental responsibility, which helps foster an emotional connection with its customer base who share the same values.
How do you measure customer loyalty?
There isn’t a one-size-fits-all metric for measuring customer loyalty, rather, it’s ideal to track different measurements to get a well-rounded picture of where you stand. Let’s look at some metrics to keep track of while you work on establishing customer loyalty.
- Churn rate: The percentage of customers who stop using a company’s products or services during a given period.
- Lifetime value (LTV): A metric that measures the amount of revenue that a customer brings in over the course of their relationship with a company.
- Retention rate: The percentage of customers who continue to use a company’s products or services after their initial purchase.
- Net promotor score (NPS): A measurement of customer satisfaction and loyalty used to gauge how likely customers are to recommend a company to others.
- Referrals: Referral tracking is the process of monitoring and measuring where website visitors come from. If you run a referral program, you can track the number of new customers who subscribed or purchased based on word-of-mouth marketing.
Build customer loyalty monday sales CRM
With several types of metrics and strategies to track and create customer loyalty, managing it can be challenging. However, with the right software, you can efficiently organize your customer loyalty efforts. The monday sales CRM provides businesses with a dedicated space to manage and measure company-wide customer loyalty strategies through a range of features.
- Centralize customer information, providing a clear overview of the customer journey to better identify loyalty-creating opportunities.
- Improve collaboration between teams, such as marketing, sales, and customer service, by using boards to keep team members up-to-date on where a customer is in the pipeline, creating a better customer experience.
- Manage customer relationships by automating communications and interactions such as emails, newsletters, and sales pipeline processes.
- Implement social media and eCommerce integrations to simplify capturing customer information and storing data.
What is the most direct cause of customer loyalty?
This differs from customer to customer and brand to brand. Some of the most common include providing excellent customer service, offering competitive prices, and delivering on promises.
How do you start a customer loyalty program?
A good way to get started is to examine programs from competitors in your industry to see what perks customers are looking for. Having a deep understanding of customer needs makes it easier to tailor a program to their liking.
What makes customers loyal to a brand?
There are many reasons! Some might include feeling a connection to the brand, appreciating the quality of the products or services, or simply being satisfied with the overall experience.
Make achieving customer loyalty simple with monday.com
While time-consuming, creating customer loyalty isn’t any more complicated than keeping your customers happy. The monday sales CRM can make that process even simpler by keeping all your customer information in one place in order to take the guesswork out of what your clients are looking for from your brand.