Customer loyalty and how do I build it?

Customer loyalty or repeat business means getting your existing customers to make another purchase. This is something that most businesses would like, but only some enjoy.

To get repeat custom, you need a product or service that people need to buy more than once, or you need to have add-ons that people can purchase. For example, a kitchen retailer is not likely to sell a customer more than one kitchen in the space of 10 years. However, they could diversify their offering to include accessories, wardrobes or other storage solutions in order to encourage customers to come back.

Here are 6 ways to build customer loyalty in your business.

• Delivering good service

Once you are clear on what you want people to purchase (and develop range extensions if necessary), the key thing to building customer loyalty is a good product and level of service. The overall experience of the purchase, including after-sales care, will often strongly influence the decision of whether to repeat buy or not.

However positively you think about the actions and promises you make throughout the customer journey, it is the customer that experiences the reality of this. If there is a breakdown between the two, this can end the possibility of repeat business.

Having a single, consistent, customer-oriented approach throughout your organisation will help ensure that everyone delivers the ‘brand promise’. It should not just be down to the sales and marketing employees. Whether it is finance, HR, IT etc, everyone needs to buy in to this to create an effective customer culture.　

• Brand psychology

Consumers switching brands, retailers or service providers is increasingly influenced by price. While it is never sensible to compete solely on price, it is worth noting that customers are more fickle and that to retain them, you will need to ensure a strong level of brand loyalty.　

Successful brands use psychology for building customer loyalty. Throughout our life, we establish our own identity and want to build relationships with people that are in some way ‘like us’. Being identified with a brand is a useful shortcut to achieving this. As consumers, we buy into the image that is associated with the brand, and so it becomes part of who we are. Interestingly, we use our consumerism to signal to people around us who we are.　

• Creatures of habit

Loyalty is often confused with familiarity – we are creatures of habit and change is uncomfortable. As a result of this, we find it easier to shop in the same store week in, week out, rather than go to an alternative; simply because we are unfamiliar with the layout, the brands on offer, the service, etc. Using your business values can be a great way to build this loyalty in to everything you do. 

• Loyalty schemes

There are some marketing tips to help develop repeat business beyond the brand loyalty psychology. There is the obvious loyalty card scheme – however, the reward will need to have a perceived value greater than the purchases a customer has made.

Buying 6 cups of coffee to get 1 free just is not going to generate significant loyalty or repeat custom these days. If you are launching a loyalty or points collection scheme, think about the reward at the start of the process – there has to be something in it for the customer. The sole objective is not to boost your sales and profits.

Hubspot offer a guide sharing the importance of customer loyalty for businesses.

• After the sale

Sending reminders to people can also generate repeat business. Insurance companies have this down to a fine art. Reminders about house, car, pet insurances – a constant stream of prompts can encourage people to come back to your business.　

If you are mailing a product, then use fast delivery. As a customer, being delighted at an item arriving the next day is likely to drive them to repeatedly use your outlet. Equally, consider the packaging and presentation of your products and make your customer feel special when they open their package.　

Send thank you notes in your packages or sales bags. Alternatively, if you have just finished a contract, send a thank you card. These things can make your client feel appreciated and special.

If you get a customer complaint, deal with it. A customer has taken the time to reach out to you – to engage – so deal with it properly. An effective rectification of a problem can illustrate your customer service and ironically lead to repeat business.

• Keep in touch

Keep your brand name top of mind, and stay in touch with your customers. You can do this by phone, email, social media, etc. – which ever channel they use and respond to.

If you have a database of customers, then you could try and segment them and use their shopping habits to drive the messages that you send them. It costs between 4 and 10 times as much to find a new customer as it does to hold on to an existing one. Retain customers by showing them that you value their business.

Contact us to learn more about support available to businesses in York and North Yorkshire with York & North Yorkshire Growth Hub.