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We’ve heard it again and again, retaining a customer is far better than constantly searching for new ones. However, keeping customers around is difficult. You can’t rely on the same tactics you used to get them in the door.
Cultivating customer loyalty is a great way to boost the lifetime value of your customers and create a lasting brand reputation. Let’s take a look at the ins and outs of customer loyalty and how you can use it to catapult your company into the future.
The Basics of Customer Loyalty
At its most basic level, understanding customer loyalty feels like common sense. We all understand that a loyal customer will
- Make repeat purchases
- Refer your brand to others
- Give valuable feedback
- Contribute to your brand reputation
While the most obvious form of loyalty is continuing to make purchases with your brand, there are actually several levels of loyalty that you should cultivate within your user base.
Level One: Behavioural Loyalty
This is the most surface-level loyalty and consists mainly of buying from you again and again. While ultimately this is great news for your business, there are a lot of reasons this might happen that have nothing to do with customers loving your company.
Maybe they haven’t heard much from your competition, haven’t done much research into your industry, or simply live close to your physical store. Let’s imagine you own a sandwich shop. You have a regular customer, Jack, who comes in every day because you’re on their way to work.
One day they stopped coming in. When you see them out and about, you ask what happened. They say that another shop opened that was a block closer to their home, had sandwiches for a little cheaper, or made a specific kind of sandwich they had never tried before and loved.
The loyalty Jack had to your store was only on the surface, and they jumped ship right away.
Level Two: Attitudinal Loyalty
The second level of loyalty is what I sometimes call “vibes” based. It’s about the emotions and feelings that folks have when they think about your company.
Lots of marketing is focused on building this kind of loyalty, telling a story about the people who work with your company. You’re a part of your customers’ lives and they are bonded with you.
While customers with attitudinal loyalty may not make tons of purchases with you, they are still excellent to have in your network because they are the most likely people to make referrals. If your company gives them warm fuzzies, you’re way more likely to come up in casual conversation.
If your sandwich shop is chock-full of family memories, warm conversations, and emotional connection, Jack will go out of their way to come in. Maybe not every day, but likely once a week. They’ll even bring friends along to get their favorite one!
Level Three: Cognitive Loyalty
Finally, we’ve reached the deepest level of loyalty, which is where the magic lives. This is achieved when they have full confidence in your brand. They know its value and fully believe that you’re superior to any other offerings.
Your customers aren’t going to be swayed by the promises of your competitors, and they’re happy to pay a little more to ensure they get your level of quality. This is the sweet spot and is way easier to achieve if you’ve already built behavioral and attitudinal trust.
Jack knows you have the best sandwiches in town. High quality, great taste, spectacular value, they wouldn’t think of going anywhere else. They tell their friends about you, they do whatever they can to get your sandwiches multiple times a week.
Factors Affecting Customer Loyalty
Customer Loyalty at its core comes from psychology. There isn’t a way to know exactly what makes any individual person stay or leave. However, if you think of your customers as a whole, several things contribute to their levels of loyalty.
- Quality - People engage with your brand because of your product or service. If the quality is consistently excellent, they’ll keep coming back
- Customer Service - The majority of customers will pay more if they know they’ll get great customer service. If they leave feeling good, they’re going to rush right back
- Brand Reputation - When people recognize your brand, they trust it. Trust builds loyalty, so make sure you have a strong brand marketing strategy in place
- Price - Customers don’t want to find out they could get the same thing elsewhere for less, but they can also be scared off by prices that are too low and make your brand feel “cheap”. Your prices must reflect the value you’re offering
- Convenience - Just like the grocery store that’s closest to your home is likely the one you frequent most, the company that is easiest for customers to engage with will have no trouble maintaining an audience
- Personalization - People want to feel known and appreciated. When you can offer an experience that feels uniquely tailored to their needs, they’ll have a kind of kinship with your brand
Every customer is different. One of these factors may be everything to someone, while another person completely misses it. This is why it’s so important that you spread your efforts across the board.
The Biggest Factor Leading To Customer Loyalty
While all these factors work in tandem to bring your customers back repeatedly, one thing encapsulates them all. A Top-notch customer experience can push your users to cognitive loyalty and keep them coming back for years.
Customer experience includes
- Brand - Strong brand identity that resonates with your target audience and sets you apart from the competition
- Product/Service Quality - Providing high-quality products or services that meet or exceed customers’ expectations
- Customer Service - Delivering excellent customer service by being easily accessible, responsive, and resolving any issues or concerns promptly
- Price - Offering competitive prices that provide value for money
- Convenience - Making it easy for customers to find and purchase your products or services, with user-friendly interfaces and efficient processes
- Personalization - Tailoring the customer experience to meet individual needs and preferences
- Consistency - Maintaining a consistent level of quality and service across all touchpoints
- Trustworthiness - Building and maintaining trust through honesty, transparency, and reliability
- Empathy - Showing genuine care and understanding of customers’ wants and needs
- Convenience - Providing convenience through features like fast delivery, easy returns, and multiple payment options
When you put your customers first, they can feel it. Jack will continue to return to your sandwich shop because it makes them feel good. They know they’ll get a great sandwich for a great price. More than that, they’ll be known. You’ll know their order, make recommendations, and make them feel special every step of the way.
How to Measure Customer Loyalty
As you craft your customer experience, it can be difficult to know if you’re on the right track. This is where data comes in handy.
Several different KPIs and measurements can help you track how loyal your customers are. These include
- Net Promoter Score (NPS) - This is a widely-used metric that measures the likelihood of customers recommending a company to friends and family. It can also show you how successful something like a referral marketing program would be for you
- Customer Satisfaction Score - Find out how much folks enjoy your company and what you offer
- Customer Retention Rate - This is the most straightforward way to tell if your customers are loyal. Check the percentage of customers who are still with your company after a certain length of time
- Repeat Purchase Rate - How many folks are buying from you again and again?
- Customer Lifetime Value - How much revenue do you get from someone throughout all time?
- Customer Engagement - You can track how invested customers are in your company by seeing how they engage with you on social media and beyond
- Customer Feedback - Use surveys, reviews, and more to hear from your customers and see about their loyalty from the source
- Referral Rate - The truest form of loyalty from a customer is to pass your company on to their friends and family
When you know which of these KPIs you’re tracking, not only will you be able to see the fruits of your labor, but you’ll also know what areas of the customer experience to focus on improving.
Strategies for Building Customer Loyalty
Because customer loyalty is so nebulous, it can be difficult to pin down ways to improve it. Let’s take a look at some of the most effective ways you can improve customer experience and build lasting loyalty.
Create a Loyalty Program
It may seem obvious, but rewarding customers for their loyalty is a great way to keep them coming back. This can be as simple as a punch card or as complex as a tiered system with exclusive perks.
An easy way to level up any loyalty program is by incorporating a referral program. When people share your brand with others, the benefits are twofold.
- New Customers - With your current customers acting as a ground team, your user base will grow exponentially
- Boosted Loyalty - When they explain to their friends all the ways your company is amazing, they’ll remind themselves
With this simple addition, you’ll be able to skyrocket growth while keeping customers loyal going forward.
Personalize the Experience
With Netflix and Spotify training customers to expect unique experiences, personalization has become a must. This shows customers that they matter to you, and allows you to make personal connections with them.
If you’re just starting your personalization journey, simply automating your system to refer to each customer by name can go a long way. Further down the road, including personalized recommendations, messaging, and offers can make your customers feel like you truly understand their needs.
Provide Exceptional Customer Service
Customer service can make or break a customer’s loyalty to a brand. If they have a negative experience, they are likely to take their business elsewhere. However, if you provide exceptional customer service, it can leave a lasting impression and strengthen their loyalty to your brand.
Make sure your customer service team is well-trained and equipped to handle any issues that may arise. Respond promptly and courteously to any complaints or inquiries, and go above and beyond to ensure customer satisfaction.
The Bottom Line
Customer loyalty is crucial for the long-term success of any business. It sets you apart as a company worth keeping an eye on.
By focusing on customer experience and finding out what your users need, you can create a strong base of loyal customers who stick around and tell everyone about how great you are.
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