It’s a no-brainer that customer loyalty drives revenue. But what’s more, loyal customers save your company money, predict future sales, generate referrals, and become more valuable over time. Statistics show that loyal customers are worth up to 10 times as much as their first purchase.
In this post, we’ll look at five major drivers of customer loyalty, and discuss how companies can adapt their customer experience to evolving customer demands.
5 Key Ways to Drive Customer Loyalty
Every company is different, but regardless of industry or function, most can’t develop a committed customer base without checking some of the same boxes. Here are five common drivers of customer loyalty.
1. Offer expertise.
Customers are looking for expertise when it comes time to purchase—and we’re not just talking product and service knowledge. Recent research suggests that customers want salespeople to understand their business and advise them much like a consultant would.
This new desire for sales expertise is likely tied to consumers’ growing taste for personalization. (More on that below.) Companies that go to great lengths to understand customers’ needs and deliver the perfect, custom-fit solution—or at least the semblance of one—will typically beat out competitors who don’t.
So how do you train employees to be experts in every industry and every customer? It seems impossible—and it probably is. Sales reps and account managers can’t become intimately familiar with a customer’s needs without a great deal of research or personal experience. What they can do is ask the right questions and explore common challenges to deliver real value to each customer.
Bottom line: If employees can recognize common customer pain points and explain how your solutions address them, customers will get the expertise they value. Train them to identify customer needs and frame the conversation around solutions.
2. Provide quality products and services.
No surprise here. Quality is another huge factor in customer loyalty. Customers buy products and invest in services that fill a particular need, so the company offering the best solution will often win their loyalty.
Though companies recognize why quality matters, they’re often unable to innovate fast enough to keep up with customer expectations. New product releases may spark excitement, but come tomorrow, customers will be asking what’s next.
Without a massive development budget and a time machine, there’s no way to give everyone everything they want before they even know they want it. Instead of fulfilling every desire, companies can draw on customer feedback when mapping out product and service updates—and share how customer feedback is impacting those decisions.
Bottom line: When customers see that companies care about their needs and preferences, they’ll feel valued, even if they can’t always get what they want. Give customers the opportunity to weigh in on your company’s future and they’ll be all the more invested in it.
3. Personalize customer experience.
Consumers are inundated with marketing messages every day. They don’t have the time or patience to sift through messages that aren’t relevant to their needs. What’s more, 73% of consumers say they prefer to do business with brands that use their personal information to provide a more relevant shopping experience.
As the desire for personalization grows, consumers are more willing to share personal details—especially if they know how it will benefit them. Use purchase history, demographics, and other characterizing details to understand customer preferences. Then, take the time to segment your email lists, personalize your messaging, gather feedback, and create products that resonate with your target audience.
Bottom line: Consumers are willing to share information when they see how it will benefit them, so don’t hold that back. Explain why you’re asking for information and how you’ll use it to design new products or deliver a better customer experience.
4. Nurture customer relationships.
I was shopping at one of my favorite stores recently. They gave me a coupon for $50 off of $100 at their VIP sale. I was excited about it, but completely forgot in the days leading up to it. The day before it expired, an employee called to remind me that I had one day left to take advantage of the promotion.
This was a great customer experience that won my business and will keep me coming back. Shows of appreciation, like promotional offers or invitations to private events, incentivize purchases and drive customer loyalty. Obviously the store benefited from getting me to shop there again, but the gesture wasn’t lost on me. With a 30-second call, this employee turned me into a loyal customer.
Bottom line: Make people feel special. It doesn’t take a whole lot. Loyalty programs, exclusive events, and personal touches go a long way. When customers see that their business is valued, they’re more likely to return.
5. Ask for customer feedback.
It’s difficult to know if you are hitting the mark with your customers if you never ask. Customer surveys offer direct insights that companies often miss. Customer satisfaction (CSAT) and Net Promoter Score® (NPS®) surveys help diagnose customer health more effectively. You can use a CSAT survey to collect timely feedback on specific customer experiences, while the NPS survey reflects overall customer loyalty and happiness.
Customer surveys also help you address specific problems that would typically go undetected. Negative customer feedback can prove invaluable, giving you the insight you need to make changes, save customers, and reduce churn rates. On top of that, customer surveys can assist with reputation management. Rather than hearing negative feedback in a public review, you get it directly.
On the flip side, positive survey responses help you identify the happy customers who are willing to bring you referrals. You can work to nurture those relationships long-term—and ideally create a whole lot more them.
Bottom line: Customer feedback can fast-track resolutions to the issues impacting customer health. Use regular customer surveys to tap into the customer mindset and improve customer experience.
Though dollar signs certainly impact purchase decisions, research shows that customer experience holds more and more weight. In the next 5 years, customer experience will become the top brand differentiator, beating out price and product. Consumers are demanding a dynamic experience that’s tailored to their needs and preferences. Companies that go to lengths to deliver it will win their loyalty.
When you understand what drives customer loyalty—and take measures to sustain it long-term—customers will invest in your success.
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