Written by Kushal Dev | Co-founder, Customer Guru
Customers are the ones who keep your company’s heart beating. Keeping up with their needs and providing them with the utmost experience is vital. Your company has to show concern for your customers for them to do business with you. This is where the concept of customer loyalty comes in.
Growing competition means companies have to constantly put in an effort to better the customer’s journey across all touch-points. While many organisations put great emphasis on customer acquisition, it is much more important to retain existing ones; as it costs around 6-7 times more to acquire new customers than it is to keep a current one.
Loyal customers will ensure that your business runs smoothly and eventually earn you that targeted annual revenue.
Competitive forces arise every day and you obviously want to do anything to prevent your competitors from stealing your customers. The easiest way to develop a shield against competition is to build a loyal customer base. These customers become less sensitive to price but want an excellent experience every time they interact with you. When times get rough it is these loyal customers who are going to stick by your brand. Not only can you pass on the additional costs to such customers, but they are the ones who will ultimately protect your bottom-line.
Take, for example, Apple’s loyal customer base. Look at how Apple has dominated in smartphone brand loyalty by providing excellent and unmatched customer experience at every touch-point.
Related Article: The Ultimate Cheat Sheet on Customer Loyalty
Loyal customers always want to keep coming back for the experience. Therefore it is your job to develop a customer-centric company culture, delivering an excellent experience to each and every customer every time they do business with you. It will only make it easier for you to cross-sell and up-sell to such customers as compared to new ones. The primary reason for this is because customers who are familiar with your brand are eager to try out new products and services. In the end, these transactions are what is crucial to the survival of your business in the long-run.
Marketing Metrics found out that the probability of selling something to new prospects is only about 5-20%, whilst the probability of selling something to an existing customer is 60-70%. For the same amount of effort to sell something, you could get more sales done to your loyal customers than to new customers. Additionally, according to Gartner, 80% of your company’s profit comes from the 20% of your existing loyal customers – that’s the classic 80-20 rule which has been worshiped by business leaders since Pareto’s time!
Related Article: Top 10 Must-haves For a Customer-Centric Leader
You may consider your loyal customers as most beneficial to your quarterly profit statement. However, they are also extremely advantageous from a marketing standpoint. Repeat customers are the ones who are most likely to voice their praise for your brand to friends and family.
Bain & Company found that the more purchases a customer makes the more they share your brand. A customer that has purchased from you 10 times refers 50% more people than a first time customer.
By growing a loyal customer’s base, companies are able to create an army of promoters. Something that will put previous marketing efforts to shame. These promoters help slash your marketing and advertising budget because of the more powerful word-of-mouth marketing they generate. Furthermore, it is less costly for you to invest in customer retention, rather than customer acquisition. Maintain your loyal customer base and you will see your business grow exponentially.
Customer loyalty helps strengthen your brand image. As a result, your excellent reputation will help the company grow to great heights. Businesses should focus on giving their customers an outstanding experience and reward them for their loyalty. After all, your customers are your biggest assets
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