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The Ultimate Guide to Earning Customer Loyalty That Lasts

Customer Loyalty

Did you know that repeat customers spend around 65% more than new customers, and it is ten times more expensive to attract new customers than to retain the current ones? Numerous customer service statistics prove why customer loyalty is an important part of your CX strategy and why you need to build loyalty for better business success. But sometimes, it might be tricky to employ the right strategy and loyalty programs that can benefit your business in the best way. 

If you want to build customer loyalty and improve customer experience, then keep reading this detailed guide to learn effective ways to earn trust and loyalty.

What is Customer Loyalty, and Why is it Important?

Customer loyalty, in the simplest sense, is the measurement of a customer's willingness to continue purchasing your product and service and engaging with your brand. Customer loyalty leads to an increase in lifetime value, which is an important measure in determining the effectiveness of your customer experience strategy. 

A loyal customer will choose your brand over others in the industry, making loyalty one of the most valuable assets for growth and success. Here are some common benefits of building and improving your customer loyalty rate over time:

  • When businesses use effective CX strategies to serve their customers and maintain their attention, it can lead to repeated sales and increased future sale potential, which ultimately leads to better revenue. 

  • Serving customers in a way that earns their trust and confidence can help your brand become more competitive and can even convert customers from your top competitors. This can create an increased demand for your products and services in the market, and exceptional loyalty programs and perks can create brand differentiation. 

  • Working on building customer loyalty can also act as a free marketing tool through genuine customers. Loyal customers are very likely to spread positive reviews about your brand, which can lead to an increase in customer base without any additional marketing cost. 

  • Making customer loyalty an essential part of your customer experience leads to a reduction in churn rate, which saves a lot of money and resources that would have otherwise gone into acquiring new customers. Thus, a better loyalty rate not only leads to increased revenue but also increased savings. 

Common Metrics Used to Measure Customer Loyalty

Here are a list of some common metrics that can help you measure customer loyalty:

  • Customer satisfaction levels determine how satisfied the customers are, ranging from not satisfied to extremely satisfied. 

  • The churn rate determines the percentage of customers who cancel your brand products/services or do not renew the subscription.

  • Customer lifetime value tells how valuable a customer is to your brand depending on their relationship with you, which determines each customer's worth to your business.

  • The repeat purchase rate calculates the percentage of customers that make repeated purchases, also known as the customer re-order rate. 

  • Affiliate purchases help understand the return from affiliates to determine if your brand should continue leveraging the particular relationship. 

10 Practical Ways to Build & Maintain Customer Loyalty 

Your customer service needs to include approaches that help create trust among customers, and here are some effective ways in which you can build customer loyalty: 

  1. Provide customers with discounts: Businesses can offer discounts to customers on the products and services they avail with the latest analytics technology. Offering exclusive discounts on certain products and other products that complement the prior purchases is an excellent way to retain your customer base. Discounts can also get customers to buy from your brand during slow times, like offering a 10% discount on movie tickets on a weekday. 

  2. Rewards customers and promote the reward scheme: Rewards are one of the easiest and most common ways to gain customer's attention, which can lead to better customer loyalty. A lot of companies offer free shipping over a certain order amount or deliver a gift with the purchase of certain products. Another way is to create a point system wherein customers earn points for their purchases, which can be redeemed later. Make sure that the total points collected are mentioned on their profile along with the expiration date. Creating a rewards program or offering certain deals is incomplete without letting the customers know about the scheme. For this, you can encourage your sales team to talk about the program to the customers while making a purchase or mention the scheme on the home page and billing page of your shopping website. 

  3. Run the "refer a friend" program: There are so many deals, discounts, offers, and programs that a business can run to build customer loyalty and improve customer experience. The "refer a friend" is another effective way to reward current and new customers at the same time via a special promotion. You can provide discounts for every friend referral a current customer makes, and the same discount can be given to the customer who joins via the referral code. These programs provide you an opportunity to get creative and express how much the customers matter to your brand, thus increasing trust and loyalty.

  4. Ask for feedback & reviews: Creating and offering different discounts and schemes can be more effective if you learn how customers are responding to them and if there is room for improvement. This can be done by asking for their honest feedback and reviews, which can help you collect customer data for detailed analysis. The best time to collect feedback and reviews is immediately after an interaction or purchase when your brand and product are fresh in the customer's mind. Once the feedback and reviews are collected, you can go through them and recognize areas where you can make modifications to better your customer service approach. Lastly, you need to follow up with the consumers once the changes are implemented to let them know that they are heard and their opinions are valued. 

  5. Engage your customers: Did you know that companies with strong engagement strategies retain around 90% of their customers, whereas companies with a weak omnichannel presence only retain one-third of their customers? This is why it is essential to build a customer community where they can share their opinions, discuss the latest trends, and make valuable connections.   You can boost your brand engagement by developing a brand voice and experimenting with various mediums, like social media content and infographics. 

  6. Use a relationship management system: A customer relationship management system (CRM) can help you easily execute all the customer loyalty strategies. A proper CRM system can help you collect important customer data within a single, consolidated location, which can be analyzed and utilized to create different reward programs. This detailed data can enable you to learn more about the customers and create personalized experiences, which can improve retention rate and build trust & loyalty.   Not only this but a CRM system can also be used to build detailed profiles for individual customers and provide a 360* view of the customer, which can enable you to create marketing campaigns, promotional offers, and product recommendations as per individual customer interests. 

  7. Analyze the public perception and maintain human connection: Analyzing the social sentiment can help understand how your brand is perceived on social media, which can be a strong indicator of where your customers are leaning. This can be a great way to stay on top of the trends and analyze different segments of customers, like GenZ and millennials, to ensure long-term customer loyalty.  Apart from analyzing the customer's sentiments, it is also crucial to maintain a human connection, which can be tricky in this digital age. Did you know that about 80% of customers say that human interaction is an important part of their overall customer experience? For this, try to build one-on-one interactions on social media through DMs, emails, and online chats, and have an actual team available by phone. 

  8. Speak your customer's language: An extension of the above point, you need to speak your customer's language to maintain better human connection. As per statistics, 75% of customers are more likely to purchase from a brand if their product information is in their native language. Thus, offering multilingual services is a smart way to make the customer experience more effective and to show that you value the customers, which can build brand loyalty in the long run.  Along with this, it is equally important to use a conversational tone when interacting with customers so that the interaction is friendly, understandable, and relatable. 

  9. Show gratitude and remember their special days: As the saying goes - "gratitude is the best attitude," and a simple thank you indeed goes a long way! You can deliver heartfelt thank you notes after every purchase to break the impersonal online barrier and express your thoughts. Handwritten notes are an incredible way to show thanks, so whenever it's feasible, you can send these notes along with the purchase.  Apart from this, you can send holiday cards and personalized gifts on their special days, like birthdays and anniversaries, to acknowledge that you care. This is an excellent way to add a personal touch and build better customer relations, which can translate into customer loyalty. 

  10. Be honest & flexible: It goes without saying, but honesty is a crucial part of building better customer experiences. If your brand doesn't address a small mistake with an order, your customers might go unnoticed, and this can also lead to a negative experience. Thus, it is essential to accept the mistakes and be honest with your customers instead of ignoring the issues.  You can send a simple email addressing the issue and get it resolved as soon as possible so that the customers remain loyal. Similarly, it is crucial to be a little flexible with your policies, especially when a long-time customer is involved. Small exceptions can turn casual shoppers into long-term brand advocates, and going the extra mile for the customer can also build a positive brand image. 

How Can You Create a Loyalty Program for Better Customer Loyalty Management?

Creating a dedicated customer loyalty program can differentiate your brand in the market, is cost-effective, and can help incentivize website reviews and ratings. Here is how you can create a loyalty program for better customer loyalty management:

  1. Choose a great name that hints at the benefits to incite curiosity and urge them to participate in the program. The idea is to make the program as compelling as possible and ensure the customers that the program is more than just about money or boosting sales. 

  2. Your customer loyalty program can reward non-purchasing customers for certain actions, like watching a product video or sharing your social media content. This leads to better brand engagement and demonstrates your commitment to their loyalty. 

  3. Make the points and rewards offered in the loyalty scheme valuable and monetary. Customers are more attracted to loyalty programs where they can earn monetary benefits, like cashback rewards that have a certain monetary value so that they can visualize what they can earn.

  4. Another way to make your customer loyalty program tempting is to structure non-monetary benefits around the customer's values. For example - donating a certain product to a child in need for every customer purchase and including other social causes can get customers excited about helping in other ways. 

  5. While creating a loyalty program, you should provide multiple opportunities for customers to enroll by promoting the program on your website, social media, on the checkout page, etc. You can also partner with other brands to create a co-branding reward scheme so that customers get multiple rewards and both the brands benefit, creating a win-win situation.  

Thus, there are unlimited ways in which you can leverage your products and resources to build customer loyalty. The idea is to compel customers to make repeated purchases with your brand through creative schemes and programs. Customer loyalty is not limited to discounts and offers but also to make them feel valued, so maintaining a better relationship is key. 

If you are unable to create a successful loyalty program or are confused about what elements to include, you can reach out to our experts for a quick consultation. 


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