The lifetime value of a customer is one of the most important factors in sustaining the long-term growth of your business. Ideally, you want to build an army of loyal customers who keep coming back, so you can not only establish a strong customer base but also cultivate word of mouth marketing. This article will introduce the fundamentals of customer loyalty and give you five tips for building a loyal customer base for your business.
What is Customer Loyalty?
Customer loyalty is a strategic practice for businesses to attract and retain customers through great service and marketing tactics. It’s about building a bond between your business and your customers, providing them with memorable service and value—whether you are educating them, entertaining them, or solving their problems. Loyal customers will become your business’s strongest brand ambassadors, spreading word of mouth marketing. Essentially, building customer loyalty is like hiring a team of marketers for free!
The Importance of Building Customer Loyalty
Why is customer loyalty so important?
According to a Gartner Group study, 20% of your existing customer base generates 80% of your profits (Source: CMO). Just a 5% increase in increase in customer retention can increase your business profits by 25-125%!
The probability of selling to an existing customer is 60-70 percent. The probability of selling to a new prospect is 5-20 percent (Source: ClickZ). It is much easier to retain a current customer than acquiring a new one. Your current customers are already knowledgeable about your business and are more likely to try new products or services through your recommendations.
The cost of attracting new customers is 6 to 7 times the cost of retaining already loyal customers! If you want to build a successful business, your efforts toward building customer loyalty should become a key component of that of your business’s strategy.
5 Tips for Building Customer Loyalty
1. Provide Valuable Content
In life you have to give to get. Providing customers with content that answers their questions and solves their problems will keep them coming back to your business. You want customers to think of you as a valuable and trusted resource they can go to when they need information. How can you establish this relationship? You can do this through blogging or nurture this relationship through social media. It’s important that you find the right marketing channel to reach your audience. The key is to create, curate, and share content that is helpful and interesting to your customers.
Related eBook: Business Blogging 101
There are endless possibilities for the type of content you can post. Even if you don’t have the time to create your own content, curating and sharing content is an efficient way to engage with your customers. For example, if you read an article that your customers might find interesting, share it on your LinkedIn or Facebook page, or tweet it out. Another great tactic is to set up a series of helpful posts such as a “tip of the day” or a “tip of the week”. Setting up a post series that help your customers will give them incentive and increase engagement on social media. This will keep your business in their minds until they are ready to make a purchase with you or use your services again.
2. Interact with your Customers
Whether it’s through an email newsletter, blogging, Facebook, LinkedIn, Instagram, or Twitter, use these online marketing channels to interact with your customers on a more frequent basis. You can tweet your customers a “Thank you for your business” or thank them via your Facebook page for their loyalty. Any way you can think of to ping your customers in a positive way will help keep them happy. Engaging with your customers through these methods will make them feel special and turn customers into evangelists.
3. Abide by the 80/20 Rule
When you are marketing to people online you should abide by the 80/20 Rule. The 80/20 rule says that for every 10 posts, 8 should be content that provides value to your customers. Only 2 out of your 10 posts should be promotional material. For example, if you’re a daycare center, you can share a list like”10 Nutrition tips for Toddlers”. If you’re a fitness trainer, you could post weekly weight loss tips. It’s content like this that will establish your business as an authority in your industry in the minds of customers. It will also convey the message to your customers that you’re looking to add value to their lives, not take their money. This enables you to build trust with your customers and increase their loyalty.
4. Customer Loyalty Program Discounts & Rewards
Everyone loves a deal. Establishing a customer loyalty program by running discounts and promotions through social media and website makes things interesting for your customers. Customers love to know that you care about them, and rewarding them with a discount for their loyalty is something they will greatly appreciate. You can run these promotions easily through your website, your Facebook page, or even through an Instagram giveaway.
5. Update! Update! Update!
It’s important in your customer relationships to keep things fresh! Use social media or your website to keep your customers posted on the latest deals or events at your business. This can be done very simply in a number of ways. If you have a blog, write engaging posts that introduce your customers to a new product or service you’re offering. Or it can be as simple as posting pictures on Facebook for people to see. Behind-the-scenes photos are a great way to build a more personal connection with customers.
Bonus Tip: Mix Up Your Content
Variety is the spice of life, and its no different when it comes to engaging users on social media. In the digital age, with so much information readily available, people get bored easily. A fast way to lose your customer’s attention is by posting the same dreary thing 20 different ways. Videos and pictures through Instagram are a great ways to mix things up. Post a video of a workout one of your clients did in the morning if you’re a personal trainer. If you’re an interior designer, shoot a panoramic video of a new room you designed. Videos and pictures give customers a window into what is going on in your business and make it more personable. Posting videos and pictures also gives your loyal customers an opportunity to become an evangelist for you by sharing them on their own social media pages!
Remember: your customers are the lifeblood of your business. If you create an army of loyal customers and keep them happy, your business will thrive.
Don’t forget—loyal customers leave the best reviews! For more tips on getting online reviews, download our free eBook below: