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Customer Loyalty: What it Is and Why It is Important

There are so many buzzwords with little meaning doing the rounds these days, but “customer loyalty” isn’t among them. It’s a concept that goes back for centuries, and its benefits are very real indeed. So, what is customer loyalty, and why would you want to prioritise it?

Customer loyalty means that people will keep buying from your business because they believe that you offer them the best in products and services. They’ll stick with you even when there are cheaper alternatives, and they’ll even tell their friends and business associates about your company and why they’re loyal customers. 

Don’t underestimate the benefits of this. You can join the thousands of companies who make claims about what they offer, or you can have social proof in the form of satisfied customers who are ready to recommend you. Would you believe marketing claims over something that ordinary people say? Most people wouldn’t. 

We’ve already touched on some of the benefits of customer loyalty, but we’ve barely scratched the surface. Let’s try to capture them all next. 

Why is Customer Loyalty Important?

Loyal customers are happy customers, and the businesses that build loyalty are healthier businesses too. Need specifics? Let’s dive in!

Build a great reputation. Loyal customers are happy to tell the world how pleased they are with their experiences. Reputations are built on customer experiences, and loyal customers will be happy to share theirs – both online and offline. 

Get brand advocates. You pay for advertising, but when happy clients tell others about your business, you get very believable advertising for free. Would you support a business that your friends recommend? Chances are, you would!

Get social proof. There isn’t a business out there that won’t claim that it offers fantastic products and great service. Your marketing claims may be met with scepticism, but people who have become your loyal clients provide evidence that your business really is all that it says it is. 

Get repeat purchases. This one’s a biggie! Neutral customers might succumb to the lures your competitors throw out and try a competing offer. Loyal customers will always choose you.

Get more for your marketing bucks. It costs a lot to make people aware of your business and what it offers. Getting that initial purchase is your first big win. Provided they’re pleased with the result, they’ll stick with you and even recommend you. Your converted customers remain your customers without you needing to spend more – and they’ll draw in more customers for free. 

Boost your profits. What’s your customer lifetime value? Winning a customer is great. Now, you need to keep them. Loyal customers will choose your product over competing products for as long as they need what you offer. That means a higher customer lifetime value and more revenue for your business. 

Get to know your customers. Who are your loyal customers? Why do they choose your products? The answers to these questions may be surprising and can help you to pitch to the most relevant demographics. 

Get more customer engagement and input. When customers are loyal, they feel engaged too. They’re ready to talk to you about your products and services, giving you valuable information about their experiences. Find out what your customers like – and don’t like. Market research is expensive, but loyal customers will give you their opinions freely.

Deal with less price-sensitive clients. Pricing needn’t be a race to the bottom. Loyal customers are willing to pay more for products and services they believe in. Sometimes, loyalty comes from the quality of your products, and sometimes it’s the great service you offer. Usually, it’s a combination of the two. Loyalty equates to trust, and a reluctance to test the waters elsewhere – even if there’s potential for getting something similar at a lower price. 

What’s the Customer Loyalty Ladder?

Building customer relationships to the point where you have loyal customers doesn’t happen the minute people become aware of your business. It’s a process, and if you see loyalty as the pinnacle you want to achieve, you should consider customer experiences on every rung of the customer loyalty ladder. 

Here’s how it works. At first, people notice your business and think you might have something they want. They’re prospects. They haven’t purchased anything yet, but there’s a good chance that they will. 

Now that they know your company exists and has products they might want, prospects take a closer look. They’ve processed to the “shopping” level of the ladder, but you don’t have a loyal customer yet. 

You’ve made a sale! During the shopping process, you gain a new customer. But they aren’t a client just yet, and there’s no guarantee of satisfaction, let alone loyalty. 

The dictionary says that clients and customers are the same. Definitions you can search for online try to distinguish between the two based on various criteria and don’t agree. For the purpose of this discussion, a client is someone who will keep buying your products, while a customer buys once. Customers are good to have – clients are better!

Let’s suppose that a prospect has become a customer, and later a client. Are they an advocate? That depends on you. Most of us can think of businesses we support grudgingly. Your insurance company might be a good example. Before you become an advocate, you’re going to want evidence that it’s a pleasure and a privilege to do business with it before it enjoys your full support. 

Customer Loyalty and Retention: Strategies to Keep Your Clients and Develop Brand Advocates

There are many ways to build customer loyalty. It’s based on self-interest, so customer loyalty programmes, though unemotional by nature, can work. Typically, you’d offer incentives for referrals and repeat business. It’s a purely transactional way of keeping your customers and getting them to recommend you. 

But passionate advocates are better than incentivised advocates. You don’t need to offer them anything extra in exchange for their loyalty and advocacy. Instead, they’re objectively convinced that you offer the best options for them and people like them. 

It takes more than offering good products. After all, competition can come from unexpected places. Products that are even vaguely related to yours could win in a situation in which one or the other might achieve a similar result and your customers have limited resources. 

One-to-One Connection Builds Relationships and Loyalty

Real loyalty means that your customers love supporting your business, and great service is one of the top ways to win them and keep them. It’s not just a matter of operational efficiency and sending nice automated emails (although these have their place). The differentiating factors that you can count on are personal service and interpersonal connections. 

Technology offers many ways to connect with brands, but one-to-one interactions offer defining moments. That was the case back when everyone shopped on the high street, and it still holds true when people shop using the World Wide Web. 

Your challenge? Ensuring that everyone who interacts with your business can get in-person service that uses technology to understand where they’re at when they make that call or send an email. Talking to bots just doesn’t cut it. Try it if you’re curious – and avoid the “throwing my phone at the wall” moment it is almost sure to provoke. 

People want to talk to people and they want what only real human beings can offer: empathy, flexibility, and someone who will truly listen to them. Your customer service and support line can be your biggest source of customer loyalty – or your weakest link. 

When your customers search for human contact, give them everything they’re looking for and more. What would your customers’ experience be like if you, the founder or CEO of your company, picked up the call yourself? At RSVP, we match anything you could do for your customers, and then work to do even better. Great in-person service makes personal connections, and they last. Customer loyalty could be the key to your success, and RSVP has the people you can trust to connect with your customers and build relationships with your most precious resources: your customers and clients. 

Customer Lifecycle Management: Building and Maintaining Relationships

Customers go through several phases on the road to customer loyalty – and once they’re there, they will have expectations. You’re focused on business strategies, product development, and more. Do you have time to listen to your customers? 

We do! Build customer loyalty and acquire brand advocates effortlessly while keeping your finger on the pulse of customer opinion. RSVP delights your customers and keeps you in control. We deal with the details – you tap into the trends and get the big picture. Deploy your customer lifecycle management efforts effectively with RSVP. Contact us today, we’ll do you proud!


Read more about the Customer Lifecycle.

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