Customers should be at the heart of any business. In simple terms, your customers provide your income, so without them you wouldn’t have a business. This makes an existing, loyal customer base an enormously valuable asset to your company – and loyal customers spend more.

Customers should be prioritised, nurtured, protected and incentivised to stay with you. This is where a customer loyalty scheme can help. The fact is, keeping your existing customers is just as important as finding new ones. Indeed, according to Forbes, “The single most important thing you can do for your business is to get to work building true customer loyalty, one customer at a time.”  

 

What are the benefits of achieving customer loyalty?

Loyal customers are more profitable to a business, and this is why:  

 

  • Reduced costs – The proof is in the numbers: it costs about five times more to acquire a new customer than it does to generate new business from an existing customer.

 

  • Recommendations – Happy customers can be your most effective brand ambassadors. They are likely to refer new business, which can be an easier close for your sales team and a much cheaper method of lead generation. In fact, in a Loyalty 360 survey, three quarters of respondents reported that 20% of their new sales come from current customers.

 

  • Repeat business – Loyal customers spend more. This is because they are more likely to keep coming back, repeatedly purchasing your goods or services over an extended period of time. Depending on your business and sales cycle, you could sell more to one loyal customer in a year than perhaps to 10 first-time customers.

 

  • Bigger sales ­– As you build relationships with loyal customers, it will become increasingly easy to sell to them in higher volume. Therefore, achieving customer loyalty should mean more sales and larger profits. Customers that trust you are also more likely to heed your advice. This provides an opportunity for you to make recommendations and sell across your product lines.

 

  • Staying ahead – The more loyal your customers are, the wider distance it can put you ahead of the competition. Companies with strong brand loyalty can make them practically immune to competitive forces, which is crucial in markets that see frequent new players.

  

Building a customer loyalty programme

To build and maintain loyalty successfully, you need to give something back to your customers. It’s worth remembering that loyal customers are more profitable, but they can also be quick to switch to the competition – if the company in question is offering them something, for instance, at a lower price – helping improve their profits too. So it’s important to keep showing your customers why they should stay with you and use your services.

The simplest and most effective way of achieving this is by building a customer loyalty programme. Investing time and energy in promoting customer loyalty should be an integral component of any business' marketing strategy. If you don’t invest in customer loyalty, you’re likely to lose more customers than you gain; not a successful business model. 

A good customer loyalty scheme should use profiling to log and monitor each customer’s interactions with your business. This should incorporate what they purchase, why, and when. This knowledge allows you to offer targeted and useful rewards, such as vouchers and offers on what they purchase. Rewards like this are much more likely to be used, as they will be genuinely useful to the recipient – and remember, loyal customers spend more. This results in more sales for you as the customer redeems their offers and spends more money with your business. 

Tailored and targeted rewards can also have a much higher perceived value than generic special offers. Bespoke offers don’t just make the customer feel valued, they also help enhance your relationship with them. This acts as proof to them that you understand their needs, further helping you in achieving customer loyalty. It also gives the impression that you’re taking time to focus on them, which helps promote a positive emotional response.

This positive response can be capitalised on and nurtured with careful use of communications. Keeping in touch, such as by email or newsletter, for instance, will help you build relationships and make your customers feel important, while ensuring they are kept aware of key pertinent offers. Regular customer engagement like this is another technique for you to pave the way to achieving customer loyalty.

 

We’d love to help you engage, motivate and inspire your team with our innovative Customer Loyalty services. To speak to a member of our award-winning team, call us on 0370 405 2020, email enquiries@corporaterewards.co.uk, or make a quick enquiry to find out how to drive your business performance today.   

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