Businesses and Customers are in a constant conversation that goes beyond words. This relationship is not based on a singular element. Multiple factors together constitute in this lasting conversation.
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What is customer loyalty?
Customer loyalty is when people choose to use a particular brand, service or product over the others for an extended period of time.
One such great example of customer loyalty is Amazon. It doesn’t sell any products of its own, still, customers always tend to shop at Amazon. With impeccable customer service, Amazon has its users enticed.
Thus we can consider Amazon to be the epitome of customer loyalty.
In a nutshell, consumers devotion to a certain product, service or a brand can be termed as customer loyalty.
Stop fiddling with your pricing, stop tinkering with your technology, stop fishing for likes on Facebook.
And start engaging with your customers one on one: Checking on them, hearing what they have to say, letting them know that their business matters to you and that they matter to you. — Forbes
However, the terms Customer loyalty and brand loyalty are often confused as the same. But, they are not.
Customer loyalty arises from their pockets and brand loyalty arises from their minds. Meaning, customers who are brand loyal identify themselves with the values of the company. Offers, loyalty programs, Valued customer programs etc are factors that retain customer loyalty.
What is the importance of Customer Loyalty?
If your customers return or as you seek new customers, a need arises to present a traditional brand which ensures customers that their money is well spent & on a product or service with strong assurance or service.
A 5% increase in customer loyalty would increase the average profit per customer by 25% – 100%. – The Loyalty Effect
Here are 3 reasons why Customer Loyalty is essential to your business.
1. They are the primary drivers of your business growth
These customers frequent your product or service and are satisfied with your business. Such customers are more likely to endorse positive feedback which helps in bringing in more audience.
They stay for a longer period of time and buy more often than other customers.
2. You are protected from direct cut-throat competition
If new players enter the niche, prices are bound to become competitive. A business without enough loyal customers gets affected the most. In such cases, your loyal customers are less likely to switch to a competitor with cheap prices.
Price sensitivity does not affect your business since loyal customers are likely to return to make a purchase.
3. They act as brand endorsers or representatives
Just like bad experiences, the good, positive experiences are also shared by customers to their peers. And people are more likely to listen to their friends & family rather than total strangers.
Your loyal customers are more likely to bring in new customers and recommend your brand or service. They act as your most trusted brand ambassadors.
4. They offer productive, valuable feedback
Without darkness, there cannot be light. Without mistakes, there cannot be lessons. Without feedback, a business cannot grow. Knowing what your customers want and providing them with it is what helps a business multiply.
Loyal customers provide the most valuable feedback. They trust your business and a look forward to a reciprocal alliance. They know that if your business grows, it will directly affect their experience with your business. Listen to them, the seldom misguide you.
Treat your customers the way you want to be treated and you will never fail as a business.
