How to Build Fierce Customer Loyalty for Your Brand
I’m not a person who goes fishing. Never have been. But I do know the old adage about teaching someone else how to do it. This adage has a business analogy: Have a customer buy once, and have a business for a day. Teach a customer to buy over and over again, and have a business for life. This is the wisdom of building fierce customer loyalty. And in this article, we’ll talk about how to build it in your customers.
You may already know that it costs 5 to 25x more money to acquire a new customer than to retain an existing one, according to Harvard Business Review. That’s why converting one-time shoppers into lifetime advocates of your business is so valuable to your sustained success.
In this article, I will walk you through the key concepts, basic strategies, and effective methods for building fiercely loyal customers for your business. By the end, you’ll be able to start implementing the methods you need to take your business to the next level.
Defining Customer Loyalty
A loyal customer may be defined as a customer who has the tendency to continue doing business with a particular business or brand, over that business’s competitors, during an extended period of time.
It is a measure of how likely a customer is to do things like:
Repeatedly purchase products or services from your company
Recommend your products or services to others
Forgive you if something goes wrong with their purchase
Be less sensitive to price increases
Engage with your brand positively on social media
In short, customer loyalty is about how much customers value your brand. The more they value your business, the more success you will have. Not just in the present moment but in the long run. That’s why building customer loyalty is so key to both your present and future success. But what percentage of your customers can you expect to be loyal to your brand? Well, my friends, I’m glad you asked.
If you build loyalty, loyalty will come.
What Percentage of Customers Tend To Be Loyal?
The percentage of loyal customers can vary significantly depending on
Your industry
Your specific company
The metrics you use to define "loyalty."
However, some general observations can be made about the average rate of customer loyalty for businesses. According to a study by Ebbo, 67% of consumers say they buy from their favorite brand at least once a month. From the same study, nearly 50% of customers tell their friends about their favorite brands. And nearly 70% of respondents said their favorite brands are part of who they are. In other words, their brand loyalty has even become part of their identity.
An important rule to remember is the Pareto principle or the 80/20 rule: This principle states that 80% of your results will come from 20% of your causes. In other words, a small number of your customers will be responsible for a large bulk of your sales or revenue. So, you should focus your business on building and maintaining this small but fiercely loyal set of your overall customer base.
On the other hand, a report by Accenture found that 54 percent of U.S. consumers have switched brands in the past year. This shows the threat of losing customers who are not loyal, but also the opportunity for you to build loyal customers out of those not or no longer dedicated to your competitors.
What Are the Benefits of Building Customer Loyalty?
Building fierce customer loyalty can bring many benefits to your brand. For starters, loyal customers will generally have a higher Lifetime Customer Value (LCV) than less loyal customers. That is because they will continue to purchase multiple products or services during the lifetime of the relationship with your business. And they may also be more willing to upgrade to premium, higher-priced products, or be open to various ways of cross-selling and up-selling.
Loyal customers are also less expensive over the long term. You have to invest to acquire them in the beginning (like any other customer). But because they are loyal, you won’t have to spend as much to keep them returning to your business over time. This will cut down on your advertising or other customer acquisition costs and retention costs over time.
Another way that fiercely loyal customers can benefit your business is their willingness to write great online reviews and boost your reputation. This can help you lower boundaries and costs to acquiring new customers - who also have the chance to become fiercely loyal customers. That’s why it’s important to have your most loyal customers review your products and services and spread the good word about your business everywhere.
Tay Tay says it better be good.
How To Build Loyal Customers
The most important way to build loyal customers is by providing them with a great product, or service. In other words, by presenting them with terrific value for their purchase. This is how you delight your customers. It is always best to underpromise and overdeliver. However, many businesses fail to implement this and therefore are suboptimal when it comes to building customer loyalty over time. If your product or service isn’t good, nothing else is going to matter in the long run. This is the stone-hard foundation upon which your customer loyalty will be based.
To go along with your excellent product or service, you also need terrific customer service. Customer service is there to provide your customers support when and after they purchase your items. If something unexpected, negative, or problematic happens during or after the transaction, customer service is there to find a solution that pleases the customer. It will make them happy to be doing business with your company rather than someone else. This will often mean you are going above and beyond the service that a standard company may provide. But your business isn’t just a standard company. Your business is better.
Price does also matter when building loyal customers. But the goal isn’t necessarily to be the least expensive option or have the “best” price unless that is your general business model. The goal is to provide a price your customers think is at the very least fair, and potentially much better better than that. Customers will often be happy to pay premium prices for premium goods and services, especially if they perceive they are getting a good deal relative to other similar competitors. This is about maximizing value for your customers to help you maximize long-term profits.
Finally, Personalization is also important for building customer loyalty. Personalization means getting to know them as an individual or group, not just as a faceless customer. They want to feel an emotional connection with your brand, your business, and especially you and any of your people. They want to feel like you are as invested in their success as they are in you as a provider of items they need. This can often be the extra mile or special sauce that truly builds the most fiercely loyal customers.
Don’t wait for the future to start building fiercely loyal customers. Start today. And if you need more reasons why focusing on long-term customer satisfaction helps you optimize both your profits and your ethics at the same time, check out my blog post on that very topic now.