Gaining customer loyalty is a sure fire way to increase your profitability, whilst keeping your cost base relatively stable. But it’s a very difficult thing to achieve, as loyalty is more than just discounts and rewards points…
Customers are loyal because of quality products, experiences and the added benefits you provide (such as solving problems, increasing their profitability or helping them to reduce cost).
For an organisation to build loyalty, it needs to create the best experience for its customers. So, before you launch a new loyalty scheme or change an existing one, you need to have a clear understanding of what drives a customer to be loyal to you.
Loyalty looks different for every organisation. For some it means customers shop weekly. Others may need to be in the top 3 choices of the customers decision making process.
Analyse the behaviors of your most loyal customers. Which engagement channels do they prefer? Do they usually make big purchases? Are they buying everything they could from you or just buying selected products and services?
The more ways a customer engages with you the more likely they are to be a loyal customer. Do they engage with you on social media? Are they recommending your products & services to other organisations or their friends? Are they helping you to create a great name in the market place?
It’s a great idea to segment your customers and identify who are the most loyal. Things you need to measure are the breadth of products they buy from you, the number of ways they communicate with you (phone, email & social media), how many times they buy, the typical size of their transactions and how many time they recommend you.
Once you have profiled and understand the value and activities of your most loyal customers. The next step is to identify similar (size & type) existing customers, who (for what ever reason) aren’t yet as advanced up the loyalty ladder and invest in them. As you have now identified that they have the greatest potential for loyalty towards you.
Now you have this information, you can go as far as measuring the monetary value your most loyal customers bring to your business, against the next tier you have earmarked to progress up the ladder of loyalty. What’s the average difference in spend? Use this number to calculate the value of marketing you can afford to spend on them, to encourage higher engagement and loyalty.
Be warned, making assumptions about customers can lead a loyalty scheme in the complete wrong direction. Costing lots of money and wasting time. The only way to truly understand what customers want is to ask them.
By identifying what delights customers and prospects, you can create solutions that better align with your customers wants and drive the desired behaviors that your organisation requires. This enables you to develop deeper relationships with your customers to lead them up the ladder of loyalty, through more personalised experiences.
The initial reason a customer engages with an organisation or signs up for a loyalty scheme can be because of a discount or a special promotion. But ultimately a customer only stays engaged because of your product, the perceived benefits (solving a problem, increasing profitability or reducing cost), the experience and the relationship.
The more a customer engages with an organisation, the more you should look to acknowledge them in some positive way. Things like, providing special and exclusive customer access, experiences and unique industry sector schemes can really be a difference and make you stand out in the market.
A good example of this is our unique profit sharing scheme we have created and launched for charity organisations…
Our aim is to provide charities with the right printing technology, whilst giving them a way to earn recurring donations back to support the communities they represent. So, for every colour page a charity prints we are giving them 1p back in the form of a donation. This could lead to £1,000’s being donated back to support the communities in which we operate. Find out more about it here.
Whether supporting you through regular purchases, or recommending you through word of mouth and social media, loyal customers are essential to your long-term success. Loyalty is not built overnight. It comes from timely, relevant engagement and results in customers consciously choosing to do business with you time and again.
Loyal customers are the most valuable. And before creating a strategy to engage customers, we find it’s best to have a clear definition of what we need to do to create loyalty. We are hoping the information we have shared will help you to develop long-term customer relationships and ultimately drive more customer loyalty for your organisation.
