CUSTOMER LOYALTY

5 Steps to Cultivating Customer Loyalty in Business

Building Customer Loyalty: Strategies and Examples for Success

This is part 2 of a 2-part series on cultivating customer loyalty. In part 1 we discussed: the 5 types of loyalty, which type you should consider and how to measure and improve each.

Cultivating Customer Loyalty: Understanding and Maximizing the Different Types of Loyalty for Your…

It’s worth noting that building customer loyalty is an ongoing process, and it requires a long-term commitment from businesses. It’s important to regularly evaluate and assess your loyalty efforts to ensure that they are effective and aligned with the needs of your customers. This may require making adjustments or changes to your loyalty programs or strategies as needed.

5 Steps to Cultivating Customer Loyalty?

1. Loyalty programs: Loyalty programs can be an effective way to build transactional loyalty by offering rewards and incentives for making purchases.
2. Social media: Social media platforms can be a great way to connect with customers and build loyalty. By engaging with customers on social media, businesses can create a more personal connection and stay top-of-mind with their audience.
3. Content marketing: Content marketing can be a powerful tool for building loyalty by providing value to customers through educational or informative content. By consistently producing high-quality content that is relevant to your customer’s needs and interests, you can build a loyal following.
4. Customer service: Providing excellent customer service is a key factor in building customer loyalty. By being responsive and helpful to customers, you can create a positive and memorable experience that will encourage them to continue doing business with you.
5. Community building: Building a sense of community among your customers can also help to cultivate loyalty. This can be done through things like creating online forums or hosting events that bring customers together.

Here are a few examples of how companies have successfully built customer loyalty:

Starbucks has implemented a loyalty program called Starbucks Rewards, which offers customers points for purchases that can be redeemed for free food and drinks. According to Starbucks, the program has helped to drive customer loyalty and increase customer engagement. In a 2018 earnings call, Starbucks reported that the loyalty program had over 16 million active members in the U.S. and that these members accounted for over 50% of the company’s sales.

Starbucks loyalty program

Amazon has built customer loyalty through a combination of convenience, price, and a wide selection of products. According to a 2019 survey, Amazon was the most popular online retailer among U.S. consumers, with 79% of respondents saying that they had shopped on the site in the past month. In addition, a survey conducted by market research firm YouGov found that Amazon was the most recommended online retailer among U.S. consumers, with 64% of respondents saying that they would recommend the site to a friend.

Zappos, an online retailer known for its exceptional customer service, has also built a loyal customer base. The company has a customer loyalty rate of 75%, meaning that 75% of its customers make repeat purchases. In addition, Zappos has a net promoter score (NPS) of 69, which is significantly higher than the average NPS of 30 for e-commerce companies. The company’s commitment to customer service has been a key factor in building customer loyalty.

Zappos Rewards program

What tactics can you use to maximize loyalty?

1. Personalization: Personalizing the customer experience, for example, through targeted marketing or personalized recommendations, can help to create a more meaningful connection with customers.
2. Consistency: Consistently delivering high-quality products or services can help to build trust and reliability with customers, encouraging them to return again and again.
3. Innovation: Staying ahead of the curve with new and innovative offerings can help to differentiate your business and keep customers engaged.
4. Communication: Regular communication with customers, through email, SMS, or other channels, can help to keep your business top-of-mind and build a relationship over time.
5. Responsiveness: Rapidly addressing and resolving customer issues can help to demonstrate a commitment to the customer experience and build trust.
6. Value: Offering value to customers, such as special promotions or discounts, can help to build goodwill and encourage repeat business. It’s also worth noting that building customer loyalty is an ongoing process and it requires a long-term commitment from businesses, which may need to regularly evaluate and adjust their loyalty efforts.

But doesn't it depend on my business?

yes absolutely, depending on the type of your business, you have different levers at your disposal

Retail businesses: Retail businesses can cultivate customer loyalty through a variety of strategies, including loyalty programs, personalization, and excellent customer service. For example, a retail clothing store could offer a loyalty program that rewards customers for making purchases, personalized recommendations for customers based on their purchase history and preferences and provide excellent customer service through personalized styling advice.

Service-based businesses: Service-based businesses can cultivate customer loyalty by focusing on the customer experience and providing excellent customer service. For example, a hair salon could build loyalty by consistently providing high-quality services and offering personalized recommendations and advice to customers.

Online businesses: Online businesses can cultivate customer loyalty through personalization, social media engagement, and excellent customer service. For example, an e-commerce business could use data to make personalized product recommendations to customers, engage with customers on social media to build a personal connection, and offer excellent customer service through fast and efficient responses to customer inquiries and concerns.

Not-for-profit organizations: Not-for-profit organizations can cultivate customer loyalty by building a sense of community and shared values among their supporters. For example, a charity organization could build loyalty by consistently communicating its mission and impact to supporters, involving supporters in their work through volunteer opportunities, and recognizing and rewarding the supporters that have been with the organization for a long time.

In summary, regardless of the type of business, cultivating customer loyalty typically requires a combination of strategies that are tailored to the specific needs of the business and its customers. By understanding their customers’ needs and preferences, businesses can develop effective loyalty programs and strategies that will help to attract and retain customers. While different industries and business models may require different strategies, some key elements such as providing excellent customer service, communication and value, personalization, and building a sense of community and shared values often translate well across different sectors and are critical to cultivating long-lasting customer loyalty.