Building a small business is no small task. You are required to juggle a lot of tasks and activities. You will define the strategy, execute the strategy, evaluate the business,…
Building a small business is no small task. You are required to juggle a lot of tasks and activities. You will define the strategy, execute the strategy, evaluate the business, manage the business, do the financial accounting and do every other job you simply can’t afford to outsource. And to top that up, you must build customer loyalty. This is as important as any other business activity you carry out. The PR Newswire estimates that by 2020, the customer loyalty market would be worth 4.0 billion USD. If you think that is too much, think again.
Loyal Customers are the most Important
Research has shown that loyal customers buy more than new customers. A customer who feels a connection with your brand is more likely to purchase more products than a would-be customer. The Gartner Group estimates that 20% of your loyal clients contribute about 80% of your earnings. They will have more willingness to try new products and services from your business than others.
Loyal Customers are cheap to sell to
The average cost to sell to an existing customer is far less than the cost to sell to a new one. An existing customer would be more willing and able than other customers to find a solution to their problem from your self-service portal instead of calling you and requesting personal service. Since they are more knowledgeable about your business, they make it easier to be served, and you know, easier is usually cheaper. Also, they do not require marketing because they already know your brand. It is a win-win to have loyal customers.
Loyal Customers sell for you
When customers like a product or service they tell others. If they are loyal, they tell even more people. For instance, your loyal customers are those who would refer their connections to you when they want the particular service you’re providing. This would also help reduce your marketing cost because you have unofficial and unpaid brand ambassadors. TechOneStop suggests that a satisfied customer shares a good experience with 9 other people. They also say that a dissatisfied customer tells 22 people, so you have to ensure that every customer leaves satisfied.
Loyal Customers eliminate your competition
This Marketing Mentor post explains that loyal customers are less likely to stray towards the competition, as if they are completely happy with you a competitor simply won’t appeal. When customers believe that they get good value for their money from you, they don’t think of going elsewhere. This eliminates the risk of losing customers to your competition.
Once you’ve managed to sort the internal aspects of your business like shop protection, you can finally make the effort to improving customer loyalty. You should know it is directly connected to keeping you in business. It also doubles up as customer engagement which creates a positive connection with the customer.
They are more likely to give useful feedback and suggestions which ultimately help the business. An engaged customer is a gift to your business. You are lucky to have them and not the other way round. So, develop good customer loyalty and see your business grow in leaps and bounds.