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If you are a local business owner, you’ve probably seen the words “customer loyalty” spread across every website and magazine dedicated to your niche. You’ve probably already read somewhere that 20% of your customers who are loyal to you are responsible for nearly 80% of your profit. However, let us dive into what customer loyalty actually means…
But what is customer loyalty anyway and how does it work?
Customer loyalty can basically be defined as a customer’s faithfulness and commitment to a business. It is a measure of how emotionally invested customers are in a brand and helps businesses to segment their customers by how often they purchase.
Take your thoughts, in this moment to big brands like Nike, Adidas, Costa Coffee, Starbucks, McDonald’s to name but a few. What do they have in common? They spend a whole lot of time and budget when it comes to focusing on their customer loyalty and as brands, they are super consistent with their quality of services.
Two examples of customer loyalty:
Example 1: Simon visits The Kings Head Pub 4 times a month because he likes the music they play and is always greeted with a smile by their friendly staff. In addition, he gets an extra pint of beer if he accumulates enough reward points by the end of the month. He chooses The Kings Head over all the other pubs in the area because he feels acknowledged, validated, and rewarded for his loyalty.
Example 2: Jenny is a mother of two kids and works at an ad agency as a creative professional. She visits a nail salon on the way home from work at least twice a month because she appreciates how they take hygiene very seriously. What’s more, they also offer her a free welcome drink before each manicure session. And she never has to reach for her wallet, because the nail salon has enrolled her into a members club with her card on file. In addition, she gets a 10% discount if she subscribes to their bi-monthly nail spa service.
As you can see, both Simon and Jenny feel acknowledged and respected and recognised by businesses they frequent use. They are also rewarded for their continued support in the form of rewards and exclusive membership benefits. Both the pub and nail salon have adopted a multi-factorial approach by considering the demographic details of their customers and giving them the rewards that are most likely to interest them and keep them motivated to return.
Customer loyalty is a complex strategy made possible by cutting-edge technology
Customer loyalty is a multi-pronged approach that brings real value to customers, so that they make repetitive purchases, it makes them feel a part of what you have, a sense of pride within their community. This helps small and relatively unknown businesses to keep their clientele close to them and tackle the competition head-on.
Customer loyalty is an essential marketing strategy in order to survive in a hyper-competitive world and establish real relationships with your customers.
By focusing on customer loyalty, and retention, this is a seriously valuable way to grow your business. For example, we know for every 100 followers a venue’s profile has on Roam, that business see’s an average increase of 30% in their profits.
Here are a few insights around customer loyalty
- It is not just conceptual and theoretical – it has practical applications.
- It is reliable. The results of loyalty programs are usually very consistent.
- It is valid. Customer loyalty really means what it claims to mean. It is a measure of how invested your customers are in your brand, and how faithful they feel. “Feel” is the keyword here, as much of customer loyalty is based on consumer psychology
- Emotions and stories sell, where as facts tell – make your customers feel like they are a part of your journey, and you respect their loyalty.
- It is measurable. Customer loyalty is not just a vague concept – you can track its success with the help of analytical tools.
- Technology is the basis for any successful loyalty program. Emerging fields such as artificial intelligence and automation play an important role in identifying and sustaining customer relationships while making loyalty programs work hard to achieve the results you desire…
Put a loyalty management tool to use
As you can see, customer loyalty is a tangible measure of how likely your customers are going to purchase your products and services again. It gives you a practical and realistic strategy to identify customers that are most likely to return.
Loyalty management tools such as Roam for Business help you put reward programmes in place that will sustain customer interest and loyalty.
To find out how you can use Roam to enhance customer loyalty, contact us today. By taking care of your customers, your customers will take care of you – it’s that simple!
