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Five Strategies to Build and Increase Customer Loyalty

Customer loyalty doesn’t manifest out of thin air. It is gained through a series of strategies...

Huda Idris
Tech Editor, Content Ops Manager, and Software Advisor
Contributing Experts
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15+ Best Employee Rewards Programs (2024)

Acquiring new customers is great, but retaining existing ones and gaining their loyalty is cheaper and far more profitable for a business. Several studies have estimated that attracting new customers can be anywhere between 5-25 times more expensive than retaining existing ones. Another study by Bain & Company (the inventor of the Net Promoter System) along with Earl Sasser of Harvard Business School, has shown that even a mere 5% increase in customer retention can increase a company’s profit between 25-95%.

Now that we’ve established the importance of customer loyalty, let’s explore a few ways you can create and increase it. 

1 - Keep all lines of communication open

Circle chart showing lines of communication

Omnichannel availability isn’t an option anymore, it’s a basic expectation customers have of you. Customers should be able to easily reach you through any channel that’s convenient to them. Whether they do it via email, phone, social media, or live chat, someone from your team needs to be on the other end to respond to them ASAP.

To expedite communication with customers, ensure that you have scripts ready and processes in place to handle every type of customer interaction, whether it is a simple request for information or a complaint about issues they’ve experienced with your products and/or services. 

2 -  Encourage customer feedback and act on it 

Customers giving feedback

Customer feedback is crucial to retaining customers and gaining their loyalty. You won’t know how customers feel about your business if you don’t listen to them. 

The best way to gain structured customer feedback is through surveys. Customer Satisfaction (CSAT) and Customer Effort Score (CES) surveys are a great place to start. Through them, you’re able to find out if there are any factors that are causing your customers to have a negative experience with your products and/or services, as well as if there are any factors that are making customers exert more effort than necessary in interacting with your business. Once you’ve gathered this feedback, you can analyze it to understand how customers feel about you and what you can do to improve it. 

To automate surveys and feedback analysis, you may want to invest in a customer experience management (CEM) software. There are several CEM solutions available today that will help you deliver exceptional experiences based on real-time customer feedback. If you are in the market for one, check out our detailed review of the best customer experience management solutions available to make an informed decision.

3. Deliver exceptional customer service

Customer service specialists talking

Customer service is an important factor behind customers’ decision to continue supporting your business. Several studies have proven this, including the following: 

  • Microsoft’s State of Global Customer Service survey cites that 95% of respondents regard customer service as an important factor in their choice of and loyalty to a brand. Not only that, but 61% of those respondents have previously switched brands due to poor customer service.
  • Roughly 77% of consumers say that valuing their time is the most important thing a company can do to provide them with good service. - Forrester
  • Another study by Forrester estimated 69% of US customers shop more with retailers that offer consistent customer service both online and offline.

It’s important to note though that running a successful customer support operation becomes increasingly challenging as your customer base expands, and customer queries, requests, and incident reports continue to pile up on different channels. This is why you might want to consider investing in a help desk ticketing solution to keep track of all of your support tickets and handle them efficiently on a single platform. For more information on this, check out our guide to the best help desk software solutions available in 2020 for businesses of all sizes.

4. Personalize your marketing campaigns

Not only does impersonal communication fall on deaf ears, it also aggravates a great number of customers and drives them away. Several studies confirm this, including one by Marketo, estimating that 63% of consumers get annoyed by brands that blast generic advertising messages at them.

You have a better shot at gaining your customers’ loyalty if they feel like you’ve taken the time to get to know them. It’s time for you to make use of all this data you’ve been compiling on your customers and let it be the basis for all of your communication with them. Start sending customers relevant offers based on their purchasing histories. Celebrate special events and milestones such as their birthdays and the anniversary of when they first became a customer. Things like this go a long way in building customer relationships. 

To make all of the above even easier, you can invest in customer relationship management (CRM) or marketing automation software solutions such as Salesforce, Hubspot, Marketo, Autopilot, etc.

5 - Provide customers with rewards and incentives

A picture of giving rewards and incentives

Loyalty programs are a fantastic way to show appreciation to your customers for choosing your business over others. They’ve also proven to significantly improve a company’s bottom line as per the following studies: 

  • A Wirecard survey found that as many as 75% of customers said they are more likely to make further purchases from a business after receiving an incentive from it.
  • An e-commerce incentives case study estimated that by offering customers a loyalty program, e-commerce platforms can increase their average order quantity by as much as 319%.

There are different types of loyalty programs that can be created to keep existing customers engaged and attract new ones. These programs include point-based systems where customers collect points for purchase and non-purchase related actions such as friend referrals and product reviews; tiered loyalty systems that customers can advance through to earn bigger and better rewards; and paid subscription systems that your most loyal customers can participate it to enjoy exclusive perks that are worth the investment. 

Today, the majority of customer loyalty programs are implemented with the help of software solutions known as customer loyalty software or loyalty management solutions. To learn more, check out our detailed review of the best customer loyalty solutions available in 2021. 

Final Thoughts

No matter what line of business you’re in, customer loyalty is extremely important for you to reach and exceed your financial goals. 

Loyalty, however, isn’t a random act that appears out of thin air or is obtained with played out marketing gimmicks. It's an emotional investment that’s earned over time through a multitude of strategies that must come across as genuine. When implemented correctly, all of these strategies will pay off in gaining you a loyal customer base that will stick with your business for the long haul.

Huda Idris
Tech Editor, Content Ops Manager, and Software Advisor
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Huda is a seasoned editor with over 12 years of experience in content creation, strategy, marketing, and operations. Leveraging her bachelor's in English Literature, master's in Marketing Communications (MarCom), and years of experience in Tech, Huda writes and manages different types of content for SSR, particularly in the HR, Customer Support, and Productivity domains. In her spare time, she enjoys reading mystery novels and discovering cool spots in her city.

Also featured in HCM Technology Report, SmartRecruiters, RecruitingDaily, Guusto, Hireflix, and Mo.work

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