1. What is customer loyalty and why is it important?
It costs a fraction of the price to sell to previous customers, rather than to acquire customers that have never purchased from your business before. This highlights the importance of customer loyalty – a loyal customer not only makes repeat purchases from you, but they buy regularly across product and service lines, and significantly, they refer others. They are also highly immune to the pull of your competitors. These are all significant cost-saving activities for your business.
Customer purchases and repurchases are factors that directly affect your bottom line, so it’s a no brainer, if you want to build a business that thrives, that you must build customer loyalty. This is true regardless of whether you deliver your product or service online, or face-to-face. A customer will buy from you if they perceive your product or service to be providing value to them or resolving a problem they have. It is highly important to keep in the back of your mind that trust and integrity are implicit in your customer’s decision making, both off- and online.
2. Identify your best customers and seek to understand them
Fundamental to building customer loyalty is understanding what makes your loyal customers loyal. If you are an existing business, identify your 5 to10 best customers. If your business is larger, try identifying a few customer segments. These may be those which generate the highest revenue for your business, or who have made the highest number of repeat purchases.
To be continued…
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About the Author: Angeline Zaghloul is an expert in business strategy, client management and business processes, and is the Principal of Peer Business Consulting, a Sydney-based consultancy providing strategy and operations support to startups and small businesses.
* Portrait by Markus Jaaskelainen.