Resource Page: Customer Loyalty

Why is Customer Loyalty Important?

Customer loyalty is how willing a consumer is interacting with your business. You can measure how loyal a customer is based on how often they shop with you. Whether they interact with your social media or refer your brand to their family and friends. 

A positive experience is crucial for customers to become loyal to your business. We like to think of it as if experience is a key, trust would be the door it unlocks to long-lasting loyalty. By consistently providing customers with positive experiences, they’ll learn to trust your brand as one that delivers every time, and reward you with repeat purchases and referrals. 

Businesses need a model to increase the chances of nurturing loyalty. That model is no other than the customer journey. With this, you can map out loyalty-building strategies, with the six stages of customer loyalty in mind. You’ll create a customer journey experience that resonates at every touchpoint – from research to referral phase. Your customers will engage emotionally with your brand and feel valued at every step. 

But let’s consider why this makes customer loyalty important for your success. Well, did you know that it reduces your costs to service new customers? That’s because it encourages business models that promote self-service and community building. 

It should come as no surprise that loyal customers also leave better reviews. People love to rave about great brands, it empowers them because they were the one to find a quality product or service. Plus, it’s the ultimate form of social proof.  

Then there’s the economical benefits to your business. It’s easier to sell to existing customers compared to new ones. Loyal customers base are more open to trying new products and services too! And as for customer retention? Customer loyalty is a wonder weapon against attrition and churn. 

Ultimately, the whole point of customer loyalty is to convert prospects into something more than customers. It’s to make them your very own brand advocates. People who swear by your brand also champion it to others. 

Customer loyalty is important because it benefits consumers with great experiences and delivers massive ROI for your business. 

Benefits of Customer Loyalty

Prioritising customer loyalty is hugely beneficial because it differentiates you from competitors and keeps you ahead of what consumers perceive as valuable. Perception of value always changes. Loyalty trends right now for example point towards personalisation. When just a couple of years ago, consumers valued rewards and prizes. Now that’s not to say these are unimportant today. In fact, what we’re seeing is a surge in demand for rewards and prizes that are hyper-relevant to the individual.

Customer loyalty constantly evolves under the scrutiny of savvy consumers. It’s up to us as to deliver their expectations. But to do that we need the right tools. Customer loyalty platforms that make improved engagement and increased retention a reality. That drive innovation by facilitating brand partnerships, aligning products and services to consumer values, thereby deepening relationships to more meaningful ones with customers.

Those are jut some of the benefits experienced by businesses who nurture customer loyalty. Want more reasons to launch or revamp a customer loyalty programme?

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Benefits of Customer Satisfaction and Loyalty

It’s not simply that it’s more cost effective to market to your existing customers, there are many other benefits to having satisfied and loyal customers.

1) Word-of-mouth

Loyal customers are much more likely to recommend your business, and a massive 92% of consumers will trust recommendations from their friends, family and coworkers.

2) Positive reviews

Loyal customers tend to leave positive reviews and with 68% of consumers stating they use reviews as a way to choose between competitors, that can be very important

3) Brand community

Loyal customers can form the basis of a brand community that will allow you to refine your marketing and overall business strategy.

Ways of Creating Customer Loyalty

So, now that we’ve established just how important customer loyalty really is, how exactly do you start to build it? There are many, many customer loyalty strategies that can work absolute wonders for your business. However, some of the core strategies include:

1) Great customer service

Bad customer service is one of the biggest turn-offs for any customer. A customer that feels they have been ignored or mistreated is never going to be a loyal one, in fact, 89% of consumers have switched to a competitor following a poor customer experience. Customers remember when they’re treated well, and they also remember when they’re treated poorly. Ensuring your customers have a good experience with your brand can go a long way in ensuring they develop a sense of loyalty towards you.

2) Communicate with customers

By communicating, we don’t just mean talk at. It’s important to also listen to your customers, find out their pain points and how they feel you could improve your business. Perhaps the most crucial part is to actually action any intelligence you gain as a result. A customer that feels they have been listened to and understood will be much more likely to become loyal.

3) Build a community

A community can be one of the hardest things to create, but for brands, they can be an invaluable marketing and loyalty tool. A community makes people feel like they are part of something and helps to foster fierce loyalty. This can be done through your website or even on social media.

4) Use a customer loyalty rewards programme

Setting up a customer loyalty program is a great way to increase your customer loyalty, after all, they are designed to achieve just that! Rewarding your customers for purchasing your products is a great way to make your customers feel appreciated, create a tribe of loyal brand ambassadors and improve your customer retention rates.

Do Customer Loyalty Programmes Really Work?

There’s no denying that customer loyalty programmes are an effective tool for retaining customers as well as attracting new ones. In fact, among consumers using loyalty programmes, 47% spend more with a brand whose scheme they are a member of.

Loyalty programmes are incredibly effective in encouraging repeat purchases, creating a point of difference against competitors and encouraging referrals.

So the short answer is yes, loyalty programmes really do work!

Advantages of Customer Loyalty Schemes

Customer loyalty schemes have been given increased recognition in recent years for several reasons. First, because customer loyalty programs have a variety of benefits for companies, and secondly because they are now widely used and to an extent, have become an expected part of the consumer experience. But what are some of the main advantages of customer loyalty programs to businesses?

1) They encourage repeat purchases

Loyalty programs are a great way to keep your customers coming back for more. Customers are much more likely to come back and purchase more from your business because they want to earn themselves more rewards, whether it’s in the form of freebies or discounts.

And in case you weren’t already aware, repeat customers are incredibly valuable for your business. In fact, they spend 67% more than first-time customers.

2) They create a point of difference against your competitors

Most things in business can be matched. Price, service and location are just some of the factors that can cause a consumer to choose one business over another. However, one thing that is hard to match is an excellent customer loyalty program. Having a good loyalty program will make your customers feel as though they will be missing out on the benefits of your program if they shopped elsewhere.

3) They provide customer insights

Another benefit of customer loyalty programs is that they provide a great mechanism for businesses to understand their customers more, generate insights and utilise these.

4) They encourage referrals

If your customers are really enjoying your customer loyalty program, they are going to tell their friends and family about you. An added bonus is that word of mouth marketing is the most trusted form of advertising, and it doesn’t cost a penny!

This will drive new customers to your business, and then the brand loyalty building process starts again.

5) They lead to an increase in revenue

Loyalty programs are designed to create a sense of loyalty in your customers by rewarding them for purchasing from you. This increase in customer retention can lead to massive increases in revenue and profit. As mentioned above, increasing customer loyalty by just 5% can lead to increases in profit from 25% to 95%.

6) They can make your consumers feel more appreciated

Loyalty programs make your customers feel special and recognised, which further fuels their admiration and strengthens their relationship with your brand.

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