Creating loyal customers is a vital part of establishing and marketing your business. Not only does it give you a steady flow of repeat business, it also helps you build a team of brand ambassadors. This is a great organic tool for growth. 81% of people trust recommendations from friends or family over a business, while word-of-mouth customers tend to have twice the LTV of traditionally acquired customers.
Four achievable steps to creating loyal customers are:
- Offering discounts
- Offering referral rewards
- Creating brand partnerships
- Offering quick responses and engagement
Why are loyal customers important?
Leading business consultancy Bain’s research shows that an increase in customer retention of just 5% can equate to an increase in profit of 25%. This is because repeat customers are more likely to spend more with your brand, resulting in your business spending less on operating costs.
Some of today’s biggest brands have built armies of megafans that queue for hours in the rain for a new iPhone or set up multiple computers for the latest GymShark release.
But customer loyalty doesn’t have to mean overnight queues or crashed servers. It can simply mean a customer base that truly values your business. Of course, offering high quality goods and services is the most important part of this. But there are a few simple low-cost strategies and marketing techniques you can use to start building some trust and loyalty between your business and its customers.
1. Offering Discounts
It might seem simple, but discounts are an incredibly effective way to attract customers to your business. 29% of online shoppers will complete a purchase they didn’t originally intend to if it has a heavy discount.
You could also consider adding a ‘loss leader’ product. This is a heavily discounted product that’s sole aim is to attract customers to your business and its more high-value profitable products.
If customers begin to view your business as good value and a place to get deals and discounts, they’ll likely return and spread the word.
2. Offering Referral Rewards
Referrals are a great way to build customer loyalty. Not only do your existing customers value the rewards on offer, you’re able to turn them into highly effective salespeople. As we already mentioned, 81% of people trust recommendations from friends or family over a business.
According to Indeed, “referral programs help build and nurture long-term relations with customers by providing insights into their motivations and expectations.” This means customers involved in your referral program are more likely to stay loyal. Plus, this is far more cost effective than finding new customers.
A great example of a top referral programme was AirBnB’s. Its initial referral programme led to a 900% year-on-year growth for first-time bookings.
3. Create Brand Partnerships
According to Forbes Magazine, “Partnership marketing is an effective way for two or more businesses to combine forces and reach a broader audience. These campaigns allow your business to collaborate with a complementary business with a similar target market for a big mutual benefit.”
But not only does it grow your customer base, it also fosters loyalty – especially if combined with a discount. This is because a partnership is essentially a value-add service. For example, if you’re a clothing brand, you can partner with a footwear brand to offer your customers shoes in a similar style to the clothes your business is loved for.
4. Offering Quick Responses and Engagement
96% of customers say customer service is important in their choice of loyalty to a brand, so making sure you have people available to give quick and helpful advice is a must for loyalty building. While 47% of customers say they’ll stop buying from a company if they have a subpar experience.
Plus, when done right you can use it as a form of community engagement and brand extension – which is almost as important. For over 50% of customers, feeling part of a brand-community is important in securing their loyalty.
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