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Why build customer loyalty
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Updated 29 January 2024

Why build customer loyalty to ensure the growth of your business

In order for a company to grow over time, it is necessary to create lasting ties with customers; one must, in essence, build customer loyalty. But what does this term mean and why is this activity so important? In the next few lines you will find everything you absolutely must know in order to succeed in customer retention effectively.

 

What is meant by customer loyalty

Customer loyalty means building and nurturing a positive relationship between the customer and the company. The concept of customer retention, or customer loyalty, refers to the retention of existing customers and encompasses within it all actions (including marketing activities) aimed at cultivating and supporting customer satisfaction.

In more concrete terms, in order to improve the bond between the company and the customer. it is necessary, for example, to be kind to him and make him feel comfortable (and not abandoned) throughout his buying experience. In this regard, it is essential to show helpfulness and provide the necessary information, clarification and advice so that the customer can complete the purchase of product or service to his satisfaction.

 

All the benefits of promoting customer loyalty

There are several reasons why promoting practices aimed at customer loyalty pays off: it should be made clear from the outset first of all that all companies, startups included, need customers who repeatedly buy the products or services offered to them. After all, Michael LeBoeuf also teaches:

“A successful startup is built on a base of satisfied and loyal customers who return.”

 

A loyal customer is a stable source of income

Loyal customers represent a more stable source of income than could be provided by any new customers acquired by the company.

Many experts agree that it is easier to sell products or services to people who have already purchased from the company in the past than to a new customer. Particularly useful practices in this regard are, for example, cross-selling and up-selling. Easier, in this case, also means cheaper: the costs associated with retaining an existing customer, in fact, are often higher than the expense required to win a new one.

There is another aspect to consider: a loyal customer tends to make repeated purchases and naturally turn into a kind of ambassador of the brand, recommending the company’s products or services within his network of contacts.

 

How to build customer loyalty by creating an emotional bond

Now is the time to figure out how, concretely, you can build customer loyalty. Creating an emotional connection is crucial: social media is a very valuable channel in this regard both because it allows you to tell the brand story in a personal and engaging way and because it allows you to offer fast and personalized customer service, with immediate answers and solutions. Not only that: social media is also very useful because it gives the opportunity to make the customer experience unified and connected.

Among the most well-known and widely used customer loyalty strategies, a special mention can only go to loyalty programs, such as points programs (for each purchase, the customer accumulates points to get to the point of being able to get a discount or a free gift).

Other useful strategies, as already pointed out, are up-selling (a strategy of suggesting to the customer the purchase of the higher value-added version of a certain product in which he or she has already shown interest) and cross-selling (recommending to the customer additional products or services related to the product of his or her interest).

Obviously, for these strategies to be possible, it is necessary to know the customer thoroughly. Collecting, grouping, and analyzing data on all the various touch points between the customer and the brand (perhaps with the help of CRM software) allows you to reconstruct his or her buying journey and map his or her entire experience, so that you can present the right proposition at the right time.

Remember that, in the short run, it is relatively easy to get a customer to return to purchase, thanks to “easy” gimmicks such as discounts or freebies; in the long run, however, this is not enough. It is essential to stay in touch with the customer and, once permission has been obtained to send promotional communications (e.g., via e-mail or WhatsApp), to send messages (occasionally or periodically) to make them aware of current promotions or the arrival of new products or services.

Again, communications should be tailored to their interests. In this regard, a simple but effective move can be to accompany birthday greetings to the customer with an ad hoc offer exclusively reserved for them.

 

New customers vs old customers, what to invest in?

In the previous lines, we pointed out the fact that experts now agree that it is easier and cheaper to invest in existing customers rather than new customers for future sales. There is a need, however, for clarification: customer retention does not mean abandoning the search for new consumers to win over. There are many ways to attract potential customers, as should be clear to you by now, and some, such as SEO, even at “zero” (or nearly zero) cost.

Nicola Zanetti

Founder B-PlanNow® | Startup mentor | Startup consulting & marketing strategist | Leading startup to scaleup | Private angel investor | Ecommerce Manager | Professional trainer | Book writer

info@b-plannow.com

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