All businesses require customers to survive as well as thrive. It is not necessary that every customer remains loyal. Companies having less loyal customers have to constantly put effort, time and money to draw in fresh clients. Whereas, companies having loyal customers get repeat business from the same customer base. Also loyal customers act as brand ambassadors and spread positive word of mouth. It is obvious that customer loyalty is necessary and matters a lot. Businesses that don’t give importance to customer loyalty eventually lose more customers than they gain.
Apple is an apt model of customer loyalty. The latter is responsible for the brand’s performance enjoying a staggering 87% loyalty among their users. This includes genuine brand promoters who always pre-order fresh Apple products. As there are sizable amount of folk loyal to Apple, it gives others confidence who think if the loyal customers like it so much even they will. This translates into enterprise and commercial success.
In order to ensure customer loyalty companies have to do something extra. We look at how to ensure customer loyalty.
Customer Loyalty Involves Engagement as well as Building Relationships
Engagement as well as interactions result in relationships. You need to go beyond a traditional company and have a bond with the customers. It is natural that customers in a relationship demonstrate greater loyalty. Remember that your enterprise is privileged to have customers and not vice-versa. It is imperative that customers are treated well and with utmost respect.
We look at the necessity of customer loyalty
Protection from Price Competition-
Currently competitors offer low prices. Many customers purchase items due to low prices. However if you have a loyal customer, he/she is unlikely to be swayed by low prices. Make sure you offer low prices without compromising on quality and level of customer service.
Loyal Customers Results in Repeat Business
Loyal customers are likely to do more than one deal. 20% of the existing customers are responsible for 80% of a business’s profits. It makes sense to focus on this 20% to maximize return on investment. Loyal customer have a higher probability of exploring and testing different items. They will shell out more money as a result of the trust they have in your business.
Defeat the Competition
If loyal customers believe they are receiving real value, high levels of quality as well as service from you they are unlikely to explore alternatives. The more powerful your base of loyal customers, the less the allure of existing competitors. It is the best defense against existing rivals. A truly loyal customer will not even consider alternatives.
Establishing and maintaining a loyal customer group makes great commercial sense. In other words your business can save on existing expenditure and generate additional funds. Attracting loyal customers cost less thus increasing business profitability. They educate the new customers about your business thus slashing advertising cost. They are likely to spend more on your business’s goods and services thus ramping up revenues.
Get Benefit of Doubt
In the Internet era, bad publicity service travels fast. It is inevitable that businesses make mistakes. Here the loyal customers give the benefit of doubt to the company because of a long standing and positive relationship.
The economic advantages of customer loyalty are easily measurable. When your business consistently supplies greater value and win customer loyalty, market share percentage, revenues as well as profitability all rise, and the expenditure of acquiring new customers is slashed.