How Can a Business Improve Customer Loyalty?
Mark Hale ‐ September 28, 2015
Every business has an interest in building customer loyalty. Repeat business is a huge benefit. Lets look at the types of customer loyalty a business can experience:
- The first type of customer loyalty is convenience. This type of customer loyalty really isn’t loyalty because it is not an earned loyalty, but is based on convenience of store location for the consumer.
- The second type of customer loyalty that is the most beneficial is the result of customer satisfaction and a good buying experience combined with continued marketing efforts after the sale.
If you are experiencing a wild roller coaster effect with your sales, a couple things could be causing this and one of reasons is that you have too much of the first type of customer loyalty.
Your business may be geographically more convenient, but your return business is sagging. Restaurants often open up and get this type of loyalty initially. They are new. They are close by and people want try the new restaurant in town. But due poor quality or bad service, soon the restaurant’s sales are roller coastering and eventually slides down to a very low point. Most retail type businesses, to a greater or lesser degree, have the first type customer loyalty. A good location that is convenient is not a bad thing, in fact if your quality and service are consistent and good, combine convenience of location with a targeted direct marketing program and your business will boom.
The second type customer loyalty your customers are committed to your business because of positive past experiences. You see it with businesses like Starbucks. Customers of Starbucks are fiercely loyal and are regular in their purchases. Price does not even matter when Starbucks is concerned. They are selling $5.00 cups of coffee and people line up every morning for their Starbucks fix.
So the illustration I wanted to make is that it really does not matter what type of loyalty you have to start with, but what you do to nurture it and grow it will make the difference. For retail and non-retail business models it is very important the first impressions you create. The first step may seem obvious, but nonetheless is vital. What type of first impression is your business creating:
- Is your store clean, neat and organized?
- Do you have enough employees to help the customer?
- Are your employee’s appearances clean and neat?
- Are your employees trained and confident?
The second part of the equation is your marketing and promotion:
- Is your promotion targeted?
- Are you promoting regularly?
- Do you have a welcome kit for new clients?
- Does your sales material tie together and have a common theme?
- Do you have a referral program in place?
- Are you using social media to stimulate referrals and build loyalty?
Step #1: A policy to do whatever is needed to handle unhappy customers.
It is vital, vital, vital that you have policy and procedure to handle unhappy customers. It used to be that one unhappy customer would tell 18 – 20 people about their bad experience. Today, with social media and online reviews an unhappy customer can tell tens of thousands of people how bad you are. Think of social media as word of mouth on steroids times ten and you will have an idea of the tremendous potential of social media for the good or bad of your business.
Most of the time unhappy customers want to talk to someone and want someone to listen. Whoever that employee is in your company cannot be uppity or make the customer wrong, they have to listen, have empathy and be willing to do what it takes to satisfy the customer. Sam Walton had saying, “There is only one boss. The customer. And he can fire everybody in the company from chairman on down, simply by spending his money somewhere else.”
Step #2: Build your brand by working on customer loyalty. The essence of building customer loyalty is in the quality of communication you have with the customer after the sale. The more often you reach out to them and touch your customers after the sale, the better.
- When they buy, do you give them a reason to come back? A coupon works well.
- Do you give them a written and professionally printed warranty?
- Do you send follow up postcards to your customers promoting special sales; giving them reasons to buy from you again.
- Do you mail monthly or quarterly newsletters to your customers? Mail is better than email. People already get way to many emails and do not pay attention as much to emails anymore.
- Do you call them regularly to see how they are doing and if they need help with anything?
- Do you have someone whose job it is to call customers after their purchase and see how they are doing and if they are happy with their purchase?
- If applicable to your business, send them a new customer welcome kit. They are very effective and are a good first step in building a relationship.
I hope this helps you and if we can do anything to help you please give us a call!
©2005-2015 Mark Hale, All Rights Reserved.
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