Everyone has competition: athletes, office workers, salesmen and even businesses. It’s a dog-eat-dog world out there and beating out another brand or business is not easy. Strategising and generating marketing plans well in advance is a great way to prepare, but don’t forget about customer loyalty.
Research suggests that “The probability of selling to an existing customer is between 60% and 70%”, while “The probability of selling to a new customer is only between 5% to 20%”. It’s a huge difference, so it makes sense to consider customer lifetime value and how you can build brand loyalty if you want to beat the big boys.
Let’s take a look at a few ways you can build up loyalty in your customer base…
The marketplace is saturated with businesses that fit nearly every niche and consumer desire. It can be difficult for your brand to cut through the noise and make a lasting impact, but there are things you can do to keep your customers and increase their lifetime value.
What is brand loyalty?
Brand Loyalty is when a customer is loyal to a brand because of positive experiences and quality products. They will choose your brand over another as they’ve used you before and trust you. They’ll come back again and again because of this trust, so they’re an invaluable commodity. This loyalty can have multiple benefits:
- Repeat purchases and increased Customer Lifetime Value (CLV)
- Recommending you to friends
- Potential for organic user content and reviews
- Increased marketing engagement
What is Customer Lifetime Value (CLV)?
Customer lifetime value (CLV) is what it says – the value of a customer over their lifetime purchasing with you. The idea is to extend that lifetime, if possible, to increase the overall value and offset the initial cost of acquiring them. There are ways to estimate this figure if you want to have something to work with.
Four ways to build customer loyalty and increase CLV
Building up customer loyalty to increase your average CLV is not an easy task – it will take time and effort, but the payoff could be a steady income stream of engaged clientele who active want to buy from you.
Here are several steps you can take to make sure you are well-placed to increase customer retention and improve consumer loyalty over the long term:
1. Be upfront
Honesty and communication are powerful tools in saturated markets. Being clear with your values and product details can help you cut through the noise and reach like-minded consumers.
Here are some ways to make your mark:
- Share your brand values and ensure they align with your target demographic
- Be clear about your ingredients
- Highlight your Unique Selling Points (USPs) on your packaging
Promoting your Vegan credentials or how you are the most affordable product on the market can help your ideal audience find you and stay with you.
2. Consider the Customer Experience
Customer experience has a huge impact on loyalty. Be honest – if you’ve ever had a negative or unsatisfactory experience with a brand, you’ve been put off buying from them again, haven’t you? Negative experiences can ruin a relationship, but that doesn’t mean positive ones will improve it. Customers expect a level of service as standard – it takes something above and beyond to make a difference.
It’s more than face to face interactions – the customer experience encompasses everything from their initial interests from an ad to aftercare and feedback. You need to be providing exemplary customer service and clear, consistent messaging from that very first touchpoint to encourage loyalty.
- Here are some ways to improve the customer experience:
- Ensure your message is honest and consistent
- Include ways for them to contact you, be it a website or address, on all your marketing and packaging.
- Answer customer queries promptly whether via email, snail mail, live chats or social media.
- Personalise your communications, recommendations and offers.
- Acting fast when there is an error or issue.
Remember to regularly review the customer journey and your messaging to ensure you can meet all the requirements for a positive experience.
3. Make use of feedback and surveys
Internal reviews and assessments are all well and good, but ascertaining what your customers think is handy if you want to maintain a positive experience and grow loyalty. If they feel heard, they will feel valued and have a more positive opinion of the brand.
Here are some ways you can help them feel heard:
- Acknowledge their opinions and comments on social media and online.
- Email them opportunities to take part in surveys.
- Ask them for product reviews after purchasing.
- Request feedback after any customer queries or customer service conversations.
4. Introduce a loyalty programme
Most of these ideas are based on positive customer service actions and communications, but one of the most effective ways to encourage loyalty is with a loyalty programme.
Whether it’s a loyalty card you can stamp, exclusive discount emails, a points system or freebies, there are loads of ways to reward your customers for being loyal to you.
The key is to make sure it offers real value to your customers and doesn’t negatively impact your profit margin. So, make sure to only offer freebies on products that have low manufacturing costs and that any customer cost to attain the rewards offsets the cost to you.
These four tips may seem straightforward and easy to put in place, but time is needed for them to work in the way you need, so don’t be discouraged if you don’t see an immediate impact. After all, Customer Lifetime Value is a marathon, not a sprint, and you need to play the long game if you want to make sure your business is successful for longer.
Retaining customers and maximising their CLV is a great way for you to stand out from the crowd of businesses around you and ensure the longevity of your sales. Just remember to be consistent, be clear and make your customer feel valued and acknowledged.