Delivering exceptional customer service is the cornerstone of building customer loyalty. Loyal customers are more likely to return and spend more money with your business. Furthermore, loyal customers are more likely to generate positive word of mouth, which plays a vital role in the growth and reputation of your business.

When it comes to business growth and profitability, it’s much easier and more cost-effective to retain loyal customers than to acquire new ones. So, how do we build customer loyalty?

Customers have a strong desire for personalised experiences, attentive support, and swift resolutions. They want to feel valued, listened to, and satisfied throughout their interactions with your business. In today’s competitive market, outstanding customer service can truly set your business apart, driving growth and boosting profitability.

Here is an example of the different types of customers in your business (the customer loyalty ladder):

1. Satisfied customers – stay with your organisation so long as expectations are met
2. Repeat customer – habitually returns to your company to buy again
3. Advocates – put their personal/professional reputation on the line to recommend your business to others
4. Evangelist – Actively convinces others to use your business
5. Owners – Feel responsible for the continued success of your business

Here are three practical steps to build customer loyalty and move customers up the customer loyalty ladder.

One: Understand Your Customers

To deliver exceptional customer service, it’s crucial to have a deep understanding of your customers. This involves gaining insights into their needs, preferences, and pain points. By understanding your customers, you can effectively tailor your products, services, and communications to meet their expectations.

Here are three things you can do to understand your customers better:

• Conduct thorough market research: Create short surveys or conduct interviews to learn more about your target audiences. Identify their demographics, behaviours, motivations, and challenges. This information will guide your customer service strategies.
• Create customer personas: Develop fictional profiles that represent your typical customers. Include details such as age, interests, goals, and challenges. Personas help you empathise with your customers and make informed decisions on how to serve them better.
• Actively Listen: Pay serious attention to your customer’s comments, suggestions, and complaints. This feedback is invaluable in understanding their experiences and identifying areas for improvement.

Understanding your customers is an ongoing process. A better understanding of your customers will reduce complaints and allow you to deliver experiences that exceed their expectations and foster long-term loyalty.

Two: Reward loyalty

Creating a customer loyalty scheme or discount structure can be a cost-effective way of retaining clients.

There are many ways to create a loyalty programme. For example, depending on your business, you may want to make data-driven, automated processes like the Tesco Clubcard or Nectar (Sainsbury’s, Argos, Esso, Ebay); establish a cash-back scheme like Asda Rewards; or implement a simple card and stamp system -buy six coffees and get the seventh free.

Creating a structured program that rewards customers for their repeat business not only encourages customer loyalty but also provides an added sense of value and appreciation.

Things to consider when creating a loyalty or discount scheme:

• Understand your cost per acquisition and ensure your discounts/reward cost is less than it would be to find a new customer.
• Consider FREE over a discount. Giving something away for free is sometimes better than discounting cash. For example, a free product has a perceived value of £X to the client, but it would have cost your business less.
• Keep things simple and ensure the program is easy to implement and for your customers to understand.
• Track and measure success to ensure the programme is working. Is it increasing sales and overall profits?

Three: Build a Customer-Centric Culture

Ultimately, customers want a positive, hassle-free service that exceeds their expectations. Keeping the customer at the centre of everything you do will help you meet this goal.

To achieve this, leadership must lead by example, and there are some simple things we can all do to foster a customer-centric culture. These include:

• Empower employees to take ownership of customer interactions and provide discounts and refunds at their discretion.
• Actively listen to feedback and take noticeable action.
• Resist bad-mouthing or negatively talking about a client/customer around the office or in public
• Reward staff that go above and beyond for customers, not just the business

How ETC can help

If you need help creating a customer loyalty programme, streamlining your business operations and improving your return on investment, please get in touch.

If you are new to ETC, why not contact us for a free new business review? We’ll spend two hours with you, giving you professional coaching and will leave you with actions for immediate implementation.