Customer Loyalty: How to Build and Maintain Relationships

I'm sure the term "customer loyalty" isn't new to anyone in business. However, truly understanding and nurturing it is more complicated than it seems. In order to build and maintain customer relationships, it takes more than just good service; it demands effort, ongoing engagement, and smart planning.

In this blog, we'll find out some practical tips and strategies to help you keep your customers coming back, turning them into loyal consumers that ensure your business's long-term success.

Understanding Customer Loyalty

Let's explore something essential for business success: Customer Loyalty. We're here to explain what loyalty really means and introduce you to six different kinds of loyal customers who help businesses thrive.

Defining Customer Loyalty

What is “Customer Loyalty” from the authors' perspective? 

1. It’s an ongoing commitment

Dr. Kotler and Keller (2016) – “Customer loyalty is a deeply held commitment to buy or support a product or service that you like in the future, though the influence of the situation & marketing efforts have the ability to cause customers to switch.”

“Customer Loyalty” from Business Leaders’ Perspectives?

2. Customer Loyalty is built through trust and respect

Daniel Javor, Founder & COO of Deep Blue Ventures  – “A relationship between a business and a customer that comes from trust and respect and the value each receives. If both receive maximum value, the relationship will last long term. For the business owner, this means they will maximize the customer’s lifetime value. For the customer, having a trusted product or service provider means security.”

Shannon Howard, customer marketing manager at Litmus – “It’s when your company and its products elicit positive emotions in your customers, prompting them to remain loyal to your brand. Beyond simply liking your product or being willing to purchase again, customer loyalty indicates likeliness to refer and willingness to stay with your product—even when other options are less expensive.”

Helen Baptist, COO of PathFactory – “The more relevant content your customers consume, the more likely they are to learn, share, and grow with your products. Knowing whether customers engage with your content and how that correlates with retention is critical to understanding and fostering authentic customer loyalty.”

So what is Customer Loyalty actually about?

Customer loyalty is an ongoing commitment to support a product or service. It’s built on trust and respect, ensuring the business and customer receive maximum value. Loyal consumers not only continue to  purchase from you but also become your best brand ambassadors, sharing positive experiences and sticking with you even when competitors offer cheaper options. 

For example,  Apple has a loyal consumer base that excitedly awaits each new product release and often recommends Apple products to others, showcasing true loyalty.

Types of Loyal Customers

People stay loyal for different reasons, but we can easily group them into six main categories:

• Satisfied Customers: These customers like your products or services, haven't complained, and are likely to buy from you often. However, they're easily swayed by competitors offering better deals, discounts, or new relationships.

• Price-Loyal Customers: These customers stick with you because of low prices. They'll leave if they find a better deal but will return if you offer the best price again. Keeping them is straightforward but costly.

• Loyalty Program Enthusiasts: These customers aren't attached to your company or products; they're loyal to your loyalty program, especially if it offers the best rewards.

• Convenience-Loyal Customers: These customers stay because your brand is easy to communicate with, find, and buy from. Price doesn't matter to them—convenience does.

• Freebie-Lovers: These customers are attracted by extras like free Wi-Fi, changing tables, or complimentary inspections. They buy from you occasionally and don’t significantly impact your revenue.

• Genuinely Loyal Customers: These are your advocates. They consistently buy from you and share their great experiences by referring friends and family to your company.

Other reasons could be named as Community and Exclusivity, Innovation and Adaptability, Personalization and Customization, Social Proof and Positive Reviews, Environmental and Social Responsibility, etc.

Why Should You Focus on Customer Loyalty?

Customer loyalty is crucial for many reasons, mainly because keeping a current client is much easier and cheaper than acquiring a new one. Why spend extra money to make a sale if you don’t have to?

According to Paul Farris, author of Marketing Metrics, repeat customers are 60-70% likely to make another purchase in the same brand. New customers are more challenging to convince since they need more experience with your business. You need to make them aware of your brand and use a comprehensive marketing strategy to guide them to purchase.

In contrast, customers who have already bought from you know your business and are more likely to purchase from you again. Having more repeat customers reduces the need to spend on conversion tactics like abandoned cart offers.

But there are a lot more positives, too. Loyal customers keep returning, spend more, and often tell their friends about your brand. 

What is Customer Retention?

Now that you have a better view of Customer Loyalty, we will move on to Customer Retention to find out how these two terms relate to each other.

Defining Customer Retention

Customer loyalty and retention go hand in hand. Loyalty is the mindset that makes customers want to engage with and buy from your company. Retention measures how well you keep customers engaged and how it translates into sales.

The goal is to keep the customers you've worked hard to get by providing great experiences and ongoing value. Retention strategies are designed to offer your existing customers more value while gaining more value from them.

Role of Customer Service in Retention

Customers choose to spend, engage, and interact with brands based on their experiences, especially when dealing with customer service. Whether through phone, email, chat, or in-person interactions, consumers tend to remain loyal if their concerns and issues are prioritized and appropriately addressed. On the other hand, a bad experience with your customer service can make them less likely to continue engaging with your brand.

For instance, consider Zappos, which is known for its exceptional customer service. Customers often share stories of how Zappos representatives go above and beyond to resolve issues, creating a customer base that returns repeatedly because they know they'll be cared for.

CRM in Enhancing Loyalty and Retention

Innovative brands focus on customer experience (CX) to boost customer retention. A Customer Relationship Management (CRM) system is critical for delivering a consistent, scalable, and unique customer experience. Great CX relies on understanding your customers, which is driven by data. A CRM collects and stores all customer data points in one place, enabling you to create more personalized customer experiences.

Customer loyalty is emotional, making it tricky to measure. However, combining Experience (X) and Operation (O) data metrics can help. Here are five easy ways to track customer loyalty:

• Net Promoter Score (NPS): NPS asks customers, "How likely are you to recommend us to family and friends?" A higher NPS means more loyal customers. It's a quick and straightforward way to measure satisfaction and predict loyalty.

• Brand Engagement: Check how often customers visit your website, leave reviews, or interact on social media. High engagement shows they like your brand and feel heard. It's a good sign of loyalty when combined with other measures.

• Repurchasing Levels: Compare the number of customers who come back to buy again versus the number of new customers. Tracking this over time shows how well you retain customers. More repeat customers mean higher loyalty.

• Multiple Product Purchases: Customers who buy different products from your range trust your brand more. It shows deep loyalty and satisfaction if they keep returning for various items.

• Customer Loyalty Index (CLI): CLI surveys ask about repeat and multiple purchases to measure future loyalty intentions. Comparing these intentions with actual behavior helps build a clear picture of customer loyalty.

8+ Proven Strategies for Building Customer Loyalty

Now that we've explored customer loyalty and retention, it's time to dive into actionable strategies to foster loyalty. Here are eight proven techniques to help you cultivate customer loyalty: 

• Make it Easy to Do Business with You.
• Provide Exceptional Customer Service
• Gather Feedback and Implement It
• Leverage Social Media
• Foster Relationships
• Prioritize Transparency and Communication
• Reward Loyalty
• Other Loyalty Strategies

1. Make it Easy to Do Business with You

Keeping customers is about more than just having a perfect product or service. It's about giving them a great experience that makes them choose your brand instead of any others in the competitive market. One way to do this is by making things simple and convenient.

When things are easy for customers, they're more likely to come back.

For example, you can make life easier for them by using an omnichannel support approach. This means being available to help them consistently and reliably across different channels and devices.

Customers can also get rapid answers to their questions by using self-service tools and chatbots rather than waiting for a live person.

2. Provide Exceptional Customer Service

Businesses known for keeping customers coming back are also great at providing top-notch customer service. Customers who have problems or need help want things to be easy.

Here's how to do it:

• Be proactive: Anticipate what your customers might need before they ask. This shows you're on their side and not just there to fix problems when they pop up.

• Hire friendly people: It's not just about fixing issues; it's about making customers feel good about dealing with you. Look for team members who can understand others' feelings, make friends easily, and stay calm under pressure.

• Connect personally: Take Starbucks, for example. They focus on more than just helping customers with their orders. They focus on more than just helping customers with their orders. The brand focuses on making personal connections and creating a sense of community. Customers want support that's not just about solving a problem; they want someone who cares about their experience.

Remember that it's more than just selling a product or service to your clients. If customers feel respected and valued when they deal with you, they will want to stick around. Did you know that 86% of consumers tend to pay extra for a better customer experience? So, it is obviously much better to listen to your customers and take their feedback seriously. When they feel heard and supported, they're more likely to stick around and say good things about you to others.

3. Gather Feedback and Implement It

Ask your customers for their thoughts to show you care and are always looking to improve things. Send them surveys, request email reviews, and take their feedback to heart—customers like feeling heard and valued by businesses they support. Don't just say you care about their happiness; show them by acting on their suggestions to improve their experience. Building their loyalty starts with being loyal to them first.

Greg Smith, Apptrepreneur of Trunkit, suggests:

1. Embrace all feedback, especially the tough ones.
2. Seek out honest opinions, stay resilient, and focus on improvement.
3. Don't let negativity deter you; listen, analyze, and take action.

Intelligent insights from others can enhance your product.

4. Leverage Social Media

Connecting with your consumers on social media has become essential in today's digital world. Many people may not even notice you if you're inactive on platforms like Facebook or Instagram. So, having a lively presence on various social media channels is crucial.

You can create an active online community by sharing behind-the-scenes stories about your company and products and engaging with your followers. Customers will feel more connected and be encouraged to keep coming back. 

Think about your favorite brands: Do their social media posts speak to you? Do they share things that maintain with what they stand for? And are they genuinely engaging with their followers? Chances are, they are.

5. Foster Relationships

Creating a strong connection with your customers starts with making them genuinely care about your brand. It's not only about giving away the rewards or working around with influencers; it's about touching the customers' hearts and minds.

Building strong customer relationships takes time and effort. Start by really listening to your customers and understanding what they value. Some people like lots of personal contact, while others prefer quick, efficient service. Be flexible and adjust your approach to meet their needs.

Show that you genuinely care about your customers. Connect with them on a personal level by chatting about shared interests, remembering important details, and acknowledging special occasions like birthdays. If remembering these details isn’t your strength, jot them down or use a CRM system to keep track.

Match your communication style to your customer's mood. If they’re in a rush, keep it brief. If they want to talk, take the time to listen and engage.

Make sure your brand consistently lives up to its promises. Your customer experience should reflect your brand's values, whether you're a large wholesaler or a small boutique. Deliver the service your customers expect and deserve.

Remember, strong relationships are built over time. Treat your employees well, as they'll mirror your behavior with customers. Maintain a consistent, friendly, and attentive approach to keep customers coming back.

6. Prioritize Transparency and Communication

Building and keeping customers' trust requires ongoing communication with transparency. Customers who see your business as open and honest feel good about their interactions. This is really important in customer service situations when an issue happens.

Good communication means keeping customers in the loop about what's happening with your business. Make sure it's clear whether it's a new product, significant changes, updates, shortages, revised hours, or anything else they should know. This proactive customer service is vital to keeping customers happy and wanting to stick with you.

7. Reward Loyalty

Once customers feel a strong bond with a brand, loyalty programs can help keep them returning. These programs, also known as rewards programs, aim to make customers stick with a brand instead of going to competitors.

In these programs, customers who have been customers for a while, like a year, get rewards like discounts or free stuff. This encourages them to buy more and stay loyal.

When creating a loyalty program, consider various types such as point collection, spending-based perks, or referral rewards. Tailor rewards to suit your customers' preferences, whether based on their shopping frequency, spending habits, or referrals. 

Additionally, gamification can enhance loyalty programs by introducing fun features like challenges, badges, or levels. This adds excitement and encourages active participation, ultimately strengthening customer loyalty to the brand. And if you're not sure about what do your customers want, just ask them.

For instance, Starbucks' "Star Dash" challenge encourages customers to earn extra rewards by making a certain number of purchases within a specific time frame, adding a playful twist to the loyalty program.

8. Other Loyalty Strategies

• Advocacy, education, and training events and communications
• Customer experience workflows
• Personalized communications and offerings
• Engagement activities
• Connected customer experiences
• Subscription offerings
• Exclusive access
• Redeemable rewards
• Discounts
• User-generated content
• Store design that personalize customer experience

*Tip: Remember, when you're setting up your store, think about how you can create a space that really connects with your customers. EComposer—Top Drag & Drop Shopify Page Builder can lend a hand by customizing your store design, making sure each visitor feels like the experience is just for them. 

EComposer is not only a useful tool to build your web pages, but also helps you in utilizing numerous integrated tools that streamline the process of boosting customer loyalty. With up to 25+ built-in add-ons and more than 50 third-party apps integrated, from email marketing and SEO tools to advanced analytics and customer support solutions, you'll have everything you need to create a seamless and engaging customer experience.

If you haven’t had a Shopify account yet, seize the opportunity to benefit from a special offer: only $1 for the first month for all plans to experience Shopify from A-Z.

Loyalty Marketing and Programs

To make it easier to increase customer loyalty, we need straightforward marketing approaches and programs. Let’s first begin with the definitions:

Defining Loyalty Marketing

Loyalty marketing is all about smart strategies aimed at keeping your current customers happy and coming back for more.

Having loyal customers is like having built-in fans for your brand. They love what you can give them and are more likely to keep buying from you again and again. Loyalty marketing:

• Helps boost customer lifetime value (CLV), how much your customers spend with you over time, how often they come back, and how long they stick with you.
• Makes it easier to personalize each of the customer's experiences.
• Attracts new customers while keeping the ones you already have.
• Rewards customers for recommending your brand to any others and for being strong supporters.
• Encourages customers to make the purchases you want them to, no matter where they're shopping.
• Gets customers involved in and engaged with what you have.
• Helps you easily gather more important information about your customers.

Explaining Loyalty Programs

A loyalty program is like a special invitation for customers to keep coming back to a particular brand. Customers get recognized and rewarded for their purchases or interactions, no matter where they happen.

These programs work like a promise: If you stick with us, we'll give you something extra in return. This could mean earning points, completing certain tasks, or spending a certain amount of money. In exchange, customers can enjoy a lot of vouchers, discounts, unique products, a lot of benefits and even special access to better deals or freebies.

Customer loyalty programs are an important aspect of keeping customers coming back and feeling valued. They're not only about how to get people to sign up; they're also about how to build a stronger relationship and to gather important customer information.

Essential Elements of Effective Loyalty Programs

When creating a customer loyalty program, aim for these features:

• Make it easy to grasp
• Keep the sign-up process simple
• Let members earn points fast
• Offer rewards that matter to them
• Encourage them to get involved
• Throw in some unexpected treats to make them smile

Engagement-Based Loyalty Programs

Today's customers want more than just rewards from loyalty programs—they crave real connections with their favorite brands. They expect personalized attention and appreciation at every interaction, not just during transactions. They value open communication, feedback opportunities, and feeling understood and valued by the brands they support.

To build and maintain these strong relationships, brands need to leverage data effectively. A strong CRM system simplifies the gathering and analysis of customer data, allowing for more personalized interactions and driving targeted outcomes.

Making engagement-focused loyalty programs crucial for building trust and loyalty. These programs aim to foster communities of advocates, boost referrals, and drive traffic to digital platforms.

Financial Impact of Customer Loyalty

Like mentioned before, loyalty matters greatly because, for most industries, it's expensive to gain new customers. It typically takes a year to a year and a half for businesses to start seeing returns on the marketing money they've spent to acquire these customers. Only with very large, complex, or customized products can companies start earning back what they've spent after just one sale.

According to Bain & Company, after buying once from an online clothing store, the average customer is likely to tell three other people about it. But if a customer makes ten purchases, they're likely to refer to seven others. That's why it's crucial to keep these newly acquired customers coming back. Repeat customers not only tend to buy more over time, but they also refer others more frequently than new customers do, boosting profits in the long run.

Furthermore, companies are adopting omnichannel loyalty and engagement strategies to grow their customer base, attract customers from competitors, and keep their most valued customers. Specifically, they're investing more in loyalty programs because:

• Loyal customers tend to spend more.
• Loyalty programs give companies an edge over competitors.
• Loyal customers engage more with the brand.
• Loyalty programs offer a way to exchange value with customers.
• Loyalty programs foster brand advocates.
• Loyalty programs help companies become more accessible across different channels.
• Loyalty programs enhance the in-store experience for customers.

Others also read

Unlock The Power of eCommerce Marketing Funnel To Get Sales

10 Proven Ways To Promote Your Shopify Store For Drive Sales

Skyrocket Sales with Video Marketing For eCommerce

Key Takeaways 

Building and maintaining customer loyalty is necessary for business success. Focus on creating emotional connections with customers through exceptional service, personalized experiences, and clear communication. Use loyalty programs to reward repeat purchases and encourage engagement. 

Leverage social media to foster relationships and gather valuable feedback. Ensure your store design is inviting and personalized, with tools like EComposer making customization easy even for non-techies. In the end, when you prioritize these strategies, you can retain customers, boost referrals, and drive long-term growth.

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