What is the essence of becoming a loyalty-oriented business?
Consumers would pick the best offers and deals in a competitive market, that’s given. Therefore, businesses must exercise all efforts to ensure each vital component is consolidated for a cutting-edge loyalty program.
Alignment: From The Top Management and Across Teams
To have a successful loyalty program, aim to become loyalty-oriented all the way. Top-level management plays a crucial role. There should be an understanding of the significance of wider goals and a concrete plan on how to achieve them. The key is having one goal and employing appropriate metrics in evaluating the customer loyalty program’s success.
Running a business isn’t concentrated on a single aspect. All related departments must be involved and collaborate in the process.
The key to this approach of loyalty-first is adapting a shift in organizational culture. It is being on the same page from goals, teams, individuals, data, and behavior. Sales figure aside; emotional loyalty matters the most. Think about how to strengthen some factors with it, such as brand messaging, marketing materials, sales practices, your product, as well as customer interaction.
Understanding Emotional Loyalty and Behavioral Loyalty
Emotional loyalty and behavioral loyalty are the prime types of customer loyalty. Both carry various elements one must understand and address to gain loyal customers. How do they differ?
Emotional loyalty seeks out a more profound reasoning on customers’ behavior. It could be a form of emotional attachment or connection to the product, mission, or simply trust the brand.
On the other hand, the emotional aspect is lacking in behavioral loyalty. In this case, loyalty is merely a result of circumstance or accessibility. Here, customers are likely to change their mind about a certain product or brand over another; they can access even more conveniently and cheaply.
These various factors help in profiling the customer loyalty base. Out of them, a business can establish and distinguish different customer personas.
Seamless Changes to Achieve Results
A company-wide approach is necessary to run a successful customer loyalty program. However, a visit to Glueloyalty.com will help you better understand back end support and solution for all your loyalty campaigns’ needs. If you want to find out more about the right approach to customer loyalty, rewarding your loyal customers, and leading ahead of the competition.
Why Build Customer Loyalty?
Your business significantly benefits from a lasting relationship among your clients. In a market where consumer volatility and competition are high, you need a solid approach to consolidating your customer base and further developing your enterprise. Loyalty stratagems overcome challenges to a better knowledge of your customers.
The following are reasons to attempt to achieve customer retention at all times fully.
It is more cost-efficient to retain a loyal customer than to acquire a new one.
Unfortunately, many marketers fail to see this, and therefore, consequently and continually ignoring and overlooking the matter. Too often, the focus is to acquire more, never realizing that existing customers are already very valuable.
While it costs any attempt to retain customers, such as loyalty programs through a loyalty card and redeemable points, there are varied financial advantages. No one can deny that these costs are investments in the long run. In the end, your cost is lower in your attempt to acquire new customers. Don’t expect high ROI anytime soon in prospecting activities. The fact is the feat of winning new customers often harms the economy as a result of price wars among competitors.
Compared to others, loyal customers are willing to spend more
Based on CSC Peat Marwick’s brand loyalty study, about 93% of major retailers expressed that loyalty brings about a competitive edge for them. The lessons are still highly relevant, even though many years have passed since the said consulting firm conducted the study.
It should be noted that loyal customers take account for 20% of the stores’ total customer base on average. But the same customers represent the stores’ total sales of up to 80%. Recent studies also suggest the same, just like Bain & Cie. Their study shows that a 5% best customer retention increase is equivalent to 25%-55% economic increase results.
What do these numbers reveal? It’s a strong indication that loyal customers purchase more and frequently than the rest. They buy repeatedly compared to non-loyal customers. Therefore, an increased loyalty rate is critical, economy-wise. Any expense incurred to boost loyalty is profitable. There is a significant impact to the companies’ turnover as well as profitability.
Lesser Volatility with Loyal Customers
Any company can say the increase in consumer volatility over the years due to various factors. The best way to limit, if not eradicate, is to focus on customers and their loyalty. Emotional connection means reduced customer volatility. Reward customers. Fred Reichheld, a famous business strategist, speaks of the loyalty effect. Similarly, losing loyal customers would also cost the company just as significantly.
Several telephone companies learned the hard way and suffered from massive customer loyalty decline when Free joined the industry, including Bouygues, SFR, and Orange Telecom.
Loyal Customers are your Company’s Best Ambassadors
Satisfied and loyal customers are likely to recommend your brand, becoming your company’s ambassadors, be in social media, or word of mouth. This makes your customer loyalty efforts truly worth it. It works both ways: limited cost in retention and acquisition.
Loyal customers Help in Improving your Offers
Emotional connection and bonds are created when customers enjoy your offers. You can launch a crowdsourcing campaign or create an online questionnaire to improve one’s catalogue and service. Customers want to be involved and would feel appreciated when asked about their opinion.
Loyal customers positively impact the company’s workforce with satisfied customers, resulting to a healthier working climate and more productivity. Ultimately, loyal customers cut support costs since they likely need lesser help than new customers who are still figuring out ways to get used to the company’s offers or services.
The recent years have shown an exponential booming in the business world. However, not all businesses perform as effectively and well as the others. On top of that, one can tell the disparity between those businesses giving importance to customer loyalty as opposed to those that take it for granted. Ask Glue Loyalty. They’re the expert on the matter.