We believe that every business should invest in loyal customers, as they can have a direct and measurable impact on your brand.
If you are a business owner wondering why customer loyalty is important, how it can impact a business, or why you need to invest in serving your loyal customers, then you have come to the right place!
What is customer loyalty?
Customer loyalty within your business depends upon the spending power of consumers and on those consumers who repeatedly visit your business to make a purchase.
In a broader sense, loyalty is a business’ ability to remain at the forefront of consumers' minds, in order to secure a sense of allegiance from them. Many businesses vie for consumer attention through monetary tactics, by offering lower prices than competitors, or discounts on popular and specific products or services. This is a necessary strategy when trying to win share of the market, as customers regularly ‘shop around’ and compare brands and prices to decide on what to purchase. However, in current business there is a lot more to it than this!
Why is customer loyalty important?
It is important to promote customer loyalty for a variety of reasons to benefit your business, however, the main one is that satisfied and loyal customers can help you grow your business at a faster pace. In other words, customers who are loyal to your business will be better for your bottom line.
Did you know?
- 57% of consumers spend more on brands to which they are loyal.
- 50% of devoted customers are more likely to try new product releases as you expand and diversify your business.
- 31% of existing customers spending more than new leads.
Customers who are devoted to a brand can also become brand advocates. Customer advocacy can have a direct and measurable impact on the sales of products and services, by driving referral traffic through word of mouth marketing. Every business owner will know that building and sustaining a positive reputation amongst customers about a product or service, and by connecting with them through an online presence, is critical to any business’ future success.
These marketing techniques are cost-effective and help to generate new leads. Research shows that 92% of consumers trust recommendations from family and friends above all other forms of advertising, and online reviews can positively or negatively influence a consumer’s purchase intent, which is why customer loyalty is vital to promote your brand. (We have to shamelessly plug loyalBe here - our platform enables businesses to automatically prompt customers for feedback after they visit!).
Loyalty also inspires trust between customers and organisations, which provides the basis for a successful and long term relationship. Studies show that trust can increase customer commitment and weaken their tendency to shop with competitors, which strengthens loyalty.
Are you wondering how to drive brand loyalty, retain your customer base and increase profitability within your business? Check out our blog post on customer retention.