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Guide

An introduction to better serving your most loyal customers

Creating a solid base of loyal customers is one of the easiest ways to increase sales and grow your business. However, with so much choice in the market, it’s crucial not to assume that customer loyalty is a given.

Loyal customers can act as brand ambassadors and provide valuable feedback that improves your product or service. They’re also good for your bottom line: you’ll save money on customer acquisition and loyal customers are 23 per cent more likely to spend with you.

However, with so much choice in the market, it’s crucial not to assume that customer loyalty is a given.

Businesses need to be proactive about making sure customer expectations are being met every time. Even a single instance of poor service can be enough to make 33 per cent of customers consider going elsewhere.

This guide will outline some of the main factors that affect customer loyalty, common mistakes businesses make and quick wins that can improve your customer relationships. The next step will be to use our action plan to direct your change and improvement.

What factors influence customer loyalty?

Customer expectations are higher

We live in a world where people can watch on-demand TV, order their groceries online and get their favourite meal hand-delivered to their door in under an hour. As a result, customer expectations are high these days.

Customers expect their experiences to be seamless. That applies to everything from how easy it is to shop with you to how responsive your customer service team is. If your service is slow or inconvenient, you may end up losing them.

It’s easy to find alternative options

The rise in online shopping means that it’s never been easier to see what else is out there. Alternative products, pricing, shipping options and reviews are only one or two clicks away for customers.

Loyal customers might have stuck with you so far because you were the first business they tried, but it’s important not to get complacent. You need to fight to keep them, or they may end up looking elsewhere.

Different factors influence buying decisions

Price and speed have always been a key driver behind buying decisions, but there are a number of other factors that have become increasingly influential.

For example, younger generations are typically more socially conscious and want greater transparency from the businesses they buy from. They want to know where products are sourced, how they’re manufactured and whether staff are paid fair wages.

If you want to better serve your loyal customers, you need to keep these trends on your radar and find out what your own customers’ expectations are.

Sanjay Aggarwal, Spice Kitchen

Sanjay Aggarwal (right) focuses on brand loyalty and repeat sales at Spice Kitchen

“We make the buying process simple and effortless, and allow customers to easily review our products. It’s all about brand loyalty and repeat sales. It’s incredibly important to put our customers first and design the business to give them the best experience possible.”

Sanjay Aggarwal, founder of Spice Kitchen

The cold hard facts

Only 13 per cent of customers describe themselves as loyal to a brand – which means 87 per cent are shopping around.

Common mistakes when serving loyal customers

Failing to look at customer data

One of the biggest mistakes is failing to look at customer data. If you aren’t tracking who’s buying from you and when, it’s hard to identify who your loyal customers are.

Remember, loyal customers aren’t necessarily the ones who spend big with you every year. They might make small purchases, but those purchases add up to an impressive lifetime value. Analysing customer data will make sure they don’t slip through the cracks.

Not speaking to customers

Want to find out how you could better serve loyal customers? Learn from customers, rather than making an assumption yourself.

A surprisingly common mistake is failing to speak to customers when deciding how your service could be improved. Following industry best practices and advice from your network can improve your service to a point, but there’s no better way to implement the right changes than by speaking to customers directly.

Not benchmarking your business against competitors

If you don’t have a good grasp of the current industry standards for customer service and experiences, you might feel confident that you’re offering enough. It’s also easy to fall into the habit of assuming that loyal customers are perfectly happy with your current efforts.

It’s vital to stay on top of what other businesses are doing. If everyone else is improving around you and you’re sticking to the same processes, you risk falling behind the pack. It will make it harder for loyal customers to stay with you if they can get better and faster services elsewhere.

Anita Pace, Pace Communications

For Anita Pace, great customer service is key to building customer loyalty

“Great customer service can help businesses build loyalty and trust with the individual who is on the receiving end of a member of staff who goes the extra mile. When that customer service is captured, in the digital space, there is an opportunity to share something brilliant far more widely and get some valuable PR on the back of it.”

Anita Pace, managing director of Pace Communications

The cold hard facts

Being able to secure referrals from happy customers is more important than ever.

Research shows that 81 per cent trust their friends and family’s advice over advice from a business. Trust in other forms of marketing is significantly lower: 65 per cent of people don’t trust press releases and 71 per cent don’t trust sponsored ads on social networks.

Quick wins for better serving your loyal customers

Find out what matters to customers – and listen

Finding out what loyal customers want from your business is the best way to make sure you’re giving them the service they need. Not only do you increase the chances of keeping them as a customer, but you’ll get valuable feedback from people who have a lot of experience with your buying process.

This can be done through a customer feedback survey or arrange a time to speak in person. Once you’ve got feedback from your customers, look at the steps you can take to implement it.

While it might not be possible to act on all the feedback straight away, there could be some small areas that are easy to improve.

Look at how other companies engage customers

Understanding what other businesses are doing will help to set a benchmark for your own customer service.

Look at how businesses in your sector interact with customers. Social media conversations are easy to find and view, but it’s useful to look at website testimonials and review sites too. What do customers like about shopping there? What keeps them going back?

This information will guide your efforts to improve loyalty, but it can also provide a wider understanding of your competitors’ strengths and weaknesses.

Remind customers they’re appreciated

Customers can choose to spend their money anywhere, but they’ve chosen you. That’s important, particularly if they’ve made that choice over and over again.

There are plenty of ways to show customers they’re appreciated. You could offer a discount based on loyalty, send a “thank you” gift each year or use your social media channels to help promote a charity that’s important to them.

Even something as simple as picking up the phone to check their latest purchase was up to scratch can make all the difference.

Rick Smith, Forbes Burton

Going the extra mile for customers boosts referrals for Rick Smith at Forbes Burton

“We put a hand around our customers’ shoulders, make sure they’re happy and that any concerns have been addressed. This means that when they’re down the pub talking to friends who are in a similar position, they will say ‘talk to Forbes Burton, because they looked after us’.”

Rick Smith, managing director of Forbes Burton

The cold hard facts

Research shows that customers expect personalisation when they’re buying from you. Around 59 per cent of customers said tailored engagement based on past interactions is very important to winning their business.

Now you’ve learnt about the underlying factors that affect how you serve loyal customers, use our action plan to direct your improvement efforts.