How To Gain Customer Loyalty: Everything You Need To Know
When it comes to growing a business, there are a seemingly endless number of recommendations. Some say, “Focus on customer service” while others say “Inbound leads are most important” or “Work on generating more referrals.” However, underlying all of these suggestions is the same objective: building a customer base that is satisfied, loyal, and eager to share their positive experience with other potential customers. Here, we’ll focus on the second of these goals to answer the age-old question of how to gain customer loyalty. Before we begin, it’s important to note that customer loyalty isn’t simply a goal that appears post-sale. Learning how to gain customer loyalty is a never-ending process of iteration, based on feedback from customers and insights from your sales metrics. Consequently, when you’ve made it through this blog, the next step is looking at your existing sales and service processes with a critical eye. That way, you can ask yourself, “How am I encouraging customer loyalty throughout my customers’ experience, and how can I do better?” At the end, I’ll share a few resources to help you tackle this question with confidence. For now, let’s jump into the four steps I mentioned, so you can get started! 🎉 Treat existing customers as well as new customers. First and foremost, learning how to gain customer loyalty starts with how you treat your customers. For many companies, the impulse is to treat new or potential new customers exceptionally well so they are encouraged to make a purchase. But, while this can initially bring in new business, it can also make existing customers feel ignored or unappreciated. For example, in B2B sales, many advertising agencies devote a ton of energy to pitching potential clients. Then, once the deal is done, the client’s account is handed off to someone else entirely. This gives the new client the impression that they’re no longer worth the initial sales rep’s time, and it slows down their project. Likewise, in B2C sales, many cable or cell phone companies hook consumers with an amazing sign-on offer or “new client” discount. Then, after the original offer expires, the true cost of the service is much higher and the customer is left feeling unappreciated or misled. These examples don’t mean that all advertisers or all cable companies treat new customers misleadingly well. However, they offer two important lessons. First, consider retiring any onboarding offers. If your product or service is good enough, you should be able to compete for — and win! — new customers based on the quality alone. Spend your time building and delivering a great product, and you won’t need gimmicks or short-term offers to attract new customers. Second, treat existing customers as well as new customers. It’s anywhere from 5 to 25 times more expensive to acquire a new customer than it is to keep a current one, so treating existing customers well not only means more revenue from their future purchases. It also means money saved, as you don’t have to spend anything on onboarding new clients. Treat customers the way they want to be treated. Speaking of treating customers well, the second step in how to gain customer loyalty is following the Platinum Rule. Coined by Tony Alessandra and Michael J. O’Connor in their 1998 book, this rule dictates that rather than follow the Golden Rule – Treat others the way you want to be treated – the best businesses treat customers the way they want to be treated. One past example of this is the clothing retailer ModCloth. In late 2015, after years of customer feedback, ModCloth founder Susan Gregg Koger announced they were desegregating their clothing sizes (i.e. listing items based on attributes other than size, such as style or color). When asked about this decision, Koger replied: “I think there is still an outdated notion in the [fashion] industry that ‘plus’ should be separate because it’s less aspirational, or because that consumer is less fashion-forward, or less willing to spend on herself. But what we’re hearing and seeing from our community is that it is simply not true.” Koger went on to explain that the common practice of excluding plus size clothing options was exactly the way customers didn’t want to be treated. In fact, considering the average American female – ModCloth’s largest audience – is a size 16-18, it wasn’t just insulting to tons of potential and existing customers. It also created a poor shopping experience for the average customer, as finding appropriately sized clothing took multiple clicks. In the same way, treating your customers the way they want to be treated demonstrates that you (a) want them to stick around and (b) will work for their support. You don’t just expect them to buy from you. You want to hear from them and, in doing so, provide more value every time they come in contact with your brand. Track customer loyalty (extensively and consistently). The third step in how to gain customer loyalty is a simple one: track it extensively and consistently. Like a basic science experiment, implementing changes in your business comes in three phases. First is evaluating what you have to see where you can make changes. Second is enacting those changes, and third is recording the results. However, like a science experiment, adjusting your business processes successfully also requires analysis. That’s where customer loyalty data comes in. Generally speaking, you can track customer loyalty through qualitative and quantitative systems. The former, qualitative tracking, is loosely defined and focuses on asking customers about their experience. This can be as simple as a phone conversation and is especially useful when you’re looking for details about a customer’s experience or a longer explanation of their thoughts around your brand. On the other hand, quantitative data is much more numerical and focuses on rating customers’ experiences. Think surveys or pop-ups that ask “How would you rate your shopping experience?” or “How likely are you to recommend this brand to someone else?” Here, the goal is to collect numerical answers to
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