It’s surprising how many retailers take loyal customers for granted. Rather than doing a few extra things to stay connected with these shoppers, owners often assume making one sale ends the transactional relationship. Operating a thriving business requires identifying the customers who are essential to its long-term growth. Loyal customers are the people who frequently drop by to purchase your products and services. These patrons speak highly about your knowledgeable staff to family and friends—yet, are eager to give them another chance when things don’t go according to plan. However, retailers may be disinterested in cultivating these profitable relationships because they fail to see the benefits of investing time and money to get a loyalty program up and going.
Loyal Customers Spend More
Every business should think of itself as a brand that depends on the goodwill of customers to be profitable and successful. Frequent shoppers are familiar with the company and are already aware of the quality of the product and services. In comparison, acquiring a new customer takes more time and effort. Numerous surveys have shown that it is more cost-effective to retain existing customers. Loyal customers are a reliable source of revenue. According to business.com, returning customers spend 67 percent more than new customers.
- 65 percent of a company’s revenue comes from existing customers
- Retaining an additional 5 percent of customers increases profits by 25 percent to 95 percent
- Repeat customers spent 67 percent more shopping in months 31-36 than in months 0 to 6
- Bringing in new customers costs 5 to 25 times more than selling to a current one
Customers Spread the Word
When customers say good things about your business, their family and friends listen. HubSpot Research indicates that 81 percent of customers trust the recommendations of the people they know. Getting referrals is one of the best ways to increase your customer base. On the other hand, acquiring new customers through other methods may require increasing the advertising budget, time, staff, and resources. However, reaching out to loyal customers can save on marketing costs since It’s much easier to persuade someone who currently shops a business to try a new product.
Reward Customers Who Commit
No doubt, loyal customers are an asset. Businesses can show appreciation by sending them special offers, sales, discounts, and thank you notes. The promotions should reflect the person’s purchasing habits and be relevant to their lifestyle. It strengthens the relationship when retailers are committed to making their customers happy. Free promotions are also effective and minimize costs. Personalized e-mails generate 6x higher engagement rates than non-personalized messages.
Encourage Two-way Communications
Customers who regularly share feedback about products and services on social media are valuable to a company’s communications network. Testimonials and product reviews help potential buyers make informed purchasing decisions. Encourage loyal customers to post photos of their latest DIY project and share fun stories on your website. Owners can promote more long-term interactions by offering incentives or giving away products.
Understand Your Customers
It takes time to build an army of loyal customers. They need to be understood on a personal level. Customers want retailers to listen and respond when they give honest feedback. There is a correlation between gaining the trust of loyal customers and boosting sales. Yet, there’s more to do.
- Provide exceptional customer service
- Establish a loyalty program to show customers they matter
- Stay connected to your online community
- Target your messages to reach the right customers
Making an effort to hold on to the customers you already have is a wise business decision. Offering small incentives is a powerful tool to entice past shoppers to return. A significant portion of an operation’s profits is generated from loyal customers. There are many ways to build a program, but the benefits should be clear to the customer and require a few stipulations to participate. Loyalty programs that are simple to join keep shoppers coming back for more perks.