Five Business Keys to Maintaining Customer Loyalty
It’s no secret that it takes more time and effort to acquire a new customer than it does to retain a satisfied one. In fact, customer acquisition may cost six or seven times more than customer retention, according to Fred Reichheld. Reichheld is Director Emeritus and Fellow at Bain & Company’s loyalty practice, and the author of several best-selling books about customer retention including Loyalty Rules & The Ultimate Question.
These books are among a number of volumes published with reasons your business customers or clients will keep returning for your goods or services. While there are many nuances to building customer loyalty, the massive amount of information about the topic can be distilled into five practical, common sense business principles.
The five principles for building customer loyalty are:
1. Listen to their feedback
To keep your customers happy, you must understand their needs and wants. Specific customer needs will vary depending upon whether you are in a retail, service or an industrial products business. However, the core principle remains the same. By taking the time to truly assess your customer’s desires and provide them with the things they need or want, you are showing that you care. Caring builds trust and rapport.
Furthermore, implementing changes or improvements from customer feedback gives them a reason to return to your business. Asking customers how you are doing and what you can do to improve is an effective way to get feedback that works for any business. Clients can also communicate what is being said about your business through social media networks and various review sites.
2. Connect with your customer
The first principle, listening, is an important element of building and maintaining relationships with your customers. All great relationships involve effective and consistent communication. Besides building a relationship by listening, you need to take proactive steps to frequently connect. There are many ways to do this. Suppliers can offer their metalcasting customers purchasing incentives or volume discounts on consumable products. All companies can inform clients about product upgrades or inventory reordering specials.
This can be done through newsletters, blogs, your website or interactions with the sales team or other personnel who come in contact with customers. No communication or poor communication after the first sale leads reduces the opportunities for future sales. Always look for ways to build upon your current customer relationships and remember to implement systems to maintain them.
3. Simplify your customer’s business life
Communication is an important tool in building customer loyalty. But all the communication in the world won’t have an impact if your product or service doesn’t provide a solution for your customer. You must provide convenience for your customer and make their life or work easier. For a supplier, that may mean offering additional services or making the buying experience more enjoyable. That will help differentiate you from those offering similar products. Industrial companies might tailor ordering systems or delivery schedules to the customer’s needs. All procedures and processes should be designed to deliver ease and effectively accommodate the customer.
4. Make the customer say “WOW!”
Connecting with customers and providing solutions goes a long way to building loyalty. But you can really lock them in by adding value and finding ways to make your customers say, “WOW!” Retailers might open early or stay late to accommodate a customer’s schedule. Other organizations often get a “WOW” for meeting a tight deadline or suggesting a solution that the customer didn’t know was available. The customers that you WOW will not only return, but they will also refer your business to others.
5. Efficiently resolve issues that may arise
Inevitably, even though you’ve followed the first four steps, you’ll run into the occasional customer issue. Quickly handling a customer problem and providing a solution will keep most customers happy. The key to handling problems is to not get defensive and to act irrationally. Do not let a small issue turn into an even bigger problem. Customers that are satisfied will typically return. However, research has shown that unsatisfied customers not only won’t do business with you again, but they will share their “bad experience” with a greater number of people.
Building customer loyalty is not a simple process, but it’s well worth the effort. Loyal customers purchase regularly, are not swayed by competitor’s blatant overtures and refer more people to do business with you.