How to Create Customer Loyalty

Author: Stephanie Taylor Christensen | August 13, 2016

Convincing customers to consistently purchase your product or service is the real key to establishing the customer base that empowers you to survive business downturns and plan for growth. Here are some simple ways a small business in any industry can create customer loyalty.

  1. Design offers that facilitate repeat purchases

    Your customers may have been completely satisfied with their first or second purchase, but it’s up to you to give them a reason to keep buying. At least once a month, review sales history at the customer level, taking variables like seasonality, price, promotions, and competitor activity into account. Experiment with targeted marketing offers based on the customer’s purchase behavior to closely replicate the factors that first brought them to your business. Review service policies—including business hours, inventory levels, and “concierge-style” services like free shipping and delivery or private shopping events—regularly to confirm that they’re competitive with other options the customer has, and are conducive to his or her wants.

    Steve Silberberg, owner of Fitpacking Weight Loss Backpacking Adventures, has found success rewarding past customers with an offer ranging in value from $100 to $700 off a future trip—even when it means being less aggressive with his acquisition strategy. “We believe in rewarding our good customers, not giving huge incentives to strangers. Over 40% of our participants are returning participants, so we think that speaks highly of our loyalty program.”

  2. Think beyond the sale

    Shift your marketing focus from one based on driving sales to one focused on providing enhanced value. Todd Damon, president of Wood Werks Supply, Inc., says his family-owned business has flourished for the past 25 years in a retail and e-commerce environments thanks to its focus on customer education. He explains that though because his woodworking business has a history of inviting customers to its showroom to learn and experiment with hundreds of power tools, that model proved invaluable when the business expanded to an online venue. “The project section on our website where woodworkers can share their stories has been instrumental since we opened an e-commerce store. We’ve learned that by teaching your customers, they become more loyal to your brand,” says Damon.

  3. Build customer loyalty by being available

    In a time where virtual assistants, online calendar scheduling, and email communications rule, giving your customers direct access to a live a person is a point of differentiation—even if you’re a one-man shop. Services like Google Voice can transform your personal cell phone number into a distinct business phone line. Callers will be “forwarded” to your cell phone (unbeknownst to them). You can then choose which calls to accept or send to voicemail. Brian Bleifeld, partner at Bleifeld CPA, says his firm stumbled into a unique way to cultivate loyalty through a similar personal touch. “We’re near the airport, and 50% of our clients are international. We offer the service of picking them up after a flight, making stops at the bank and law offices, and bringing them back to the airport. It happened by accident the first two times but then became a service. It has helped build loyalty and referrals,” says Bleifeld.

  4. Design customer loyalty programs that reward the right behaviors

    There are now more than three million loyalty programs in the United States, according to data compiled by customer loyalty provider COLLOQUY). But the mere presence of a program doesn’t mean you have a loyal fan base. (In fact, the same data indicates that though the average person belongs to about 30 loyalty programs, he actively participates in less than a quarter of them). An effective loyalty program is designed with the customer in mind. Consider the tools customers use to communicate and pay, the things they buy regularly (and would appreciate receiving for free or at a discount), along with your average order size, and purchase frequency.

    If customers don’t tend to bring their entire wallet to your business, for example, don’t require them to present a physical card to earn rewards. If your average order value tends to be small, don’t set the threshold to earn a reward so high that most customers won’t reach it. When they do earn rewards, give the customer to option to apply a discount, receive cash back, or a credit to their account, all at the point of sale.

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