03.16.20164 min read

Why Customer Loyalty Equals Long-term Success for Your Business

by Jill Gengler

Every small business owner thinks about how best to build customer loyalty. They may not specifically think, “What are my long-term plans for building customer loyalty?” But, every business owner intrinsically plans their moves with customer loyalty in mind. Period. Without customer loyalty even the most brilliant product or service will struggle to survive for the long term.

In Jeffery Gitomer’s book, “Little Red Book of Selling”, originally published in 2004, he stated The best way to find new business is to talk to old business.” This is as true today as it was a decade and a half ago… and honestly for centuries before that."

Your current and past customers have already bought and bought into the products and services you are selling.  Consider the cost of capturing a brand new lead or prospect, the time it takes to nurture the prospect, gain their trust and convert them to a customer. Now consider that new happy customer—placing them in automated upsell or repurchase campaigns will convert to a sale in a fraction of the time and at a more consistent rate than any new lead capture campaign.

If you want to grow revenue, adding more names to your client list is an obvious solution. But unless you also focus on nurturing and offering more to your existing customers, you could actually lose money even as you add customers. Gaining a new customer probably won’t make up for losing one, considering the extra time and money you spent convincing the new person to buy.

Think about yourself, your family—what drives your loyalty as a repeat customer? Here’s what consumers told ClickFox, a provider of customer experience analytics, in a survey about what drives brand loyalty.

What makes you loyal to a brand?

  • Quality: 88 percent
  • Customer service: 72 percent
  • Price: 50 percent

Quality? That’s all on you and what you provide as products and services for your prospects and customers. But remember, the value of reaching out to customers for feedback and ratings to improve your quality—that is part of good customer service.

As a small business owner, you must consciously plan to build new business by talking to old business through ongoing customer service. Nearly all businesses want long-term relationships with their customers—and so they should.

At a minimum:

  • New customers should be welcomed, so they know their choice to go with your business is appreciated and what you recommend as best practices in utilizing the new product or the service they’ve purchased from you.
  • New customers should be advised of other products and services you offer that would be of benefit, so they can take advantage of the ability to add more value to their initial purchase.  This communication can be easily automated in customer nurture campaigns to maintain consistency in your messaging and offerings.     
  • Repeat customers are loyal customers—individuals in this group should be given the opportunity to provide your business with referrals.
  • Referrals should be treated like gold. Contact them; tell them who referred you and what you do. Offer them something of value in exchange for their email address and follow up. Do not assume that warm referrals are ready to buy—they need nurturing too. However, because they were referred to you, their conversion rate can be significantly reduced from leads you capture traditionally. 

In summary, it is important to note that most customers aren’t automatically loyal to a business after their first purchase. Loyalty has to be earned, and a great product or service is only part of the equation. It takes effort to make customers happy—and to make sure they stay that way. This is an integral part of efficient customer service. 

There’s no one answer as to what makes customers loyal, but much comes down to customer service and communication.

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Jill Gengler has been helping small business succeed for more than three decades; most recently as a Small Business Success Coach with Infusionsoft for the past two and a half years. As a former manager, director, executive director and vice president of sales and marketing, her extensive experience across a wide variety of industries allows Jill to bring implementable concepts to her customers to consistently save time and earn more.

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