Three Ways to Boost Customer Loyalty

The ability to fall back on a loyal and dependable customer base has undoubtedly helped many businesses weather the economic storm, but how do you go about establishing and then maintaining the loyalty of your customers?

The legendary US business guru and public speaker, Jeffrey Gitomer said: "Customer satisfaction is worthless, customer loyalty is priceless" and "You don't earn loyalty in a day, you earn it day-by-day".

The first comment may be provocative and the second blindingly obvious, but it's surprising how many businesses have a confused view of their customers and how to keep them.

The notion that customer loyalty takes time to cultivate stresses the long-term investment needed to achieve it might be hard to accept, when a quick-fix solution to your business is might be more desirable, especially through an economic downturn.

Equally, a satisfied customer who never returns for repeat business is a form of false economy, since a business that fails to build up a base of loyal customers will have to work harder in the long-run to generate sales.

Many businesses take a reciprocal approach to customer loyalty: show your customers that you are loyal to them and they will in turn be loyal to you. Retailers such as Tesco and Sainsburys do this with loyalty schemes which reward customers with points or vouchers that can be redeemed on in-store products. However, such schemes are by no means a magic bullet to securing customer loyalty.

Anamaria Chiuzan, senior marketing manager at The Logic Group has three to businesses:

1. Keep it simple. Chiuzan says: "Rewards that are relevant to the individual rated highly amongst consumers in the survey -- 30 per cent said that this would encourage them to spend more with a business." See point number two.

2. Know who your friends are. Getting to know and understanding your regular customers and their needs is essential if businesses want to breed loyalty. Existing customers will not be taken for granted nor will they tolerate having their expectations ignored. In a way, it's a chicken and egg situation -- you have to have some loyal customers before you can find out how to make customers loyal. Be prepared to invest some time in getting that information.

3. Maintain service standards A loyalty scheme isn't worth much if your customer service stinks. If the customer service in your business isn't up to scratch it might be worth concentrating on that before you can start thinking about customer loyalty. According to Chiuzan, the survey found that good customer service is the number-one factor in encouraging spend, while poor customer service was the chief factor in discouraging consumers to spend more with an organisation.

(Photo markhillary, CC2.0)