By Raviteja Dodda
Listed here are four simple reasons why high customer loyalty is a highly reliable path to take for brand success: It triggers repeated buying, repeated interactions, higher spends on the brand and very important, make customers influential brand advocates. That’s certainly powerful brand building.
Now that we know brands can use loyalty to enhance their brand value, let’s see how can use loyalty as a springboard to rise in the market with startling numbers. Research says that
- The probability of an existing customer buying a product is 60-70%, while the probability of a new customer buying is only 5% to 20%.
- It costs up to 5 times more to acquire a new customer than to retain an old one.
- Existing customers contribute more than 65% to a company’s business and spend 31% more than new customers.
- Current customers are 50% more likely to try new products
In short, loyal customers can help brands grow faster than even the company’s marketing teams.
Building customer loyalty
Loyalty is a customer shopping behavior that is an outcome of customer satisfaction and often times impacts buying decisions more than pricing or availability. A loyal customer is willing to wait for a restock or pay a higher price for it. Companies are using customer loyalty analytics to tap into behavior to gain higher customer retention and repeat purchases and build brand trust.
They use data to gain key insights into user behavior to analyze how loyal customers are towards brands. Information from multiple data points from different sources help brands connect to customers in a way that they remain steadfast brand loyalists.
Steps to building loyalty starts with knowing customers, moves to giving them consistent brand experiences and personalizing shopping journeys.
Know your customers well:
This involves treating each customer as an individual and not as part of a mass audience. The key is to understand what inspires each customer to shop for a specific brand. It should answer questions like how does the brand make them feel and how is it communicating to the customer and how are they communicating it to others.
It’s important that brands anticipate customer needs, solve their issues and make the experience deserving of a referral.
Give a consistent brand experience:
Consistency makes a brand reliable so that it soon becomes part of a customer’s lifestyle. It is one of the factors driving customer loyalty. It helps customers form emotional attachments with the brand and the brand form a firm association with customers. The result is a ‘happy’ customer experience giving the brand an edge over competitors to retain loyal customers. But it’s the consistency in making customers happy is what wins long-term loyalty.
Personalized customer journeys:
Personalization is the big wave that is carrying customer loyalty forward. Technology enables a one-to-one relationship between brands and consumers. This is becoming increasingly relevant as consumer data provided by them is reliable and when armed with it, brands understand the consumer better and provide relevant information to them. This also builds trust and increases loyalty.
Tools to build customer loyalty
Brands are using AI-based tools like customer engagement platforms (CEPs) to drive brand loyalty and increase customer engagement with relevant, personal, and contextual messages. They enable brands to direct messages to the right audiences over the right channels such as email, SMS, chat or push notifications. CEPs come equipped with intelligent segmentation and personalization capabilities that help brands understand each customer’s unique requirements and tailor communication accordingly. CEPs have a native machine-learning aspect that help brands analyze, gain insights, predict, and engage with customers the way they want to be spoken to over a channel they enjoy interacting with.
They are capable of segmenting customers and performing a smart cohort analysis and conversion funnels to profile data. CEPs can also help build actionable user groups and perfect audience targeting to create powerful user experiences.
In addition to this, CEPs help improve customer engagement which can have a positive effect on an enterprise: from increasing retention and referrals to developing brand awareness and reach, as well as growing sales, revenues, and the ROI and impact of marketing efforts. The bottom line is engaged customers that are empowered and loyal. All such efforts directed towards maximizing customer’s satisfaction and retaining them will help businesses thrive in the long run.
The author is CEO & Co-Founder, MoEngage.