Benefits of Building Customer Loyalty
Many businesses offer rewards programs, mailing lists, or special discounts to convince their customers to return. Why do they focus so much on these ploys? They’re all strategies aimed at trying to increase customer loyalty, one of the best ways to boost your brand. Here’s why building customer loyalty is important, and what it can do for your business.
User generated content
One of the biggest benefits of customer loyalty is the amount of user generated content it creates. User generated content includes reviews, testimonials, pictures, and more— anything created by customers who purchased from your business and then shared their thoughts or experiences. User generated content is great because it’s organic, honest, and free. It can be used to advertise your product both on your website and other places online. With as many as 84% of people saying they trust an online recommendation as much as one given in person, user generated content can have a lot of power! Customers with strong loyalty to your brand are likely not only to return again and again, but also to tell others about your brand and create conversions for you. Building customer loyalty almost guarantees that you’ll have an influx of reviews and testimonials as consumers share their favorite brand online.
More likely to try new products
Repeat customers spend 31% more than new clients and are also more likely to try a new product or service you offer! When a repeat customer has had several positive interactions with a business, they begin to trust and develop a sense of loyalty towards that brand. Because they know what to expect when they order from you, repeat customers feel comfortable trying new things and spending more than a first-time customer, who may shop more conservatively. Because they are familiar with the branded experience you offer, repeat customers may also look to engage with your business in new or interesting ways, becoming more likely to take a risk on a just-released product or service. If you are looking to expand your brand’s offerings, customer loyalty is a must-have to help support both your mainstays and your new products!
Conversions and competition
Another reason building customer loyalty is so important is because encouraging customers to return is much less expensive than creating new customer conversions for your business. With all the work that goes into advertising to try to create new customers, particularly in markets with a lot of competition, the cost per conversion can become very high. And with a low conversion rate, despite the time, effort, and money you invest, you still may not receive much business. However, a satisfied client may return to your product or brand without additional advertising, making it much less expensive to keep your old customers than to find new ones. Particularly for products that need to be periodically replaced—think anything that gets used or has an expiration date—customer loyalty means repeat purchases and less money spent on trying to convert new customers.
Brand fans, ambassadors, and influencers
A last advantage of building customer loyalty is that it can lead to brand fans, ambassadors, and even influencers. If you have a brand customers love, they will want to talk about it! Brand fans don’t receive any compensation but may post reviews online or recommend your product to friends and family. Brand fans who are really dedicated to spreading the word can become brand ambassadors. They have a wider reach and may do promotions, reviews, or recommendations for free samples of your product or special discounts. And if a brand ambassador has a large enough following online, they can become a paid influencer, posting about your brand on social media for free product or on a pay-per-post basis. Brand loyalty gives you access to these new forms of advertising and creates customers through the power of recommendations and word-of-mouth.
So remember- loyal customers create positive reviews, buy more and try new products, are less expensive than conversions, and can even be influencers for your business. Using programs to offer incentives to return, as well as offering consistent quality and customer service, can help create repeat customers. To increase sales, lower costs, and improve your brand’s visibility, it’s important to focus on building customer loyalty!