18 Ways To Build Long-Lasting Customer Loyalty & Boost Retention
Acquiring a new customer is between five and 25 times more expensive than retaining an existing one.1 Your marketing team will always need a healthy budget to continue attracting new customers, but once you have them, it’s crucial to cultivate the relationship and win their loyalty.
Every relationship needs to be nurtured. This is true for romantic relationships with spouses, platonic relationships with friends, and business relationships with customers. When you put the work into a customer relationship, their loyalty becomes a goldmine. Selling to them will be easier, and they’ll purchase more of your products and services without prompting, which can provide massive boosts to your bottom line—return customers generate about 40% of a store’s revenue.2
In this article, we’ll explore some of the best ways to enhance customer loyalty, so that you can lift your retention rates and achieve a hefty increase in revenue.
What is customer loyalty?
Customer loyalty is a state of faithful devotion where a customer will happily buy more of a brand’s products and services, and recommend the brand to others. It’s the result of a happy relationship between customer and brand, created through multiple positive experiences, which can be created in a variety of ways—by offering high quality products, providing an excellent service, offering rewards, an alignment of values, and many more which we explore below.
Customer loyalty is the way to retain customers, so is vital for company growth. By increasing customer retention by just 5%, a company can boost its profits by 25 to 85%.3 It’s easier to convert existing customers for new sales too—they have a 60 to 70% chance of buying from you again.4 Finally, when a customer’s loyalty reaches a certain level, they can develop into full-blown advocates who rave about your company to their friends and family. 92% of people trust recommendations from their friends and families, so every advocate you have for your business can generate a lot of revenue for you.9
17 tips on how to enhance customer loyalty
1. Create outstanding products and services
Apple has made billions from their high-quality electronics. Image from Apple
Above all else, the quality of your products and services are what keep customers coming back for more. There’s a reason that Apple makes $57 billion USD a year in profit:8 it produces outstanding electronics that people love to use. This is why hardcore fans will camp outside their stores for big releases, braving freezing temperatures so they can get their hands on a shiny new phone before anyone else.
You may not have the same resources as Apple, but there’s always little improvements that can be discovered for your products and services. Brainstorm some ways that you can turn your products from mediocre to amazing, whether through small refinements, or drastic changes. Talk to your customers about what they want out of your products and services, and create buyer personas to better understand their wants and needs.
A lot goes into making an excellent product. If you put the work in, you’ll exceed your customers’ expectations, and they will reward you with their loyalty.
2. Make everything easy
Between our jobs, friends, families, and hobbies, most of us don’t have time for much else. And to avoid wasting our precious time, we want everything to be as straightforward as possible, which is why we tend to favour brands that make life easy for us. We want their products to be easy to use, their websites to be clear and simple, their support to be quick and helpful, and their shipping options to suit our specific needs. When this combination is achieved, we’re drawn back to them like a magnet.
Spend some time breaking down the various parts of your business—sales, support, product design, and others—to identify where things can be easier for your customer. This might be diligently calling new prospects at the time they’ve requested, launching a chat system for answering support questions, or creating a usability testing program to improve your products. Every little bit of friction removed from your customer’s experience wins brownie points, which slowly gains their loyalty.
3. Exceptional customer service
Customers only tend to contact companies when they have problems, so they may already be in a negative frame of mind when you speak to them. It’s crucial to solve the customer’s problem as quickly and painlessly as possible, so they leave happy and satisfied. If the issue can’t be solved right away, carefully explain the next steps you’ll take so they have clear expectations.
People also like a variety of contact options for businesses. Older people may prefer to call, email, or figure out their issue by reading your support docs, whereas younger people may want to chat to your website or social accounts. Offering a variety of contact methods allows people to get in touch in the way that they feel most comfortable, which puts them at ease and can improve your chances of having a successful conversation (if you're interested, check out our article on How To Create A World-Class Contact Us Page).
Support training can go a long way to improving customer loyalty, so make sure your staff have regular refreshers. Reviewing calls and chats can also help you to identify where you’re failing or excelling, to figure out which staff need a little coaching, and which deserve pay rises for helping to boost customer loyalty.
4. Loyalty programs
When we benefit from something, we usually remain loyal to it. This is why customer loyalty programs work so well. Your regular customers will feel your appreciation through discounts, special offers, free products, and other exclusive benefits, which reminds them of your value. And when you make the effort to segment your customers to better understand their needs (more on this below), you can personalise your loyalty programs to make them even more effective.
5. Set expectations, and deliver on them
If you’re offering next day shipping, do everything in your power to get that product on the customer’s doorstep the next day. If you’re claiming that your service is the best on the market, make damn sure your service is amazing.
Customers remember promises that were made to them, so if you want to build a loyal army of advocates, be sure to deliver.
6. Ask for advice
Focus groups are one of many ways to get valuable customer feedback
It’s easy for a business to lose sight of the one thing that matters more than anything else: what the customer wants. Long-term employees can find themselves in a kind of vacuum where they trust their experience over everything else, neglecting the treasure trove of information that can be extracted from customers.
Every facet of the business can be improved by asking for customer feedback. How can your products and services help them achieve their goals? Which processes can be improved to make their lives easier? What is the number one thing they want from your business? These kinds of questions can unearth gems, obtained through surveys, one-on-one interviews, focus groups, social listening techniques, suggestion tools, and more. When you better understand your customers’ needs, you can hone your products and processes to perfection, and win their loyalty.
You should also let your customers know when you’ve implemented one of their changes. The customer who suggested it will be thrilled, and feel as though you really listen to them. Other customers may be impressed too, and be more obliged to make valuable suggestions of their own.
7. Consistent branding
Strong branding is instantly recognisable. We all know what’s inside a rectangular-shaped box with an orange tick on it, or a cardboard cup with an odd green mermaid lady stamped on the side. Wildly successful brands like Nike and Starbucks are consistent in their branding, which includes coherent packaging, imagery, fonts, their brand’s tone of voice, and how they position themselves in the market.
When implementing your branding, be sure to do the same. Your products, website, emails, and social media accounts should adopt the exact same principles of design, language, and intent, so that when a customer interacts with you in any way, it’s clearly you and not another company. Over time, people will develop a strong sense of what your brand looks, feels, and sounds like, which becomes burned in their memories, and makes them more inclined to remember you when they need one of your products.
8. Be ethical
With so many companies to choose from, having a strong ethical foundation for your company can be a persuasive point of difference. If you want to buy an engagement ring for your partner, but are concerned about the ethically-questionable diamond industry, would you feel better if your purchase includes a new water well installation for a poor community? That’s exactly what American-based diamond retailer Do Amore offers. Or perhaps you’re an animal lover who struggled to find good cruelty-free skincare products until you came across The Body Shop—a British cosmetics firm whose products are all ethically sourced and tested.
Being genuinely ethical will not only win customers, it’ll make them love you. Whether it’s climate change, plastic pollution, helping the poor, or another worthy cause, committing to it in a genuine and sustained way will make the world a better place, your customers more loyal, and your coffers overflowing.
9. Create good content
When done right, content marketing works like a dream. Companies like Lego, Ted, and Investopedia have content at the core of their marketing strategies, which helps to bring in millions of visitors for them each month.5
By regularly producing high-quality blogs, eBooks, videos, and other types of useful content for your audience, you’re giving them value without asking for anything in return. Compare this with “traditional” marketing campaigns like hard-sell adverts, and you can see why free content is so appealing to customers.
Eventually, your customers will start to see you as a “stand up guy” who really knows what they’re talking about. This makes them trust you, boosts their loyalty, and compels them to buy more of your products and services.
10. Make your website awesome
It’s obvious when a website is well designed. The navigation makes sense, information is relevant and easy to find, everything can be read easily, and the design looks beautiful. This kind of website creates a positive impression on your customers, who associate its awesomeness with your brand, and are much more likely to come back as a result.
An experienced design team with UX, design, and development skills should be able to create an attractive, highly-usable website that your customers will love, boosting their loyalty to you.
11. Use social proof
Our evolutionary ancestors have been living and depending on other people for about 50 million years.6 Sociability is baked into our very being, so when a trusted friend recommends the new burger joint that has opened up in their area, we’re much more likely to visit.
Social proof is a powerful concept that can help to garner your customers’ loyalty. You should encourage people to leave reviews on your Google My Business page, and then publicise those reviews on your website. You can also complete comprehensive case studies for your successful clients, which emphasise the value of your products and services, and how they might help to solve the reader’s own problems. Finally, if you’ve worked with any recognisable and reputable companies, add their logos to your website to let people know.
The most glowing reviews and case studies should also be shared across your social platforms, to remind the world how wonderful you are.
12. Host exclusive events
Free social events are an effective way to show your appreciation to loyal customers
Loyalty requires constant deposits to remain high, and what better way to thank someone for their loyalty than hosting a free event for them? These should be exclusive to your most loyal customers, and can come in many forms—an appreciation barbeque, free learning sessions, or one-on-one thank-you lunches. Throwing a shindig for a customer is a surefire way to express your appreciation for them, and they’ll love you a little more.
13. Analyse your data
In the mid-20th century, the invention of computers allowed us to start efficiently storing data, and the Information Age was born. Today, data remains one of the most useful ways to monitor and predict people’s behaviour, which can improve your marketing, selling, product development, and every other area of your business.
You can use an analytics tool to check which types of content are most effective, prompting you to create more. You can identify the pages with the highest bounce rates, and improve the content. You can understand which social channels are producing the most leads or sales, and focus your attention on them.
There’s so much useful data available for businesses. This can allow you to better service your customers, enhance their experience with the company, and boost their loyalty.
14. Segment your customers
Customer segmentation is a way to group customers with similar needs, which allows you to design products and services that are better suited to them, market more effectively, and support them exactly how they want to be supported. It’s a way to better understand your customers wants and needs—a differentiated approach to marketing and product development that recognises the common attributes of groups, and then capitalizes on them.
When you segment your customers, you’re talking their language. It leads to sharper marketing, better products and services, improved sales, better customer service, and more. The result is customer loyalty.
15. Create an online community
Social platforms like Facebook have made it easy to form thriving online communities. You might consider creating a page or group for your business, using it to announce exciting news, new features, company changes, and other useful information for your customers. You’ll also need to regularly engage with customers on the page/group, especially those seeking help.
A word of warning though: online communities can get toxic, so you’ll need to set clear rules and guidelines, and ensure they’re enforced.
16. Offer free shipping
Customers love free shipping, and they love return free shipping even more. If you can incorporate shipping costs into your products and services without losing too many sales, providing this service to your customers can be a great way to win their loyalty.
17. Promote your results
If you’re providing an ongoing service to customers, be sure to update them on their successes. You can create a simple automated reporting system that tracks their performance (something like DashThis), and then send it to them regularly. That way, they’ll be consistently reminded of how great you’re doing, and why your service is valuable.
Keeping them in the dark does nothing for your reputation. If you’re doing well for them, tell them often!
18. Create mission vision values statements
Mission vision values statements can help to create a genuine sense of purpose and personality for your company, which your customers can connect with. The result is a great sense of loyalty.
Customer loyalty programs
Customer loyalty programs work. In a study completed by usability firm Nielsen, 84% of customers said they were more likely to engage with a company that offers a loyalty program.7 Here are some of the most popular customer loyalty programs you can create.
Loyalty programs remind your customers that you value them
Points systems are famously used by credit cards and airlines as a way to encourage spending and flying. They can work exceptionally well for businesses, prompting people to boost their points from new purchases, which they can then redeem on special offers, free products, gift cards, samples, or anything else they may want. You can also encourage more buying by activating “bonus point windows,” where people can get even more points for a short period of time.
Points systems are complicated, so you’ll need customer loyalty software to manage them. It requires some investment to set up, but can be fruitful once in play.
Discounts work because of the urgency principle—the worry that if you don’t buy the product now at the cheaper price, you’ll pay full whack later. When offered as part of a loyalty program, exclusivity is added to the mix. The customer feels privileged to receive the discount offer, and concerned that they’ll miss the opportunity. This makes it more likely for them to grab it with both hands.
Loyalty-based discounts can be advertised to customers through email, on your social accounts (which can urge non-loyal customers to spend more), and on your website. There must be a system for distinguishing loyal and non-loyal customers (typically with customer groups), and an easy way for the customers to take the offer.
The word “free” has a powerful psychological effect on us. Like an eagle spotting a rabbit, we hone in on it and immediately dive to claim. Providing a free product or service to your loyal customers is a great way to show your appreciation, and invokes the reciprocity rule at the same time—the desire to repay the gift with something, which in the case of businesses, is buying another of their products.
Early access to products
When we receive something earlier than other people, we feel important (and probably a little superior). Giving early product access to your loyal customers shows them that they’re the most significant people on your books, which highlights their importance and makes them feel loved. You can also ask them for ways to improve the new product, which usually provides valuable information for your product development team, and makes the loyal customer feel even more special.
Your loyal customers are the people most likely to recommend your company to others, and you can capitalise on this with a referral program, paying them for their valuable referrals. The loyal customer gets a cherished bonus and likes you a little bit more, and you get a brand new customer. Win win!
Referral programs can take a lot of work to set up though. You’ll need a system that tracks and records new referrals, and a system for paying them. Customer loyalty software like Yotpo can do this for you, but there’s plenty of other options on the market.
If you really want to win your loyal customers over, giving them a free product on their birthday is a heartwarming gesture they’ll adore, especially if it’s something they want (this is where customer segmentation comes in). You can even stagger the product value based on how much the customer spends with you each year.
Brand attributes that lead to an increase in customer loyalty
Every brand has its own personality, which is formed out of its values. Certain brands have personalities that attract people like a magnet, particularly if it reflects some of their own characteristics.
These are some of the brand attributes that can lead to strong customer loyalty.
It sounds obvious, but when you build a strong culture of excellence in your company, you’ll create high-quality products and services that people love. Team members that strive for excellence created thriving departments, which will lead to oodles of loyal, highly-profitable customers.
Compassionate support teams quickly win customers over. They show genuine care for people’s issues and how they are affecting them, and then come up with a solution to satisfy. When you treat people this way, they’ll always have a positive impression of you, and will happily re-engage.
Eco-friendly products and services can be extremely popular with customers
The world has been in environmental trouble for quite some time. Between rising temperatures, plastic pollution, and alarming rates of animal extinction, people are more inclined to support businesses who help to alleviate these issues. If someone has a service choice between a notorious polluter and a company with sustainability at its core, as long as the product price doesn’t vary too much, they’re much more likely to choose the eco-friendly company, and keep on choosing them in the future.
People with strong moral characters are more likely to use companies who exhibit the same qualities. They may want to use businesses who are honest, ethical, and fair, always demonstrating that they’re doing the right thing. This covers every area of the company, including elements like sustainable products and packaging, transparency when problems arise, and marketing techniques that aren’t intrusive.
If a company consistently acts with integrity, trust is formed between company and customer, and a sense of loyalty can arise.
There may be starts and stops, but on the whole, the world is slowly becoming more equal and just. This is proven by a string of happy milestones—the abolition of slavery, giving women the right to vote, legalising same-sex marriage—which will continue to trend towards the side of support, empathy, and love.
As the world’s employers, companies have a big role to play in this area. They can create open and tolerant policies that encourage the hiring of people from all walks of life, providing equal opportunities regardless of race, gender, or background. When this information becomes public to paying customers, the good ones will love the company even more, and will happily swear their loyalty.
How do you measure customer loyalty?
Customer loyalty is a feeling, and notoriously tricky to measure. As a result, few effective measurement methods are available for customer loyalty, so you may need to use a combination of techniques to gauge an accurate score.
One popular method is Net Promoter Score (NPS), which works on the idea of recommendations. It measures people’s loyalty to a company by asking a simple question: on a scale of 0-10, how likely are you to recommend [your company name] to your friends, family, or colleagues? Anyone who scores between 1 to 6 is a “detractor,” those who score 7 or 8 are “passives,” and people who score 9 or 10 are promoters. Naturally, you want as many people as possible to be promoters, as these are your most loyal advocates who help to boost your revenue. If you want to measure a single value, this is the one to choose. Check out how to create a Net Promoter score in this article.
If NPS isn’t quite enough for you, you can get a more refined measurement of customer loyalty by measuring some of the following values:
- Average order value
- Purchase frequency
- Profitability per order (PPO)
- Customer retention rate (CRR)
- Customer churn rate (CCR)
By using these in conjunction with NPS, you’ll have a clearer understanding of how loyal your customers are, as well as which customers are the most loyal (and should be rewarded!)
When you nurture your relationships with customers, the rewards can be immense. They’ll buy more of your products and services, recommend you to their friends, and promote you on their social networks, which can lead to a massive boost in revenue. Don’t neglect customer loyalty—it’s a potential goldmine.
- Amy Gallo, 2014, The Value of Keeping the Right Customers, Harvard Business Review
- Chris Shalchi, Customer Loyalty Blockchain: A New Ecommerce Rewards Program, BigCommerce
- Jill Griffin, 1995, Customer Loyalty: How to Earn It, How to Keep It, Jossey-Bass, United States
- Paul Farris, Neil Bendle, Phillip Pfeifer, David Reibstein, 2015, Marketing Metrics: The Manager's Guide to Measuring Marketing Performance, Pearson, third edition
- Raghav Haran, 22 Brands with the Best Content Marketing Campaigns, Single Grain
- Evolution of lemurs, Wikipedia
- Jared Atchinson, How To Create A Loyalty Program, Forbes
- Apple: net income by year 2005-2020, Statista
- 2012, Consumer Trust in Online, Social and Mobile Advertising Grows, Nielsen