Improving Customer Loyalty: How Can It Be Done?

Consumer habits have changed, they aren’t as loyal as they once were. They now have more choice and companies are more competitive when it comes to price and product selection. So, how can brands encourage their customers to be loyal to them and encourage them not to go elsewhere? QUIZ, retailers of party dresses, tell us more.

How important is customer loyalty?

In one study by Bain & Co., it was determined that customer loyalty is a crucial factor in profitability. Having loyal customers is an indication that a business is providing a sought-after service and that they’re meeting the needs of their market.

The study, titled “The Value of Customer Loyalty”, discovered that the average online clothing shopper wasn’t generating profit for the retailer until they had shopped at the website four times. This translated to a customer staying with a business for 12 months to allow the company to break even. In addition to this, a shopper’s tenth purchase was found to be almost 80% larger than the first. Statistics like these demonstrate how important it is to hold onto customers.

After a customer has been loyal to a business for some time, and has made repeat purchases with them, it’s likely that they’ll build up a positive relationship with the brand. These customers begin to trust this business too and this leads to customers recommending the service to others. This can then lead to new business from those who have learned about the brand’s positive reputation through word-of-mouth.

A business with a loyal customer base can also generate more cross-selling opportunities. For example, if a customer trusts a business as somewhere to buy a new dress from, if they were in search of new shoes, it’s likely that they’d go to the same place — knowing the quality of service to expect.

Another study revealed that 86% of customers are happy to pay up to 25% more for something if they were to be given a good experience. This is important to bear in mind too, as businesses can look to increase their prices if customers are aware of the good service that they offer.

The problem with friction points

One way to maintain brand loyalty is through reducing friction points. These are points where the customer resists the sale even though they may have had the intention of purchasing. This could be down to confusion, aggravation or tiredness. A company must work on reducing these instances in order to keep customers on their side and generate sales.

When looking at what pleases a customer, the CRM Barometer found:

  • 85% of UK customers would leave a brand because of a poor customer experience.
  • 52% of customers said that handling problems quickly with no queue is what they define to be ‘outstanding’ customer experience.
  • 36% said that having customer service available across many channels was important.
  • 22% said receiving relevant communication at the right time and through the right channel was something they value.

The findings are all in line with the impatience of customers in the digital age. And, in many ways, technology has made the sales process easier. From giving the customer instantaneous access to customer service channels, to the ability to see a full product range with the click of a few buttons. How else can companies reduce friction points through technology?

One strategy is through one-click-buying. This usually involves a customer inputting their payment and delivery information one time only and the website remembering this — enabling customers to simply make a purchase with the press of a ‘buy now’ button.

Multi-channel purchasing also helps. This could be in-store, through a website, or through social channels. This allows the customer to shop however they feel most comfortable and through a platform that is most convenient to them — hopefully giving them a positive purchasing experience with few friction points.

Detailed images of products also reduce purchasing uncertainty. This allows the customer to learn more about the product or service and find out if this is for them. A form of this technique is also used through influencer marketing, where individuals wear the products so that people can see what they look like on ‘normal’ people rather than just on the models on the website.

Ensuring that the site is user friendly is also important. This is achieved through simple navigation, mobile-friendly platforms and fast-loading pages.

Customised offerings

Offering a personalised service also helps to keep customers on board with the business. According to the DMA’s Customer Engagement 2017 report, 72% of customers would like loyalty offers to be more related to them and their needs.

Brands can learn more about their customers by gathering insights. A brand can build up a good picture of its demographic. Through this, a company should be tailoring offers and communications to truly target that audience. Not only does this make the customer feel valued, it also brings to their attention products and services that they may be genuinely interested in. Communications like these are more likely to result in a sale.

Keeping a loyal customer base is more important than ever. Although people are less likely to stick with one brand, there are things that companies can do to improve the likelihood that a customer will stay loyal. From taking time to reduce friction points, to introducing tailored services, a business must understand its customer’s needs to stand out from the rest.


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