Best Practices: Measure and significantly increase customer loyalty

Customer loyalty is a critical success factor for your business. A high level of customer loyalty to your brands, products and services guarantees you steady sales. What can you do to improve customer loyalty? Here is some food for thought.

Therefore, it is of enormous importance to take a look at the topic of customer retention

Customer loyalty programmes are not new, but they are currently experiencing a real renaissance. Successful companies understand the value of their customers and therefore offer excellent after-sales service and (at least perceived) added value in the form of loyalty rewards. This is often not the case with companies that only focus on the key figure of turnover, where customer service is often neglected because it does not flush any cash into the till at first glance and is even regarded as an annoying cost factor. As soon as customers realise this, they leave. And what falls down at the back has to go back in at the front. New customers have to come quickly so that the balance sheet is right in the end. And customer acquisition is not exactly cheap.

Satisfied, loyal customers are the most valuable capital of any company! They recommend the company to others, buy from it again and again and forgive a mistake here and there without immediately leaving. They are also very committed (customer engagement) and therefore like to take part in customer surveys or work with motivation within a customer community and give advice and help to other customers and interested parties. Customers with a high level of customer loyalty are true brand ambassadors! For this reason, it is definitely worthwhile for every company to think about some kind of customer loyalty programme. From the sophisticated Starbucks app to the paper punch card at the café around the corner, there is a solution for every type of business and every price range. According to Bain & Company, a 5% increase in customer loyalty leads to a 25% increase in sales.

Start with the basics to increase customer loyalty

Before you start thinking about elaborate customer loyalty programmes, you should first take a deeper look at the basic processes between your customers and your company that are the real drivers of high customer satisfaction and accordingly increase customer loyalty per se, because high customer satisfaction inevitably increases customer loyalty. Below you will find some examples of how to increase customer loyalty with simple means.

Improve your after-sales service

Customers quickly see through it when companies do everything they can to get customers to buy products or services from them, but after the purchase there is silence. Such companies react quickly before the purchase, even have a preferred order hotline on the website, send their potential customers many follow-up emails as well as product information and purchase offers and entice them with discounts. When the purchase is made and there is a problem with the products or with the delivery, customers search for a long time for a service hotline or first have to torture themselves through FAQ’s before they reach any contact address that has anything to do with service. This behaviour makes for angry customers, but in no way for sustainable customer loyalty. As long as there are no problems, this strategy works perfectly. But if a product has a fault or a web service does not work for some reason, companies can most likely withdraw from the market. Then companies can most likely say goodbye to these customers. So be present even after the purchase, place a clearly visible service number on your website and at least provide a form for complaints and claims. A good after-sales service is the first important step towards increasing customer loyalty.

Shorten waiting times, whether at the checkout or in e-mail communication

People don’t like to wait for anything. Waiting is seen as wasted time and is a negative customer experience. No matter whether at the checkout or with enquiries via email. If you send an email in the evening with a question about a product or service, you expect an answer by 10 o’clock the next morning at the latest. Respond to customer enquiries as quickly as possible, never make your customers wait unnecessarily. This also includes that your employees are in customer mode when they enter the company in the morning, put their private smartphone aside and attend to the concerns of the people who indirectly pay them, namely the customers.

Be friendly and accommodating with complaints and grievances

If your customers have a complaint, don’t make them feel like they are the real problem. Look forward to complaints and grievances as well, because this will provide you with valuable and important information about your products. Take your customers seriously at all times, even if they are angry. Empower your staff in the complaints hotline to be able to make immediate decisions, such as replacing the product or repairing it free of charge, if the situation requires it and the costs are not too high. Often it is more economical to replace a product or have it repaired free of charge than to lose a valuable customer who would never buy from you again. In addition, this ensures high customer loyalty, because customers know that they can rely on your customer service.

Offer your customers a space to share

Customers with high customer loyalty and a strong emotional connection to your brands and products like to exchange ideas with each other. Many companies therefore offer their customers a space for exchange in the form of an online community. These communities are not just for customers to exchange information with each other. Here, companies can also call on their customers to collaborate on innovations within the framework of innovation management. It increases customer loyalty enormously when customers have the feeling that they can actually participate in the development or improvement of products or services. Customers in a customer community also offer each other support and assistance, which often relieves the company’s own support. In addition, customer surveys can be initiated quickly and easily via a customer community.

Reduce the effort required for your customers to interact with your company

Significantly enhance the buying experience for your customers by streamlining and simplifying your processes, enabling a smooth ordering process with the widest possible choice of payment options. Make sure that the navigation of your website is very simple and that information can be found quickly, such as important service numbers or information on prices and products. If you place great emphasis on customer loyalty, then make it as easy as possible for your customers to get in touch with you, preferably via all possible communication channels such as mail, chat, telephone, social media, etc.

Measuring customer loyalty with the Secure Customer Index

The market research company Burke, Inc. developed a way to measure customer loyalty called the Secure Customer Index or SCI for short. Most major conceptual and measurement models of customer satisfaction explicitly include elements related to customer value and loyalty. Satisfaction is a necessary but not a sufficient condition for customer loyalty. Customer loyalty is reflected in a combination of attitudes and behaviours. It is usually driven by customer satisfaction, but also involves a commitment on the part of the customer to make a sustained investment in an ongoing relationship.

A very valuable and powerful measure of customer loyalty is therefore the Secure Customer Index, which is determined from three questions:

• How satisfied are you with our company overall?
• Would you continue to buy our products in the future?
• Would you recommend us to friends and acquaintances?

Customers who answer all these questions positively are considered secure customers according to the Secure Customer Index. This means that customer loyalty is extremely high. The Secure Customer Index, with which you can measure customer loyalty, is survey-based and can easily be incorporated into any customer survey.

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