Customer loyalty: tips and best practices for measurement and significant increase

High customer loyalty is the basis for enthusiastic customers and a successful business model. Customers who are regular customers or repeat buyers support the company through continuous sales and recommendations. On the other hand, they increase the return on investment for customer relationship management because they reduce the company's internal effort to acquire new customers.

Why customer loyalty is a highly relevant aspect for companies

Customer loyalty programs are not new, but are currently experiencing one radical further development through the change processes initiated by customer centricity. Successful companies understand the value of their customers and therefore offer excellent post-purchase service and (at least perceived) added value in the form of loyalty rewards. This is often not the case for companies that only focus on sales as the key figure. Customer service is often neglected because, at first glance, it doesn't bring any cash into the till and is even viewed as an annoying cost factor. As soon as customers realize this, they will 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 in the end is correct. And customer acquisition isn’t exactly cheap either.

Satisfied, loyal customers, who ideally act as advocates and brand ambassadors for the company, are the most valuable asset of any company! They recommend the company, shop there over and over again and forgive a mistake here and there without leaving straight away. They are also very committed (customer engagement). You are intrinsically motivated and enjoy taking part in customer surveys or working actively within a customer community where you give advice and assistance to other customers and interested parties. Loyal, enthusiastic customers with high customer loyalty are true brand ambassadors! For this reason, it is definitely worth considering some kind of customer loyalty program for every company. From the sophisticated Starbucks app to the paper punch card at your local coffee shop, there's a solution for every type of business and every price range. According to Bain & Company, a 5% increase in customer retention leads to a 25% increase in sales.

To increase customer loyalty, start with the basics

Before you think about elaborate customer loyalty programs, you should first take a deeper look from the customer perspective at the fundamental processes between your customers and your company. What are the real drivers of high customer satisfaction and how can customer loyalty be increased per se? The aim is to increase customer loyalty through high customer satisfaction. In general, it is important to distinguish between aspects that actually lead to dissatisfaction among customers, to identify factors that customers take for granted - only the lack of them leads to dissatisfaction, but you cannot achieve enthusiasm with them - and to identify aspects that are important for them Offer customers real added value, inspire them and ultimately represent the icing on the cake for customer loyalty. Below you will find some examples of how you can increase customer loyalty using simple means.

Improve your after-sales service

Customers quickly see through when companies do everything they can to get customers to buy products or services from them, but there is silence after the purchase. 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. Once the purchase has been made and there is a problem with the products or delivery, customers spend a long time looking for a service hotline or have to wade through FAQs before they get to any contact address that has anything to do with service .

This behavior leads to angry customers, but in no way ensures lasting customer loyalty. As long as there are no problems, this strategy works great. But alas, a product has a bug or a web service doesn't work for some reason. Then companies can most likely say goodbye to these customers. So be present even after the purchase, place a service number clearly on your website and at least provide a form for complaints and claims. Good after-sales service is the first important step to increasing customer loyalty.

Shorten waiting times, whether at the checkout or when communicating via email

People do not like to wait for something. Waiting is seen as wasted time and is a negative customer experience. No matter whether at the checkout or with enquiries by e-mail. 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 take care of the concerns of the people who indirectly pay them, namely the customers.

Be friendly and accommodating with complaints and complaints

When 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 bring you 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 exchange ideas

Customers with a high level of customer loyalty and a strong emotional bond with their 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 your customers have to spend interacting with your business

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, phone, social media, etc.

Respond to negative reviews on review portals to improve customer loyalty

If you want to increase and improve customer loyalty, you should always respond to customer feedback, whether it reaches you by mail or via rating portals and social media networks. Because if your customers realise that you take their feedback seriously, then they will also give you another chance to correct a mistake or misconduct. With the QuestionPro app for reputation management, you have an overview of all reviews on review portals, such as Google My Business, and can react quickly to negative customer reviews.

Measure 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 customer 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 also buy our products in the future?
• Would you recommend us to friends and acquaintances?

Customers who answer all of these questions positively are considered secure customers according to the Secure Customer Index. So customer loyalty is extremely high here.

The Secure Customer Index, which you can use to measure customer loyalty, is determined based on surveys and can easily be incorporated into any customer survey.

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KEYWORDS OF THIS BLOG POST

customer retention | Customer Experience | Suggestions | importance | steps