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Transforming The Customer Experience

How Small Businesses Can Build Big Brand Customer Loyalty

Posted Oct 1, 2019 8:00:00 AM

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It’s easy to look at massive conglomerates like Kohl’s and Starbucks and think that customer loyalty programs are out of reach. How can a small business owner develop the apps, internal systems, and legal protections that these companies have? 

However, the idea that customer loyalty needs to be complex or expensive is a myth that needs to be busted. 

Any company can tap into customer loyalty to grow their brands. Here’s how you can use loyalty to expand your reach. 

Why Does Customer Loyalty Matter?

Every business needs a balance of new customers and repeat customers in order to stay healthy. 

The repeat customers spend more, are more likely to convert, and promote the brand, while the new customers help the business grow. If a business has too many new customers that don’t turn into repeat buyers, then it’s not offering a product or experience that makes people want to come back. Similarly, if it only relies on its loyal fanbase without bringing in fresh business, the brand is doomed to stagnate. 

Customer loyalty is so important that more than 90% of businesses have at least some retention or rewards program. Experts have found that a 5% increase in customer retention can increase sales up to 95%, and the cost of losing a customer is $243. 

In a perfect world, every customer who experiences your brand for the first time will return, again and again, and tell their friends how great they are. While that’s not realistic, you can increase the chances that your new customers come back – and that your returning customers become loyal fans. 

Customer loyalty isn’t just a marketing tool or business strategy; it is an essential part of your company management. Businesses that are strategic with their loyalty plans can build up their fanbase, even if they just run a single brick and mortar location. 

6 Tips Small Businesses Can Follow to Build Customer Loyalty

Small businesses vary by industry and product, but the staples of good customer loyalty stay the same. Follow these six best practices to increase your customer loyalty even if you don’t have a large budget to win people back. 

1. Set Up a Rewards Program

Any company can develop a customer loyalty rewards program, just go to your local nail salon and spa or sandwich shop. You will likely receive a card where if you “buy X items, you will get Y free.” This is brand loyalty in its simplest form. Customers are encouraged to choose your brand over others in your area as they work toward their loyalty goals. 

2. Create a Community Around Your Brand

If you look at boutique gyms and fitness clubs, you can see how they build customer loyalty by creating a community. That community is the people who support each other in their health journeys. The clubs often facilitate this with in-store experiences, health-food cooking classes, friendly fitness challenges, and mental health seminars. The goal is to take a business or product and turn it into a lifestyle. 

Look at your brand and the needs of your customers and see how you can help solve their problems and serve them in a way that builds customer loyalty and connects people to your business.  

3. Solicit Customer Feedback

Soliciting customer feedback is a great way to incentivize customers to return to your business. You can offer discounts or services or gifts as a thank you for their input. However, this strategy has an extra benefit for your customer loyalty plan. If you can show that you really listen to your customers and respond to their feedback, you can win people over for years. 

Use your customer feedback surveys and reviews to highlight problems in your company and show how you are fixing them. The best way to win customer loyalty is with a great brand. 

4. Encourage Customers to Be Social

If you’re trying to gauge the level of customer loyalty within your brand, test your social media engagement. Encourage customers to post about your brand to win a contest or leave reviews on Google, Yelp, or TripAdvisor. You can get an idea for the conversion rate to understand what percent of your customers are dedicated and brand loyal.

This strategy is also great for reaching new customers, as the posts of your loyal fans will reach new eyes of potential new buyers.
 

5. Train Your Staff to Connect With Customers

Everyone wants to feel like they are important and valued by a company, and this starts with your employees. Some experts estimate that customer service will be more important than price by 2020, and 70% of the customer journey is based on how the customer feels like they are treated. 

It pays to invest in customer care. Make sure your customers feel valued, remembered, and cared for. With the right staff that is willing to help, you can grow your customer loyalty organically.  

6. Communicate With Customers On Their Terms

Your customers don’t want to feel like they need to bend over backward to reach you. They want you to come to them. As a brand manager, look at how your customers want to communicate with your organization, how they want to learn about your brand, and how they want to solve problems. 

For example, 67% of customers say they turn to Facebook or Twitter for customer service issues – and 60% expect a response within an hour. If you only check your Facebook account every day or so, you could develop a backlog of customer complaints that need to be addressed. 

Build Big Brand Loyalty at Your Small Business 

You don’t need a big business to have big brand customer loyalty. Small businesses can also use smart, strategic tactics to boost customer experience and build lasting brand trust and affinity. Use the tips in this post to get started. 

Then, get even more ideas about how to build brand loyalty by launching a customer rewards program in our post: Why Don't You Have a Customer Loyalty Program Yet?