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Customer loyalty is vital to the growth and longevity of your business. About 82% of companies agree that it’s cheaper to retain old customers than acquire new ones. But, how do you break through the competition and bond with your audience in a way that encourages their devotion? If you’re wondering how to build customer loyalty, read ahead as we share proven strategies to develop and maintain these valuable relationships. 

What Is Customer Loyalty?

Customer loyalty is achieved when customers purchase your product or service repeatedly, enthusiastically, and without much consideration of your competition. It’s typically the result of offering a terrific product, combined with authentic branding, personalized marketing, and excellent customer service. Most importantly, customer loyalty is the ultimate goal of nearly every company. 

Why Is Customer Loyalty Important?

Loyal customers are one of the most valuable assets of any business. They provide a stable revenue stream, ongoing referrals, and strong social proof that are the lifeblood of any successful company. According to business.com, returning customers also spend 67% more than new customers. Some other advantages include:

  • Savings on marketing costs: Attracting new customers requires market research, advertising budget, time, resources, and strategy. On the other hand, existing customers are already in your email list, and many are engaging with your brand on social media.
  • Sell new products: Assuming that they enjoy their previous purchases, it should be relatively easy to convince them to try other products as well.
  • Build referrals: According to HubSpot Research, 81% of customers trust recommendations from friends and family. When you build customer loyalty, you’re also building essential referral networks. They’ll help spread the message about your brand, get more eyes on your offerings, and boost conversions.
  • Increase sales and profits: 65% of a company’s revenue comes from existing customers. A 5% boost in your customer retention will help increase profits by 25% to 95%.

Customer loyalty is incredibly essential for both online and offline businesses. Now, let’s take a look at how to build customer loyalty.

How to Build Customer Loyalty and Retain It 

Provide outstanding customer service

Excellent service can help to create lifelong customers. According to American Express, about 60% of customers will consider switching brands after two to three instances of poor service5. Listen to your customers’ needs and provide a solution to their requests and concerns in a timely manner. Also, make it easier for your customers to get in touch with your business by leveraging available technologies. Many companies are starting to employ AI chatbots to provide 24/7 assistance to website visitors. These chatbots can provide relevant product recommendations that help to boost conversions and even upsell consumers.

Reward customers with special offers and discounts

Keep your customers coming back by giving them special offers, sales, and discounts as a “thank you” for their business. Ensure that the special offer or discount is relevant to the needs of each particular customer to increase success rates. Regardless of your preferred strategy, always make an effort to help them feel appreciated.

For additional reading on creating promotions and discounts:

A Guide to Discounts and Promotions for D2C Brands

Leverage user-generated content (UGC)

Businesses can build and maintain customer loyalty by promoting user-generated content (UGC). The UGC strategy helps your audience feel seen — like they’re part of your brand. To create an effective UGC campaign, you can develop a hashtag that people use to participate in your program. Many customers will take part just to see their images or stories shared on your company page. Or, they may join in on the fun if you provide an incentive, like a giveaway. Examples of UGC includes photos of customers wearing their favorite items from a new clothing drop and Instagram Stories from people showing how they use a beauty brand’s skincare products in their cleansing routine.

Explore examples of UGC:

User-Generated Content: 7 Brilliant Examples

Create a unique customer loyalty program

Many businesses, including airlines and coffee shops, implement customer rewards or loyalty programs that serve as powerful tools for enticing previous customers to return. Customers can accumulate points through the loyalty program, which can be converted to shopping vouchers, exclusive holiday rewards, and more. It’s also an excellent way to upsell — patrons could earn more points with higher values. 

You could also discount new products and those items in need of promotion. Also, consider offering rewards for reviews of your products to build loyalty and attract new customers with your rave reviews. Referral programs are also a must. Give an award to customers when someone they refer makes a purchase.

On how to build customer loyalty programs: 

Customer Loyalty Programs: Engage Your Customers

Know your customers

When contemplating how to build customer loyalty, you must take the time to understand your customers on a personal level. Listen to them, share your values, and build a relationship with them. If you want loyal customers, you need to develop a customer-oriented mindset. Let your customers understand that you have their best interests at heart. Also, ensure that you reflect this in your actions.

Create a sense of community

Take advantage of the numerous social media platforms to create a community for your current and potential customers. Through the community, you can start a conversation with your existing customers and target audience. You can also encourage them to post photos or videos of themselves with your product to launch a UGC campaign, as discussed above. 

Get personal

Get personal by creating customized emails and messages for each recipient. Personalized emails are known to deliver 6x higher engagement rates than impersonal emails. In the email, address the customer by their name, and include a personalized message that appeals to their unique interests. For example, you can send special greetings and offers on their birthday and customer anniversary to treat them to something fun. This type of gift builds emotional ties and positive feelings toward your brand. 

Beyond customized emails, don’t forget to use personalization in retargeting campaigns to existing customers, as well. A remarketing campaign focusing on past customers can encourage them to come back and make a purchase, and even upsell them to higher-value products. Since you already have information on what they are interested in based on past purchases, you can easily create tailored product recommendations that will entice them to engage and convert.

For personalization tips: 

Personalized Marketing: 7 Actionable Tips

How Does Customer Loyalty Improve Brand Image?

Loyal customers often share product and service feedback with your company and their networks. This type of social proof is a crucial part of the buying decision process for other consumers. You can share these testimonials, customer reviews, and feedback on your website or social media platforms. 

Honest feedback can help you to improve products and service delivery, gain consumer trust, and boost sales. All of these activities will help retain customer loyalty and strengthen your brand image.

How Does Customer Loyalty Minimize Costs?

Serving loyal customers is very cost-effective. These returning customers are already familiar with the products and services you offer. They can help market them to their friends and family using word-of-mouth and social sharing. This free promotion will help minimize service and marketing costs. Since you already have their contact information, and they are likely following you on social media, it is free and easy to communicate with them about new products, sales, or other company information. 

For more on word-of-mouth marketing:

How to Supercharge Word-of-Mouth Marketing Through Customer Experience

How Does Customer Loyalty Improve Forecast Accuracy?

Forecasting is a vital part of planning and running your business. Accurate forecasting makes it easier for companies to calculate growth rate, determine expenditures or discounts, and plan for emergencies. The feedback and testimonials from loyal customers will provide your business with valuable information about your product or service pricing, areas that need improvement, and the type of products these customers expect in the future. Since they purchase regularly, loyal customers can help you to set realistic expectations of sales and stabilize or offset variations in buying patterns. 

Go the Extra Mile 

Loyal customers are at the core of every successful brand. These customers are always ready to spend their money on your products and services as long as you keep delivering the quality they expect. Loyalty means ongoing revenue and less demand on your marketing budget, ad spend, and acquisition costs. This is why you need to go the extra mile to retain existing customers and encourage commitment to your brand. By following the tips provided above, you can reap the rewards of building and maintaining customer loyalty.

Angie Tran
Author

Angie is the Content Marketing Manager at AdRoll. Prior to AdRoll, she was a Content Writer at various digital marketing agencies. A writer by day and a reader by night, Angie’s other hobbies include cooking and learning useless movie trivia.