Customer Loyalty

Creating loyal customers is important if you want your business to grow. On average, it costs as much to keep a customer as it does to acquire 5 to 8 new customers. You have a 70% chance on average of selling to an existing customer but only an average 20% chance of selling to a prospective customer.

Many businesses assess customers as being loyal based on the amount they spend with them or the total number of products or services they have, but most customers feel they are loyal simply if they stay a customer for a long time.

Creating customer loyalty is about treating them the way they want to be treated (see The 6 things that all customers want) and making them feel special occasionally – just like any other relationship.

To make them feel special, consider having special offers just for existing customers – include messages that relate to the length of time they have been a customer such as – “We have managed to get hold of this and, as you have been a customer for over a year, we want to make it available to you first”.

Simple loyalty schemes such as a card that is stamped every time they make a purchase work well – if you do this, do not send them for example a card with 10 spaces all blank – send one with 12 spaces but 2 pre-stamped. Research shows that customers value this more even though they have to get the same number of stamps. Typically, it doubles the number of customers who complete the required number of purchases.

Look at little ways you can make them feel special as well – keep details of what they have bought, anything personal you know about them, and have those details to hand the next time you speak to them. I once stopped in a country pub for 3 nights – enjoyed it so 4 months later I booked in again for a week. When I arrived, the landlord greeted me by name, had booked me into the room I had used last time as I had said I enjoyed it, poured me a pint of the bitter I had when I was last there and told me he had arranged for a bottle of my favourite wine to be ready if I wanted it. I was really impressed, but all he had done was to make some simple notes and keep them on a card in an alphabetical index which he checked when I called to book. I ended up stopping there for 6 months whilst working in the area.

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