Strategies to Build Customer Loyalty

“It takes a lot less money to increase your retention of current customers than to find new ones, but I know I don’t give it as much effort as I should because it does take a lot of energy and effort!”

Strategize and Plan for Customer Loyalty

Do you even have a specific plan for building customer loyalty? I bet you haven’t given it as much thought as you should—because to tell the truth, I seldom gave it the effort it deserved! If you currently retain 70 percent of your customers and you start a program to improve that to 80 percent, you’ll add an extra 10 percent to your growth rate.

Particularly because of the high cost of landing new customers versus the high profitability of a loyal customer base, you might want to reflect upon your current marketing strategy. These four factors will greatly affect your ability to build a loyal customer base:

  • Products that are highly differentiated from those of the competition
  • Higher-end products where price is not the primary buying factor
  • Products with a high service component
  • Multiple products for the same customer

Market to Your Own Customers

Giving a lot of thought to your marketing programs aimed at current customers is one aspect of building customer loyalty. When you buy a new car, for example, many dealers will within minutes try to sell you an extended warranty, an alarm system, and maybe rustproofing. It’s often a very easy sale and costs the dealer almost nothing to make. Are there additional products or services you can sell to your customers?

Related: The Secret to Creating Lifelong Customers

Three years ago my house was painted, and it’s now due for another coat. Why hasn’t the painter called or at least sent a card? It would be a lot less expensive than getting new customers through his newspaper ad, and because I was happy with his work I won’t get four competing bids this time. Keep all the information you can on your customers and don’t hesitate to ask for the next sale.

Use Complaints and Problems to Build Business

When customers aren’t happy with your business they usually won’t complain to you; instead, they’ll probably complain to just about everyone else they know, and take their business to your competition next time. That’s why an increasing number of businesses are making follow-up calls or mailing satisfaction questionnaires after the sale is made. They find that if they promptly follow up and resolve a customer’s complaint, the customer might be even more likely to do business than the average customer who didn’t have a complaint.

Years ago, before the age of the Internet and even before PCs, the magic equipment in our office was the IBM electric typewriter, which was available with memory! Magic in those days! But as well built as these machines were, they would break down from time to time. The IBM repair person would show up promptly, speak professionally, and be wearing a professional-looking tie and jacket. Then after the repair was done, and you were grateful and thankful, he would ask if you might be interested in considering upgrading your current machine or buying additional ones.

It was a perfect marketing strategy—no need to get the customer on the phone, no need to make an appointment. The salesperson in the guise of the repair person was not only on your premises but had just reinforced your trust and respect for his service.

Related: How Customer Feedback Can Help Your Business Grow

In many business situations, the customer will have many more interactions after the sale with technical, service, or customer support people than they did with the salespeople. So if you’re serious about retaining customers or getting referrals, then these interactions are the ones that are really going to matter. They really should be handled with the same attention and focus that sales calls get because in a way they are sales calls for repeat business.

Reach Out to Your Customers

Contact, contact, contact with current customers is a good way to build their loyalty. The more the customer sees someone from your firm, the more likely you’ll get the next order. Send holiday cards, visit them at trade shows, and stop by to make sure everything’s okay.

Send a simple newsletter to your customers—tell them about the great things that are happening at your firm and include some useful information for them. Send them copies of any media clippings about your firm. Invite them to free seminars. The more they know about you, the more they’ll see you as someone out to help them. And the more they know about your accomplishments, the more loyal a customer they will be.

Loyal Customers and Loyal Workforces

Building customer loyalty will be a lot easier if you have a loyal workforce—not at all a given these days. It is especially important for you to retain those employees who interact with customers, such as salespeople, technical support, and customer-service people. Many companies give a lot of attention to retaining salespeople but little to support people. I’ve been fortunate to have the same great people in customer service for years—and the compliments from customers make it clear that they really appreciate specific people in our service function.

Related: Use Social Media To Get Customer Feedback

The increasing trend today is to send customer-service and technical-support calls into queue for the next available person. This builds no personal loyalty and probably less loyalty for the firm. Before you go this route, make sure this is what your customers prefer. Otherwise, I’d assign a specific support person to every significant customer.

One last thing: don’t tell your customers your 800-line phone number is for orders only!

Takeaways You Can Use

  • Have a strategy for building customer loyalty.
  • Keep selling your current and past customers.
  • View customer complaints as an opportunity to shine.

How to Get Your Customers to Do Your Selling for You

About Bob Adams

Bob Adams is a Harvard MBA serial entrepreneur. He has started over a dozen businesses including one that he launched with $1500 and sold for $40 million. He has written 17 books and created 52 online courses for entrepreneurs. Bob also founded BusinessTown, the go-to learning platform for starting and running a business.