Customer Loyalty: Maintaining It Once It Is Built
Customer loyalty is a fickle being. Just like every other relationship in your life, the hard part comes after it has been built. In a customer satisfaction study of 10 major industries, an average of 72% of the respondents indicated they were highly satisfied with the products or services received. Yet, 88% said that they were willing to switch providers for any reason. If that startles you, it should!
How do you know which customers are most likely to defect? In his book, The One Number You Need to Grow, Frederick F. Reichheld contends that customer loyalty can be measured by asking customers a single question: How likely would you be to recommend our company to a friend?
Reichheld found that the percentage of customers enthusiastic enough to refer a friend or colleague directly correlates with growth rates among competitors in many industries. A recommendation is one of the strongest signs of loyalty. Customers who refer their friends and family to you are putting their own reputations on the line. They take this risk only if they are loyal and confident you’ll follow through.
Undoubtedly, many of your competitors offer quality products and services with prices and delivery standards that are reasonable or excellent. How can you attract and win new customers while fostering loyalty among your current ones?
All things being equal, customers will go where they consistently feel well treated and appreciated. So, be intentional about your communication. Contact your customers more than when you want to sell them something. Offer useful tips. Send newsletters, press releases, and case studies, as well as relevant product information and timely incentives.
Although direct mail is often viewed as a way of winning new customers, its effectiveness as a customer loyalty tool should not be overlooked. Set up a series of mailers throughout the year designed to maintain your relationship with current customers. Implement a continuous client contact program that will demonstrate at regular, pre-planned intervals that you honestly and sincerely care about their well-being.
Communicate, cross-sell, educate, and survey your existing customers, and watch their loyalty grow. It is far more expensive to find new customers than to maintain your current customer base. So don’t forget to dance with the one who brought you.