Forget about customer relationship management software, customer loyalty programs and cards. Customer loyalty can't be bought. It must be earned. Learn the 8 ways your small business can earn customer loyalty.
There is no shortage of lip service in corporate America these days about customer loyalty. The advent of the loyalty movement began in the 80's in the airline industry and expanded to cover every major industry. Research firm Gartner estimates American businesses spent more than 1 billion dollars on loyalty programs in the year 2003. Over 75% of consumers have at least one loyalty card, according to Jupiter Research. My wallet alone has 12 loyalty cards. But does it pay?
Does Customer Loyalty Pay?
A mere 5 % increase in customer retention can result in a 75% increase in customer value according to Fred Reichheld, author of "Loyalty Rules". A great reason to pay attention to loyalty. Here are more benefits:
Defining Customer Loyalty
Customer loyalty is the practice of finding, attracting, and retaining your customers who regularly purchase from you. Customer loyalty is not customer satisfaction. Customer satisfaction is the basic entry point of good business practices. Your small business should provide satisfaction to all your customers.
Loyalty cards and programs have their rewards and pitfalls. Rewarding customers for spending more dollars can create a vicious cycle of creating customers who want rewards and will look anywhere to obtain them. With loyalty cards and programs reaching a saturation point, how can a small business stand out?
Software, card programs, and loyalty schemes are the tools of customer loyalty programs but they aren't the essence of loyalty. To build loyalty, you must earn it. Look at these 8 ways to earn more customer loyalty for your small business:
8 Ways for Small Business to Earn Customer Loyalty
Company Loyalty First: Customer loyalty is a 2-way street. How can you expect customer loyalty if you don't practice company loyalty? Are you loyal to your best customers or are you giving discounts and extra attention to new customers? Loyalty is about being fanatical with devotion to your best customers.
