Has your business been struggling with decreasing customer footfalls? Do you fear losing out to large competitors like Amazon, Walmart, AirBnB and Uber. Nearly 70% of retailers fear the likes of Amazon, according to study by German marketing agency Territory ( Link Here). It is not surprising that the same retailers believe that one of the most potent ways to counter this threat is to focus on customer loyalty and customer engagement.
In this article, we explain the importance of customer loyalty and four critical-to-success actions that your business should focus on, to win loyalty of customers and increase stickiness of your brand.
Consider the below two journeys
New purchaser conversion journey – Trigger, Consideration, Active evaluation, Moment of Purchase, Post purchase experience
Loyal customer conversion journey – Trigger, Moment of Purchase
A loyal customer takes fewer steps before making a purchase decision with your brand than a new customer.
This is reflected in surveys which show that repeat purchases are 9x more likely to convert than new purchaser.
1. Change your mindset from customer acquistion to customer retention
We have observed that businesses are always ready to put in extra resources to bring in new customers. There is a lot of focus to drive that 1st purchase at the expense of areas like customer service & loyalty. One way to ensure there is renewed focus on retaining customers, is to ensure you track and act on post conversion KPIs like Customer Lifetime Value (CLTV), Churn and Customer Satisfaction metrics.
It is also important to not expect immediate improvement on these KPIs, just after launching new initiatives, as studies have shown that Loyalty will show compounded impact after a year.
A Bain & Co study shows that the break even point for loyal customers is around 12 months, and spending, referrals continue for over 3 years, much after you have sown the seeds for customer loyalty
2. Audit customer touch points and make them customer centric
The next focus area is to ensure that review all customer touch points and operating procedures. Reviewing and improving customer touch points can help improve customer satisfaction scores and also drive repeat business. In this age if price wars, customer service is seen as a key differentiator
Every person in your organization should treat each customer engagement in the same way which is aligned to your customer service vision. For e.g. we have seen many business incorporate themes like – transparency, respect, 360 degree, “customer is the king” as core tenants of their sales, marketing and support processes
3. Invest in tools to help you capture, store and use customer information
Businesses should spend time analyzing what customer information is being captured and where does the information reside. Review the quality of this information and perform basic clean up of your customer details. The minimum requirement would be to capture basic customer details on an excel spreadsheet. We have seen that below set of data is a good starting point.
NAME, PHONE NO, EMAIL ID, DATE OF BIRTH, GENDER, NATIONALITY, LANGUAGE PREFERENCE
Once you have this basic customer list, you can look for freemium tools like MailChimp, Constant Contact to begin with, and start sending email campaigns. You may also want to check with your existing product providers, if there are out of box features that help in managing customer records.
We will share our list of best free tools for small businesses, in subsequent articles.
4. Work with a team that understands loyalty
Building a successful customer retention strategy takes time and requires a strong team that “live and breath customers”. While it is entirely possible to build your CRM team from the ground up, often, small businesses seek external help in formulating a customized roadmap to customer loyalty.
At CarrotBox CRM, our team of experienced marketing professionals have helped many businesses in innovative and cost effective ways to increase customer loyalty. We share industry best practices and hand hold our clients before they can start running on their own.
So, to summarize, in order to remain competitive, every business needs to focus on
1. CHANGE OF MINDSET – Evolve from customer acquisition to customer retention mindset
2. AUDITING CUSTOMER TOUCHPOINTS – Refine your Standard Operating Processes to make them more customer centric
3. TREASURING CUSTOMER DATA – Ensure customer information is captured and stored, invest in free or freemium tools to help you quickly launch customer engagement programs and finally
4. INVESTING IN THE RIGHT PEOPLE – Build an internal team or find the right partner, to advice and help you along the long and rewarding journey of customer loyalty