Business is not just about customer acquisition. There are other important things involved in a successful business. Customer loyalty is one of them. The highest percentage of a company’s revenue is generated by existing customers. According to research conducted, getting a new client will cost you five times more than keeping an existing customer. This is why customer loyalty is critical in the business world.
Customer loyalty is the creation of a strong emotional bond between an organization and the customers. Apart from the need to purchase products, there are other factors that determine customer loyalty. This includes psychological attachment, industry competition, and customer satisfaction.
Enhance the brand image
There are numerous factors that boost the brand image of an organization and one of the important factors is the number of loyal customers. The higher the number of loyal customers, the better the image of the brand. Business increases sales in case there is a positive reputation. This also determines the popularity of the brand and improves the recognition.
The likelihood of having existing customers buying goods from you repeatedly is higher than new customers. Repeat business offers customers greater loyalty points or redeemable incentives that enable them to purchase products for free. Between you and your existing customers, it is always a win-win situation.
Customer retention and acquisition
If the percentage of customer loyalty increases, there is a high probability that the average profit per client will increase as well. Maintaining a customer is equally as important as getting a new one. Two great things that increase or build customer loyalty and trust are on-time services and good quality products. Referral bonus, loyalty points, and incentives are some of the things that a company can adopt to please and create existing customers in your enterprise. You must meet the expectations of existing customers and look after them regularly in order for them to stick with you, bring new customers and do more business with you.
Reduce marketing costs
The most economical and effective advertising tool is word of mouth in the recent age of digitization. Potential clients always trust the feedback given by their friends. They believe this type of feedback more than the fancy advertisements aired on the television. Loyal customers will discuss your services or products with friends and family. As a result, this brings new customers to your business without you taking any efforts to market.
Customer loyalty also enhances the relationship between an organization and the client. This maximizes sales and also directs new customers to your business through the help of existing ones. The process of customer loyalty also helps you to withstand competition from competitors. This happens when existing customers give their feedback about your services/products enabling you to improve on the weak points. This implies that you must work towards the strategy of customer retention for better results.