How small businesses can build customer loyalty with 7 simple, cost-effective tips.

customer loyaltyMost small business owners appreciate the importance of improving customer loyalty and why customer retention is so important to their business. We know that it costs far more to acquire a new customer than to retain an existing one and that loyal customers spend more money than new ones.

So how is it far more of our time, effort and budget is focused on acquiring new customers, whilst existing ones get sidelined or put at the bottom of the to-do list?

You don’t need a huge budget to improve customer loyalty

So, if you are a small business owner wondering how on earth you can stretch your budget to incorporate improved brand loyalty then don’t worry, enjoying high customer retention rates doesn’t just need to be the domain of big companies with big budgets. In fact, where customer loyalty is concerned, small businesses may actually have the upper hand. A smaller customer base gives businesses the advantage of being able to really get to know their customers and offer a more personalised service, which is one of the key components to winning customer loyalty.

Of course, the ultimate goal of improved customer loyalty is not just to win repeat business but to get your loyal customers to become advocates of your brand. Having a loyal band of customers who actively recommend your business to friends and family is invaluable. Indeed 92 percent of people trust recommendations from friends and family more than all other forms of marketing. Strengthening the relationship you have with your customers is well worth the time and effort you may need to out in.

“Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you” Chip Bell

Fascinating customer loyalty statistics

Lets first remind ourselves with some interesting statistics of why small businesses need to spend some time planning and implementing ways to improve their customer retention rates.

7 tips to increase customer loyalty without a huge budget

As I mentioned earlier you don’t have to have a huge budget and offer all singing, all dancing marketing communications or grand loyalty schemes to improve customer retention. There are simple, cost-effective and common sense ways to improve customer loyalty that require little more than a bit of time and effort.

Customer centric1. Be customer-centric

“Revolve your world around the customer and more customers will revolve around you”. Heather Williams

The starting point is to always have your customers right at the heart of your business, from planning,  product development, strategy, marketing communications, customer services, shipping, website design, content strategy to your online checkout process. If everything you do puts the customer first then you are probably giving your customers an all round positive, relevant experience. The result being the higher the likelihood of your customers returning for more.

Of course making the customer the centre of your business does means it is essential that you spend time really getting to know and understand your customers. The beauty of being a small business means you have a smaller client base and more direct and frequent contact with customers. This can be used to help you build up a better picture of who you customers are and what it is that makes them tick. Get that right and everything else follows on from there.

customer journey2. Focus on the customer journey

To build customer loyalty you need to focus on improving your customer’s whole experience with you. The journey your customer takes from start to finish should be excellent. You may have an amazing, competitively priced product, but if other areas let you down for example, your website design is confusing, your checkout frustrating, shipping inflexible or your customer services poor – you will not get a customer to come back.

  • 8% of consumers have bailed on a transaction because of a poor service experience
  • 47% of consumers said that although they may have a company preference, if they can’t find what they’re looking for on that site quickly, they’ll go elsewhere
  • 48% of consumers say that it’s when they make their first purchase or begin service is the most critical time to gain their loyalty 

So look at all of the individual elements that make up the whole customer journey and see how they can be improved on.

old vintage telephone representing customer services3. Offer exceptional customer service

Poor customer service is a surefire way to ensure customers don’t return to your business – regardless of how good your product is. Every year businesses loose 10 to 30 per cent of their customers, for which bad customer service accounts for 68%.

“This means if you have 100 customers you could lose 20 customers every year due to bad customer service (even if you don’t agree it’s bad!). These ex-customers will each tell 8-16 people about their bad experience, which means up to 320 people could be thinking bad things about you.” Marketing Donut

You are no doubt all familiar with the saying ‘good manners cost nothing’. Well good manners is at the heart of exceptional customer service and isn’t something that requires any budget whatsoever. Excellent, personable customer service will appreciated by your customers and goes along way towards building a positive image of your business. Much of the loyalty around the John Lewis brand is built around how it strives to offer exceptional customer service. This is a quote (one of many) on the John lewis website that highlights just how successful John Lewis is at this:

“I probably could have bought it cheaper elsewhere but I wanted the reassurance of the John Lewis service” John Lewis customer comment

Of course unlike huge companies with dedicated customer service departments, the chances are as a small business owner customer service is just one of the many hats you have to wear yourself. However, his doesn’t mean excellent customer service is unattainable. A few simple things can make a huge difference:

  • Be patient, polite and well-mannered at all times. Please and thank you goes along way and costs you nothing. Try to offer your customers the service you would expect to receive yourself.
  • Answer complaints quickly and pleasantly. Don’t forget a disgruntled customer will remain loyal is they feel that they have been listened to and their complaint has been dealt with satisfactorily.
  • If you are pressed for time then set up a Frequently Asked Questions page.  Directing more frequent customer queries to this page will free up time for the more complicated ones.
  • Be consistent. If other members of staff also deal with customer service then make sure they are fully briefed on how you expect them to deal with queries and complaints.

Blog definition image4. Give your business a personality

Remember people like to do business with other people.  As a small business owner you are in the opportune position to give your business some of your personality and make your brand more memorable. A business able to build an emotional connection with their customers is more likely to have a higher rate of customer retention. Social media is a great way to interact with your customers in a more personable way – it is your opportunity to let customers see the human behind the business and build stronger relationships. A blog or email newsletters are also excellent ways to stamp your business with a bit of personality.

reward customer loyalty5. Reward loyalty

62% of consumers don’t believe that the brands they’re most loyal to are doing enough to reward them. Thanking customers for their loyalty doesn’t have to involve a sophisticated loyalty programme.  It’s just taking the time to think about how you can show your most loyal customers that you appreciate their business. For example:

  • Reward loyal customers with an occasional gift voucher or special promotion such as 20% off or free postage
  • Give loyal customers ‘early doors’ to any sales you have planned
  • Offer special VIP previews of new product launches or ranges

I recently received a ‘no strings attached’ £10 gift voucher from a well known clothing company as a reward for being a loyal customer. Not only did I feel valued, the company benefited from me purchasing clothes well over the value of the  £10 voucher that I probably wouldn’t have thought to have bought otherwise!

customer voice6. Give your customers a voice

Providing the opportunity for your customers to be able to feedback and comment on your business helps build a relationship by showing them that their opinions matter to you.   So always welcome feedback (both positive and negative) and thank customers for taking the time to comment. Create an environment where it is easy for your customers to interact with you, such as having the facilities for customers to review your products or services, be active on social media, send out a customer survey or encourage comments on your blog. Of course make sure you take the time to thank customers for their comments and respond appropriately!

customer communications7. Keep in regular contact

Keeping in regular contact with customers is important and doesn’t need to cost the earth. Email and social media a both effective and low-cost ways to keep your customers up-to-date with whats going on with your business. This doesn’t mean bombarding customers with sales promotions all the time, rather focus on added-value content like highlighting new blog posts they may find interesting, sending out an informative newsletter, show them new products you may have launched or keep them up-to-date with wider industry news. It’s all about making your customers feel they are a valuable, important part of your business.

We’d love to hear your thoughts and comments on this post, so please do leave a comment.



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