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.



What the Best Brands Do Differently to Win Customer Loyalty

In the past, imperfect or incomplete information led users to depend solely on their own experiences or those they heard through word of mouth from friends and family. When they found a satisfactory brand, they usually stuck to it. Brand loyalty was a form of risk avoidance.

Today we live in the age of information overload. Instead of having few sources of reference for reliability of various brands, we suffer from a surplus of opinions, reviews and ideas from too many sources than we can handle. All this information about brands, their past, their service goof ups or even glowing examples of their competition, has slowly eroded the loyalty that customers held dear in previous generations.

Yet, customer loyalty is not dead. Any Apple fan boy or PlayStation fanatic will testify to that. So, how do these iconic brands hang on to their customers for years, while others find it difficult to get a customer back for a second purchase? Here’s how.

1. It’s all in the Experience

A user experience that makes it easy for the customer to find what she’s looking for, an experience that encourages her to shop more, an experience that removes all friction from the purchase process – these are what a customer takes back home with her, more than the actual product purchased.

User experience does not have to do just with your website’s look and feel or your store’s design and layout. It has to do with every ‘moment of truth’ the customer experiences with your brand. This could be via a customer care call, your mobile app or even via a shipping experience. Work towards making it as seamless, quick and intuitive as possible to make your customers coming back for more.

2. Make Customers Feel Special

A good user experience referred to in the previous point, is one that ends up with a happy customer. However smooth your user interface maybe, no matter how great the product itself is, if the customer does not feel wanted or important, the chances of them coming back to your store are dismal.

You don’t have to do grand gestures to make customers feel special. Something as basic as giving a colorful cardboard hat to a child at a fast food outlet, makes both the child and the parent happy. A study by Barclay’s bank shows that “a smile and a friendly hello is the most common reason (59%) why consumers feel loyal towards small and independent retailers.

3. Service is not limited to the Customer Care Department

An organization that has the spirit of service goes out of its way to make sure a customer is taken care of in every way possible. Winning brands encourage a culture of service and problem solving. Every single member of the company is seen as a customer care representative – out to help out a customer the minute they need it. When something as important as customer service is left to be handled by just the customer service department, you’re making sure your service will never match up with the best in the business.

Why, even Craig Newmark – the founder of Craigslist – admitted he begins every morning by attending to customer service calls instead of plunging into emails or meetings.

4. Offer Exclusive Perks

It is hard to be indifferent to a brand that makes you feel exclusive. This does not mean that you should start discriminating between your customers. Rather, it means that the big spenders or more frequent buyers ought to get some perks for investing their time, faith and money in your brand.

The airline industry has perfected the art of making a customer feel exclusive with their ever popular loyalty programs. Thanks to air miles earned from specific airlines, customers prefer to be loyal to the one offering points, instead of shopping around for the lowest cost operator. This makes great sense in a struggling sector like aviation, when a customer is self-motivated to avoid other brands using such a simple and cheap solution. Some other examples of exclusive perks that brands offer are airline lounges at airports to loyalty card members, special discounted rates to loyalty club customers in the case of annual sales by high-street retailers and so on.

5. Wow your customers on a regular basis

Doing a great deed once in a while makes for a happy customer. But, in most organizations; this need to impress your audience to make them keep coming back is truly a flash in the pan than part of the organizational philosophy.

A pioneering brand like Virgin Atlantic takes the job of ‘wowing their customers’ on a regular basis very seriously. From a free chauffeur driven car to and from the airport, in-flight beauty therapists and manicurists for business class passengers, or the world’s first ‘Drive Thru Check-in’; Virgin’s customers definitely know brand loyalty extremely intimately. In founder Richard Branson’s own words, Virgin’s philosophy is to “catch people doing something right”.

5.	Wow your customers on a regular basis

6. Savings vs. Making a Connection

With the economy having barely turned a corner from the recent financial crisis, cutting costs wherever possible is fashionable. A common favorite for cutting costs is the customer care department. Automated call centers are cheap and help a healthy bottom line for one quarter. But what your brand really needs is to have healthy bottom lines in every single quarter to come. This does not come by pinching pennies on things that matter.

A real person on the other end of the phone line costs money – 35 cents vs. $7.5 dollars – but the relationship that you’ll build with that personal touch will payback your $7.5 manifold in the years the customer keeps coming back to buy from you.

7. Make them Feel Like You’re One of Them

While alienating customers is what no brand ever wants, they try very hard to make customers feel special, well treated etc. However, the best brands in the business don’t just proselytize their concern for the customer, they actually go ahead and make the customer feel like the brand is one of them, part of their lives.

Red Bull, the legendary energy drink maker, goes out of its way to make its customers feel like they are on their (customers’) side. They create brand ambassadors by being a buddy to their customers. Every year, Red Bull creates and sponsors wildly successful events in the various sporting fields like dirt bike racing or skateboarding putting its brand in the middle of all the youth. Its own sports and wellness magazine, Red Bulletin, gives users health advice, tips to take up exercise and so on. In the process Red Bull has ensured it has made itself a part of their customers’ daily lives.

Make them Feel Like You’re One of Them

8. Happy Employees make Happy Customers

We spoke earlier about customer service being everyone’s responsibility in a company. For an average employee to go out of their way and help customers, they need to be motivated enough in the first place. If your company fosters a culture of distrust, disrespect and lack of communication, your employees are not happy by any stretch of imagination. Expecting unhappy employees to keep your customers happy is a tall order, if not outright impossible.

On the other hand a happy motivated employee who loves his job and the organization, would exude positive vibes to everyone around them, including your customers.

9. Consistently Awesome

Your brand is only as good as your last customer interaction. Truly great brands go out of their way to ensure that every single interaction that a customer has with the brand is great.

This means consistent product and service delivery across every single channel you operate on. That’s a tall order, but then who ever claimed that winning a customer’s heart for life was going to be a walk in the park?

10. Express Your Shared Values

A recent Harvard Study found that customers don’t really care for engaging with their favorite brands. What they really do care about is the fact that their chosen brands share the same values as them. Hence it follows that an environmentally conscious user would prefer a Timberland while a health conscious user might go for Jamba Juice.

These shared values are engendered when brands stand up for what they believe in and share these beliefs with their customers through actions, not just words.

11. Say Sorry When You Screw Up. Really Mean It.

Much as we all would like it, no one is perfect including the biggest brands in the world. Mistakes can and do happen, and there’s only so much you can do about avoiding them.

However, the hallmark of a truly great brand is when they own up to their errors and put things right immediately. A brand that refuses to own up to the error in their ways risks losing customers’ trust and their wallet share. A good case in point is Lululemon and the 2013 incident with their see-through, easily damaged yoga pants. CEO Chip Wilson brushed off the whole issue by saying that his company’s yoga pants weren’t meant for overweight women. The public outcry that followed became even worse when Wilson’s ‘apology’ was so insincere and superficial, that it became the next PR disaster that the brand had to struggle with.

12. Listen to Your Customers

Customers like to be heard. Especially in the current social media age, their voices reach brands directly, instantly.

A good brand keeps its listening ears on and bows to the customer’s needs and opinions as it knows that customers make the brand.

Listen to Your Customers

When Gap launched its redesigned logo in 2010, they faced massive criticism of the new logo from all quarters, especially customers via social media. Customer savvy Gap, put its ego aside and heeded the voice of the user to revert back to its old logo within a week of launching the new one.

13. Show gratitude, Say ‘Thank You’

A brand that gives back to customers and to society at large says through its actions that ‘sales are not all we care about’. For any customer, it is crucial to know that he /she is looked upon as a real person who’s contributed to the company’s growth, instead of just another nameless, faceless statistic.

Anytime a customer appreciates your brand, reach out to them and thank them. Social media is a wonderful platform for exactly this. Create regular email campaigns that thank repeat customers for their business and encourage them to continue showing their love for your brand with their wallets.


Loyalty is the result of a history of positive experiences with a brand. You don’t need gigantic marketing budgets to foster customer loyalty. Just a resolve to treat every customer like they might be your last customer will help ensure that you’ll not see the back of your loyal customers anytime soon.

(Image Source: 1, 2, 3)