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Some people think that customer loyalty is a relic of the past.
Too many companies offer way too many products to stay loyal to one brand, right? Only few will choose Toyota because their father used to drive a Toyota Pickup in the 80’s. You won’t find a housewife buying the same baking powder because her mother and grandmother used it.
Times have changed.
But does it mean that loyalty sank into oblivion? Not at all. There is only one thing that has changed: the way customer loyalty can be gained. Now, besides giving the best possible service and product, you need to give people more reasons to buy from you.
There are two recipes for success. You can either appeal to your customers' reason and offer benefits they won’t resist, or you can speak to their hearts and show that you share the same principles.
How to keep customers loyal
You can come up with the most brilliant idea for attracting customers to your brand, but if you forget about delivering exceptional customer experience, it’s not going to work out.
Great quality of your products and services is something you need to start with. If your product is lacking quality, even the best marketing team in the world won’t help you to keep your customers.
Another important thing is great customer service. Entrepreneurs tend to forget that customer service is an important face of the business. Whether it's call center or live chat support (if you fancy one, test it for free), make sure it’s welcoming and helpful!
When you’re sure your company offers the best products and services it can offer, it’s time to finding your own path to win customers’ attention. Copying someone’s successful idea may bring you some results but in most cases it's a solution that works for somebody else but may not necessarily work for you as well.
You should come up with something unique, something that will reflect how your company cares about a customer, and its personality.
There are two ways of doing that. You can seduce your customers with an awesome loyalty program or by representing the same values that your audience believe in.
Customer loyalty hack #1: reward your customers
There is no better way of showing that you care about your customers than by introducing a great loyalty program. It shows appreciation for customers you already have and encourages new ones to try your services. People may not like your fan page and may not know what your brand’s motto is, but if you give them a great loyalty program, they’ll love you!
Let’s see an example: AAdvantage from American Airlines, one of the most successful (and revolutionary!) loyalty programs of all times.
The program’s idea is simple: by flying with American Airlines or one of their partners, you earn “miles” which can be exchanged for flights, vacations, car rentals, ticket upgrades, airport privileges and many others. The more loyal you are, the more benefits you get. It’s easy and very useful for customers. Let’s say this straight: they love it!
Known from being “the first full scale loyalty program of the modern era”, AAdvantage revolutionized customer loyalty and is now the largest loyalty program in the world.
But back then in 1981, the company had to face the rapid appearance of competition which, one by one, started to imitate AAdvantage. To remain matchless, American Airlines had to make their program even more beneficial for their customers: established partnerships with hotels and car rental companies, offered promotions and discounts.
For many marketers, AAdvantage seems to be too perfect to be working. It is even said to be “too rich for the benefits drawn by the companies offering them.”
But the company doesn’t seem to go bankrupt. After all, with over 67 million users, one out of every 100 people in the world is an AAdvantage member. Impressive!
Customer loyalty hack #2: share your values
There is a large group of customers who make purchases in a different way than most shoppers. They are more conscious about the products they choose and the companies they buy from. They can’t be seduced with catchy slogans, creative campaigns and benefits. They are loyal to brands they share their values with.
By spreading awareness about your brand’s values, actions and beliefs, you can let these people identify with it and be loyal to it.
A great example of a brand that benefited from sharing its values is Dove. In 2004 it started the “Real Beauty” campaign. The idea came from the company's study which revealed that only 2% of women would describe themselves as beautiful. Dove became an ambassador of natural beauty, started to challenge beauty stereotypes and provoked a social debate.
Here’s what the company states about their mission:
At Dove, our vision is of the world where beauty is a source of confidence and not anxiety. So, we are on a mission to help the next generation of women develop a positive relationship with the way they look - helping them raise their self-esteem and realize their full potential.
Dove’s campaign is a very interesting example for one reason: it was well received, but it became controversial at the same time. Many people criticized the whole idea, pointing out that Dove’s models were photoshopped.
Others did not like the fact that Dove was always choosing very specific models: with no scars, with flawless skin, beautiful hair and “not too curvy” bodies.
Despite the criticism, the “Real Beauty” campaign was a win for the company. By 2004 Dove was just one of many skin care product companies. Now, 11 years later, it’s one of the most recognizable companies in its industry and customers identify Dove as a brand promoting a positive body image.
Dove’s "Real Beauty Sketches" video has gathered more than 114 million total views in the first month, making it the most viral advertisement of all time! This also resulted in sale increase: from $2.5 billion in its inaugural year to $4 billion.
The importance of customer loyalty
Why is customer loyalty important? For a couple of reasons.
It is seven times more expensive to gain a new customer than keeping an existing one.
It is also much easier to sell your products to existing customers! Probability of selling something to new customers is about 5-20% compared to an existing customers: 60-70%.
Finally, the most loyal customers become your advocates, helping to build your brand and community around it. Such customers are priceless!
Unfortunately, it’s not easy to keep customer loyalty. Many business owners have no idea how to keep their customers and on the other hand, customers very often decide to switch to another company.
This is how Emily Collins, analyst at Forrester Research, explains it:
Your customers have fewer reasons to be loyal than ever before and are really less loyal than they’ve ever been before. This is because empowered customers are now in control. They want control over the interactions they have with brands.
It means that if you want to keep your customers, you have to stand out from the crowd and give them a reason to stay with you. You need to seduce them with outstanding products, attract them with extraordinary customer service and a reasonable price.
Then you can choose whether you like to speak to those customers who look for benefits in their relations with brands, or those who would like to support your values. You can give them a loyalty program they deserve or you can let your personality shine. It is up to you.
Each of these methods is equally good, but if you combine both of them, you can break the bank.
Cover photo courtesy of Hernán Piñera via Creative Commons.