Any company worth its salt seeks customer satisfaction, no less! But if you also earn their loyalty, your business will reach the heavens of brand recognition and growth.
Today I'll tell you what loyalty is, why this strategy is so important, and how you can earn your customers' loyalty.
What is customer loyalty?
Customer loyalty is a marketing strategy that seeks to generate positive impacts on people who have already purchased a product or service, in order to continue working on the connection with them.
This strategy seeks to build new bonds with consumers not only to encourage them to buy again, but also to awaken a feeling of belonging and loyalty towards the brand.
Building customer loyalty is not just about seeking repeat business and keeping them with you for as long as possible. The goal is to generate loyalty and build a solid, long-lasting relationship.
The crux of loyalty is that the person does not buy the product or service for its benefits and features (which is also true) but because it is you. Because they love you.
We could say that loyalty is a mix of branding and retention seasoned with a good dose of engagement .
Branding is essential to build a consistent and coherent brand, full of meanings that connect with your audience. These meanings are unique and set you apart from the competition.
Retention ensures that your customers stay with you as long as possible .
Engagement is the secret ingredient that generates preference and makes a customer have you in their Top of Mind as a reference brand.
What is the difference between customer retention and loyalty?
As we have seen, retaining and building customer loyalty are first cousins, but each has its own nuances.
Loyalty is born from customer satisfaction , from their connection and commitment to the brand . The customer chooses you voluntarily, by preference.
In retention, the decision is not always voluntary . Recurrence is sometimes due to other reasons in which there is no emotional involvement of the consumer. The consumer buys out of necessity, lack of alternatives, habit, price...
This is the case of telephone company customers. They do not usually have too many brand lovers in their ranks. We are in them out of necessity and we normally choose them for price or features, not because we feel sympathy.
Sometimes they even hold us against our will. Our commitment to them is not exactly engagement, but rather permanence.
And what is the difference between customer satisfaction and loyalty?
Customer satisfaction focuses on the experience that is generated when the product or service meets their expectations. It is the first step towards loyalty.
Although loyalty implies customer satisfaction, not all satisfied customers are loyal.
Benefits of customer loyalty
Having loyal customers is the dream of any business. But beyond dreams, there is profitability. Customer loyalty is a strategy that pays off. Let's see how much.
1. It is a very profitable strategy
Attracting customers costs up to 7 times more than retaining them.
Building customer loyalty is cheaper and easier. It's that simple.
You lower the CAC or allow yourself a higher CAC without reducing your profitability
CAC or Customer Acquisition Cost is the amount of money a company spends to acquire new customers. Therefore, reducing this cost means an improvement in profitability.
In general, a business that constantly has to “buy customers” in the market will hardly be sustainable and scalable, since it will have to assume high acquisition costs on an ongoing basis.
Customer retention reduces acquisition costs or, alternatively, allows us to compete france whatsapp number data with higher CACs without affecting profitability.
While having a steady flow of leads is vital for growth, it is through retention that long-term value is generated. It is estimated that 80% of turnover should come from repeat customers.
You increase the lifetime value (LTV)
Lifetime value is the profit a customer generates while he or she is with you. Therefore, the longer you stay with them, the more often they will buy from you and the higher your income will be.
Therefore, the interesting thing here is to encourage retention and increase the average ticket , using strategies such as upselling, cross-selling or retargeting. All of this is seasoned with a good nurturing strategy focused on customer loyalty.
What is upselling and crossselling?
