How to Build Loyalty with Customers: 8 Steps to Customer Retention

January 26, 2023
Time:
10
mins
how to build loyalty with customers

Whatever your industry, acquiring and converting new customers is always a top priority.

But, when it comes to long-term business success, customer retention is even more important. In fact, 65% of consumer purchases are made by repeat customers.

Unfortunately, building lasting brand loyalty can be a challenge in today’s increasingly cutthroat market.

Consumers have more options than ever before, and their skepticism toward businesses is on the rise. According to a HubSpot study, 55% of US and UK consumers no longer trust the brands they buy from as much as they did in previous years.

So what steps can brands take to combat these challenges and win back consumer trust?

How can they create meaningful customer relationships and build brand loyalty that withstands the test of time?

In this article, we’ll provide everything you need to answer these questions - and more. We’ll cover:

  • What is customer loyalty and why is it so important?
  • How to measure customer loyalty
  • How to build loyalty with customers in 8 steps
customer conversation with agent

What is customer loyalty?

In essence, customer loyalty is a consumer’s commitment to your business and its product/service.

It can also be considered a measure of how likely your customers are to do repeat business with you.

A loyal customer will consistently choose your brand over its competitors, regardless of factors like price or convenience. 

Customer loyalty is typically the result of a quality product/service offering, authentic branding, an exceptional customer experience, and a focus on customer relations.

These elements combine to create a base of loyal and dedicated customers who trust your brand and keep coming back for more.

happy customer online shopping

Why is building customer loyalty important?

Brand loyalty is crucial because it can be the difference between a one-time purchase and a lifetime customer.

Acquiring and retaining long-term customers is a valuable investment, because:

  • Repeat customers spend more - Purchases by loyal customers are on average 33% higher compared to regular customers.
  • Customer retention is cost-effective - Acquiring new customers costs 5 times more than retaining existing ones.
  • Loyal customers are a reliable source of revenue - 52% of consumers go out of their way to purchase from brands they are loyal to.
  • Brand loyalty boosts profits - Increasing a brand’s customer retention rate by 5% can lead to a profit increase of 25% to 95%.
  • Customer loyalty is a competitive advantage - 56% of consumers favor the brands they are loyal to even if there are cheaper options available from competitors.

Ultimately, customer loyalty is a fundamental part of a successful growth strategy. Without a base of dedicated customers, your business won’t survive.

online shopping ecommerce

How to measure customer loyalty?

If you want to improve customer loyalty, you need to be able to assess how you’re currently performing and measure your progress.

This can be achieved by tracking the right performance metrics.

While every business will require its own approach to measuring customer loyalty, the following key metrics are always worth considering:

  • Customer satisfaction rate
  • Churn rate
  • Customer lifetime value
  • Conversion rate
  • Repeat purchase rate
  • Customer referral rates
  • Social media mentions

By analyzing this data, you can identify the areas in which you already excel and the ones that require improvement. You can then use this information to inform your customer retention strategy.

magnet attracting customers

How to gain customer loyalty: 8-step strategy

If you want to reap the rewards of customer loyalty, you have to earn it.

That means taking deliberate steps to retain and nurture your customers.

Let’s explore the 8 key steps to building brand loyalty that lasts.

1. Reward customers for their loyalty

Rewarding repeat customers is one of the most effective ways to win long-term loyalty.

You can best achieve this by creating a customer loyalty program.

A customer loyalty program is a retention strategy that gives consumers an incentive to repeatedly engage with your brand - the more they buy, the more benefits they earn.

The potential payoff for this strategy is huge. In fact, 62% of consumers spend more money on a brand after signing up for a loyalty program.

A successful loyalty scheme also leads to increased brand advocacy, more repeat purchases, and a higher average order value.

There are numerous types of customer loyalty programs, the most common being:

  • Points-based - Customers earn points for every purchase they make. These points accumulate and can be redeemed for various rewards, such as a free gift or discount.
  • Tier-based - Customers are categorized into different tiers based on how much they interact with your brand. The higher their tier, the more perks they receive.
  • Subscription-based - Customers pay a one-off or recurring subscription fee to gain access to specific benefits, e.g. free next-day delivery, access to exclusive content or products, etc.

A classic example of a successful loyalty program is Starbucks Rewards, a points-based system where customers earn loyalty stars each time they make a purchase. Earn enough stars, and you can claim a free drink or food item as a reward.

Another prevalent example is Amazon Prime, a paid subscription service that rewards members with various benefits. These include free delivery and access to TV shows, films, and music.

As there’s a multitude of ways to offer loyalty programs, this strategy is flexible and versatile. You can get creative and design a program that aligns with your business goals and target demographic.

However you choose to reward your loyal customers, remember that the goal is to encourage repeat business by adding value for the customer and building trust in your brand.

happy customer online shopping on laptop

2. Offer a customer referral scheme

Referral schemes work in a similar way to loyalty programs by rewarding customers for doing something that benefits your business.

With a referral scheme, customers gain specific perks if they successfully refer your brand to a friend or family member. This can be done by rewarding customers with loyalty points, discount codes, or a free gift when the referee signs up or makes their first purchase.

These schemes not only help to attract new customers (who could potentially become long-term devotees) but also motivate your existing customers to remain loyal and continue engaging with your brand.

Referral schemes also increase the occurrence of word-of-mouth marketing as they give customers an incentive to share their positive experiences of your brand with the people they know.

ecommerce customer shopping online via mobile phone

3. Prioritize customer engagement

If you want to capture customer loyalty and keep it, it’s imperative that you keep consumers engaged with your brand.

In fact, 54% of consumers will abandon a business relationship if they’re not provided with engaging content.

Customer engagement is the process of connecting with customers, across multiple touchpoints, in order to build authentic relationships with them.

It’s common for businesses to prioritize engaging with customers purely for the purpose of making a sale.

But, when it comes to boosting brand loyalty, the engagement that happens between and beyond purchases is just as important - if not more so.

You can keep customers engaged with your brand by:

  • Implementing a range of convenient channels, such as live chat and messaging channels, to interact with customers. That way, you’ll be able to digitally engage customers with ease via your website, app, and messaging platforms.
  • Regularly producing valuable and engaging content (e.g. blog articles, social media posts) that’ll appeal to the wants, needs, and interests of your customers.
  • Sending marketing emails to keep customers engaged and up-to-date with company news, product releases, promotions, etc. You can also use this medium to surprise customers with exclusive offers or discounts.
  • Providing a personalized ecommerce experience.
  • Using social media to create a digital community for your customers (see step 4 below).

Customer engagement is critical for brand loyalty because it strengthens the emotional connection between consumers and your business.

It also increases brand visibility and keeps your business at the forefront of customers’ minds.

happy engaged customer on laptop

4. Leverage the power of social media

Social media is an essential tool to have in your arsenal when you’re striving to build brand loyalty.

It’s essential because social platforms are powerful engagement tools that allow businesses to reach a vast range of consumers. Currently, more than half (59%) of the global population uses social media.

You can use the power of social media to create a digital community where customers can connect with your brand and with each other. This will help to forge more meaningful customer relationships as well as a feeling of belonging to the brand family.

If you want to establish a social media community that’ll cultivate customer loyalty, take note of the following tips:

  • Always respond to customers - You should endeavor to reply to all comments/posts about your brand on social media. Two-way communication is critical for establishing trust and for successful social media customer service.
  • Be present across platforms - It’s important to have an active business account on multiple social platforms (e.g. Facebook, Instagram, etc.). That way, it’s convenient for customers to connect with the community and they can interact via their preferred social channel. You should also implement social media customer support tools to make it easier for customers to interact with you via these platforms.
  • Get creative with content - The content you produce and post on your socials should be varied, engaging, and of interest to your customers. Be sure to share behind-the-scenes information about your business. This will humanize your brand and make it easier for customers to relate to you.
  • Entice your customers - For maximum results, you need to create a digital community that consumers want to join. One way to achieve this is by enticing customers with content that resonates and by creating a sense of exclusivity. You could also try hosting competitions or giveaways that’ll draw customers in and motivate them to share your content with their own followers.
  • Monitor social sentiment - Tracking your social media mentions and the general sentiment towards your brand on social platforms is vital. This data is an invaluable source of consumer feedback that you can utilize to improve customer perceptions of your brand.
social media channels

5. Improve your customer experience

The importance of delivering a positive customer experience cannot be overstated.

Statistics indicate that 86% of consumers are willing to pay more for a better experience. And, when faced with a poor experience, 96% of customers will abandon your brand for a competitor.

So, if you’re looking for a sure-fire way to boost brand loyalty, you should aim to deliver an exceptional experience that your customers can’t get enough of.

One way to go about this is by offering an experience that goes above and beyond your customers’ expectations.

Take Talkative customer Caseys Furniture as an example. They take the digital customer experience to the next level by using Talkative’s video chat to provide personalized virtual shopping consultations.

With this service, Caseys' customers can enjoy the in-store shopping experience from the comfort of their own homes.

Alternatively, you could focus on building long-term customer relationships through virtual clienteling experiences. This is a particularly effective strategy for increasing repeat purchases and customer retention rates.

However you choose to elevate the customer experience, the key to strengthening brand loyalty is to be consistent and continuously strive to improve. 

6. Provide exceptional customer service

Customer service is an integral part of the overall customer experience - and it can make or break a customer's devotion to your brand.

Case in point, 61% of consumers will cut ties with a business due to poor customer service.

The best way to ensure that your customers are getting exceptional service is to offer a wide range of engagement channels.

That way, they can contact your brand in the way that’s most convenient for them and they can access a level of digital customer service that’s akin to the in-store experience.

The following contact channels are invaluable tools for any brand looking to provide superior support to their loyal and high-value customers:

  1. Live chat - When it comes to digital customer support, live chat is one of the most essential channels to have at your disposal. It provides maximum convenience by giving customers access to real-time, chat support through your website, app, and messaging platforms. Research has found that implementing live chat customer service increases brand loyalty, sales, and revenue for 79% of businesses.
  2. Video chat - Sometimes a text-based interaction isn’t quite enough to give customers the humanized support they need. Video chat rectifies this issue by enabling face-to-face interactions in the virtual realm. It’s why video chat for customer service is such a powerful channel for customer relationships and online sales. In fact, customers who use Talkative’s live video chat are up to 4x more likely to make a purchase.
  3. Cobrowsing - Cobrowsing can be used alongside live chat or video chat to create a collaborative experience that takes digital customer support to the next level. It allows customers and advisors to browse your website or app together in real time. This creates a shared digital space where customers can be given hands-on guidance.
  4. AI Virtual Agent - While the above channels are fantastic tools for in-depth customer conversations, they have one drawback – they require human agents to be online. Chatbots and virtual assistants, on the other hand, are readily available to provide immediate answers to your customers 24/7. They can even escalate issues that are too complex for them to resolve so that a human agent can follow up. This ensures that you never miss a chance to be there for your customers, even outside of your operating hours.

By providing next-level service and support, you’ll prove to your customers that you care and are readily available to help. This is key to earning their long-term loyalty.

customer video chat with in-store assistant

7. Be true to your branding

Authentic branding is crucial when it comes to gaining consumer trust and securing brand credibility - both of which are fundamental components of customer loyalty.

By establishing an authentic and recognizable brand identity, you’ll humanize your brand so that customers can truly connect with you.

In order to build your brand, you need to get to know your target audience. 

Ask yourself, what resonates with your customers? What do they value in a business? What drives them? Then, use this information to create a compelling brand persona they can relate to.

One particularly effective branding technique is to forge an identity that isn’t typical of your industry. By aiming for something a little more niche or original, you’ll intrigue consumers and make them remember you.

Remember that, to attract loyal customers, you have to stay true to your brand values and be consistent in your market. 

You should strive to be a business that customers can always depend on to deliver.

customer handshake

8. Listen to customer feedback

Customers are more likely to remain loyal to brands that make them feel valued and heard.

That’s why it’s vital you gather customer feedback - and act on it. By doing so, you’ll prove that you care about your customer’s experiences and are willing to actively improve for them.

The easiest way to collect more customer feedback is to ask for it. 

Try sending out surveys by email and encourage customers to leave reviews/testimonials on your website and social pages after they make a purchase.

You could even offer a reward in exchange for a review, such as a discount code or loyalty points. That way, customers will be motivated to both provide feedback and buy more from you in the future - it’s a win-win.

customer attitudes emojis

The takeaway

The importance of customer loyalty in today’s climate cannot be overstated. 

A loyal customer base will help your business thrive during lucrative times, and can also keep you afloat during difficult periods. This is particularly significant in a post-pandemic world faced with soaring inflation and a cost-of-living crisis.

By following the steps detailed in this article, you’ll be able to cultivate lasting brand loyalty and stronger customer relationships.

But, if you want to get the most out of these strategies, you also need to invest in the right technology.

After all, how can you expect to attract and retain loyal customers if you don’t have the best platform to connect with them?

That’s where Talkative comes in.

Our platform was specifically designed to power better conversations and personalized experiences at every digital touchpoint.

We provide a complete suite of engagement channels that’ll allow you to connect instantly, and effortlessly, with all your digital customers.

As a result, you and your customer-facing teams will be fully equipped to engage and retain more customers than ever before.

Want to learn more? Book a demo today and discover how you can captivate loyal customers by getting Talkative.

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