How Do You Cultivate Customer Loyalty?
Getting repeat business from your customers is the holy grail. You'll need to advocate for your customers and earn their respect before you can expect loyalty.
Loyalty is a two-way street! Of course, every business would love to have customers loyal to them, but you must give loyalty if you want to receive it. When you’re loyal to your customers you’ll be rewarded with their repeat business. It’s these customers who will purchase your products whether they’re on sale, or not, and they’ll recommend your business to their family and friends.
How do you measure customer loyalty?
Customer loyalty can be measured by how often your customers do repeat business with you. While different industries have different ways of measuring customer loyalty, perhaps the easiest way is to check your database for the number of purchases over a customer’s lifetime. Whether these purchases are large or small, you’ll probably find that over time the revenue from these purchases will surpass revenue from big one-time shoppers. It stands to reason that satisfied customers will spend more money, more often. However, perhaps the greatest bonuses of customer loyalty are word-of-mouth referrals and positive online reviews.
Businesses have to devote real effort and energy in maintaining a loyal customer base, because offering a great service or product today is simply not going to be sufficient to encourage customers to stay loyal.
Most businesses will admit that it’s not easy getting new customers, but it should be much easier to keep them. However, in today’s fierce marketplace the competition for customers can become very aggressive, particularly on price. This means that businesses have to step up – they have to devote real effort and energy in maintaining a loyal customer base, because offering a great service or product today is simply not going to be sufficient to encourage customers to stay loyal.
The kid next door with the lemonade stand
So, what has a lemonade stand got to do with customer loyalty? I’m sure many of you as children either ran your own lemonade stand or you saw the kid next door peddling lemonade to raise money for their local sports club. You, or this little kid, were entrepreneurs. And whether the lemonade itself was great, or not, most people would stop and buy some lemonade because it made them feel good to help the child in his endeavors. So, in short, you became a loyal customer.
How do we help our customers achieve the value they need and feel those warm fuzzy feelings to ensure they keep patronizing your business over and over again? The answer is – dopamine!
So how do you build customer loyalty? How do we help our customers achieve the value they need and feel those warm fuzzy feelings to ensure they keep patronizing your business over and over again? The answer is – dopamine!
What does dopamine have to do with customer loyalty?
You may have heard Dopamine described as the pleasure chemical of the brain. In fact, Dopamine is a hormone that controls a large portion of our brain activity. For example, if you started to smile, it means that your memory activated a Dopamine rush in your brain. When released, Dopamine is responsible for providing that high feeling known as euphoria. Known as a transmitter, Dopamine transmits signals between the neurons (nerve cells) of the brain.
Dopamine is responsible for providing that high feeling known as euphoria.
So, going back to our lemonade stand, that fuzzy feeling you felt when you repeatedly patronized the lemonade stand (or another business) is an example of a dopamine experience. And, a dopamine experience is the core principle of customer loyalty. Basically, you’re being rewarded by your brain for carrying out an activity that makes you feel good, and just as the young lemonade entrepreneur set you up for a pleasant experience so too should you prepare your customers for a dopamine experience. Each and every interaction your customer has with you and your business should create such a pleasant feeling that they want to become your loyal customer.
Your aim should be to ensure that these dopamine releases start the first time a potential customer is introduced to you and your brand. This might be by way of a customer referral, attending a networking event, or visiting your website. Every single experience is a critical element in growing customer loyalty, and these experiences form the basis for a long and trusting relationship based on mutual advocacy.
Right from the onset, customer service teams and sales personnel should be tasked with developing a nurturing relationship with all customers. The three core values of developing loyal customers are –
- Mutual advocacy
It seems our little lemonade-selling entrepreneur set a great example of modeling these three values!
1. Mutual Advocacy
As a business owner, your ultimate aim should be to make your customer your advocate, so it’s up to you to develop the relationship around a culture of advocacy. This culture of mutual advocacy must be incorporated at the very beginning. It’s never too early for expectations for mutual advocacy to be set, so start by modeling advocacy during the sales cycle. As your relationship develops and you begin to understand a prospect’s business model, you may be able to refer them to businesses who you know could well benefit from their solution. Would it be appropriate to make an introduction? Alternatively, you may have some ideas about brand promotion? And, when you start working with them as a customer, you can demonstrate advocacy by quickly addressing their feedback.
This culture of mutual advocacy must be incorporated at the very beginning. It’s never too early for expectations for mutual advocacy to be set, so start by modeling advocacy during the sales cycle
Going back to our young lemonade-selling entrepreneur, his neighbors are more likely to show loyalty if their own child’s Girl Scout cookies were also being promoted at the stand. Our lemonade seller is now advocating for his young friend’s business, which sets the tone and perhaps expectation that his Girl Scout neighbor would do exactly the same, and thus continue purchasing his lemonade.
2. All Good Relationships Are Based on Integrity
Integrity must be the basis of your entire relationship; not that integrity is something you can see but one can certainly see the manifestation of integrity. Integrity stems from your beliefs and core values; it’s when your actions align with your principles.
Working in sales without integrity means you won’t be able to promote customer loyalty, because there will always be that disconnect. By the same token, if your company’s policies are sneaky, restrictive, or lacking integrity, it stands to reason that your customers will move away from your business and towards your competitors – businesses that do offer honesty and integrity.
Integrity stems from your beliefs and core values; it’s when your actions align with your principles.
Going back to our young lemonade-selling entrepreneur, you wouldn’t show loyalty to a child who added salt to his lemonade instead of sugar or who diluted his lemonade with water, because that shows a lack of integrity. All good and lasting relationships require integrity, and without it your customers will fail to form the bond that loyalty demands.
3. Setting Expectations
Certain expectations are required of any relationship, whether it be business or personal, and in business the expectation is the provision of products or services in exchange for payment. And, if your end goal is advocacy, these expectations should be framed during the sales process. For example, a negotiation and proposal might include the services, products, support, and-so-on that you will provide. Likewise, this is the time for you to state your own expectations; that you will deliver on your promises and, besides paying your invoice, your customer will become your advocate by making referrals, participating in case studies, providing testimonials for your website, and so on. This is assuming, of course, that your relationship has been built on mutual advocacy. It’s also important you understand that setting this expectation is a right you must earn, and this can only be done after your prospect has confirmed that you are indeed their preferred vendor.
Your co-workers on the customer service team will also be helped by expectation setting. If these expectations are candidly framed by the sales team during the sales process it certainly makes it much easier to ask for them later on.
Customer loyalty is the ultimate reward!
Customer loyalty is a two-way street! You can’t expect customers to be loyal to you if you offer them nothing in return. Cultivating loyal customers who love doing business with you and who are happy to advocate on your behalf means garnering their loyalty from the first moment they encounter you and your business. Your customer service team must be trained and well versed in these strategies, with their goal always being to continue cultivating loyalty.
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