Customer Loyalty and Retention – Ten Ways They Help Your Business Financially
If your focus is more so on getting new customers than developing the ones you've got, you're not alone. When I first started, it was all about getting A customer. Then I just kept repeating that process because it worked. Perhaps you did the same. But some time back one of my mentors said “Stop cooking the golden goose for a single meal. Take it home, treat it well, and get the eggs!” If you need more convincing as to why you shouldn't cook the goose, here's ten ways your business benefits from developing more than superficial relationships with your customers to get the real gold.
1. Reduced Marketing, Advertising, and Acquisition Costs – when you are actively keeping your happy customers coming back, you’re not so stressed about spending a lot of your budget on bringing in brand new customers. Besides, once you have a long-term customer, you don’t have to spend any additional money to get them because you already have them.
2. Reduced Customer Turnover Expenses – losing customers costs you money because you have to bring in new ones to replace them. When you constantly make your customers feel satisfied, they stay. This, in turn, leads to fewer customers you have to replace over time.
3. Increased Overall Loyalty Equals More Profits – studies show that loyal customers can help you boost your profits by about 25 percent. So, this means automatic sales growth for your company, which is always good. If you can manage to keep a bulk of your customers with you, you can expect to see some nice returns.
4. Increased Up-selling and Cross-selling – when your customers stick with you, they tend to spend more money with you as time progresses; creating a stronger cash flow. Whether it’s brand new products and services that you offer… or existing, long-term products and services, a loyal customer is likely to try it out if they’re happy.
5. Increase in Referrals – your satisfied, loyal customers will refer anyone who needs your product or service to you – without any additional effort on your part. You can look at it as free advertising. When your loyal customers start to refer others to you, your profits naturally go up even more.
6. Boost in Brand Recognition and Awareness – when your customer-base grows bigger and stronger, your company’s brand naturally becomes more recognizable as more people talk about you.
7. Fewer Adjustments Needed – if you have built a network of loyal customers who love the way you do things, you won’t have to implement a lot of changes trying to cater to new customers. In time, you’ll be able to familiarize yourself with the demands and needs of your loyal customers… allowing you to focus on satisfying their needs.
8. Less Time Spent Creating New Relationships – yes, getting new customers is important in your business. However, it takes a lot less time, money, and effort to keep your existing customers satisfied than it does to woo new customers.
9. Existing, Long-term Customers are More Forgiving – every company makes a mistake every now and then. It’s how your customers react to the mistake that can cause problems. While your newer customers may be quick to make negative remarks about your company in the case of a mistake, your long-term loyal customers are more forgiving since they “know” you. This negativity can impact your ability to get new customers.
10. More Feedback and Suggestions – your loyal customers can offer great feedback or suggestions for your business since they understand your company operations and processes. Ultimately, they can help you enhance your products or services, which will lead to more sales.
In a nutshell, customer loyalty is a real emotional attachment between your customers to your brand. This happens when your customers appreciate everything about your business; as a result, they choose to keep doing business with you… which leads to more sales, profits, referrals, and return on investment (ROI).
If you haven't yet, see how I get businesses more customers returning to buy on demand. It's the bonus video you see just after signing up for my Top 10 Small Business Marketing Mistakes video series.
Rob Calhoun
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