Danger! Do You Unconsciously Sabotage Customer Loyalty?

Businesses thrive on repeat customers.

Loyal customers often spell the difference between a strong business and a struggling one.

That lady who comes around every Tuesday. The family that does all their Christmas shopping in your store each year. Even your neighbor who asks about in-app promos every time you bump into each other.

You know this. Most business owners know this. Loyal customers pump revenue into businesses.

I’ll let the numbers speak:

A repeat customer spends 67% more than a new one.

82% of small business owners said that loyal customers were the main way they grow business.

A repeat customer has a  60% – 70% chance of converting for each visit.

For this reason, customer loyalty programs are popular among entrepreneurs. Huge name brands are also known for pouring a lot of resources into customer loyalty programs.

Coffeeshops, department stores, even doctor’s clinics reward customers for coming in consistently.

It can only be good, right? Rewarding customers for continuously coming in seems to be a foolproof plan.

Well, like many business-related practices, customer loyalty is not easily acquired through plug-and-play solutions.

If you’re not retaining customers as much as you’d like, and you’ve already made numerous tweaks to your products and the way you sell, it’s very probable that you’re doing something wrong.

Let me tell you about these mistakes you could be making that’s hurting your ability to get the loyalty of your customers.

You don’t know who your loyal customers are

Do you? I’m not talking about knowing all their names. Nor am I talking about having one all-encompassing profile that box in all your loyal customers. Of course, It’s impossible to fit all your loyal customers in one profile. They come to you for different reasons.

Maybe they come because you’re the most affordable. Or, maybe they grew up doing business with you.

I still go to my favorite ice cream shop even when there’s a million other ice cream, frozen yogurt and gelato shops in my community. I’ve tried the others, but I still come back to one shop. It’s not just about taste too. If you ask me why I come there, I can’t really tell why. And I’m sure the other folks I regularly see there can’t tell either.

No matter how difficult it is to uncover buying patterns, you still have the responsibility to understand your most loyal customers. It’s the only way to ensure your relationship with loyal customers is nurtured. This way, they continue coming back as you continually improve their experience each time.

If you’re not keeping track of your customersespecially those who give loyalty to your business, you could be ignoring their wants and needs, and are reaching out to loyal customers the wrong way. You are throwing money to the wind by not maximizing your relationships with these loyal customers—not only to get them to spend more, but by not capturing and using data to find more customers like them. You could be ignoring their wants and needs, and are reaching out to loyal customers the wrong way.

When I ask you who your loyal customers are and all you can give are names and vague descriptions, you have to move fast. Check out the remedy.

Create Customer Personas

Can you really afford not to maximize the relationships you have with your loyal customers?

Customer personas guide you in approaching, engaging and marketing to your loyal customers. And since your loyal customer personas also represent your ideal customers, you will be able to market to a bigger audience and funnel in those who could potentially join your pool of repeat customers.

What makes a loyal customer?

  • Identify the variables that define your loyal customers (spending habits, referrals, longevity), then start tracking important data. What are their shared traits? Who can be grouped with each other?
  • Dig up your current database to help you identify loyal customers as precise as possible.
  • Capture and keep as much customer data as you can.
  • Analyze your data. Answer these questions:
    • How do loyal customers find us?
    • How do they respond to certain marketing campaigns?
    • What do loyal customers buy?
    • What is the typical spend of a loyal customer for each persona?
    • What approaches go unnoticed?

What do you do with this information?

You know how valuable loyalty is to businesses, right? I’ve outlined the numbers for you in the beginning of this post.

Now, you use this information to find out how to interact, reach out and form relationships with your best customers. Use this information to personalize and laser-target your engagement to your ideal customers. Do rewards and loyalty programs work for them? What makes them come back more often? What makes them buy more? How do you make them bring in their friends?

Having a sturdy customer base that continually expands itself is the closest thing to having a perfectly predictable business model.


Discounts as your customer retention strategy

Discounts may work to get more feet in the door—but do they stay?

No doubt, customers love getting discounts, promos, freebies, BOGOs—all of it! But, do they still love you without it? You and I know the answer to that. If you love giving out discounts to get your customers to stay, you know what goes on behind customers’ closed doors, right?

“I love that business, but I’m still waiting for the next sale before I stop by!”

It’s nearly impossible to find a person who doesn’t like discounts. I do, too! But the reason I buy is not solely the coupon. I had a need (or a want). If I am familiar with the company, and I had a good previous experience, a coupon may push me to make another purchase. Discounts do not guarantee a sale.

If you’re using discounts to get more people in the door, it could work. But are discounts a good way to keep people interested?

A classic market research essay published on Harvard Business Review entitled Why Satisfied Customers Defect can help us describe customers who are pulled in by discounts:

Clearly, mercenaries are not the customers you want to be attracting.

Provide a positive customer experience

Customers stay as a result of a positive experience.

It may be that nice lady who assisted them in choosing new socks or that helpful store rep who took their call. It can be how easy they find what they need when they enter your store. Or having an app that lets them book, shop or pre-order from their phones.

Instead of hinging your client retention strategy on compromising your bottom line through discounts, develop a positive customer experience as part of your customer retention strategy.

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Improving customer experience for your business shouldn’t be a tall order. It begins with seeing things from your the perspective of a customer.

How do you make their buying experience more pleasant?

Even more, how do you make their lives better?

How does engaging with your business improve their lives?

Improving customer experience doesn’t really have to be an overhaul. It doesn’t have to take you a lot of money to execute a customer retention strategy that has improved customer experience at the heart of it.

Customer service company HelpScout once wrote about small, inexpensive things a business can do that improve customer experience. They called it Frugal Wow—the creation, practice, and implementation of small gestures that create lasting loyalty.

Through your business’s support team, you can execute these gestures and bring a better overall experience to your clientele.

  1. Do something that your customers would think you’d never do, like speeding up an order, or including an upgraded after-sales service for their purchases.
  2. Pick a particular step in the journey of your customer and optimize that. Do a little-something-extra. Go above and beyond. For that small step.
  3. Turn a meh into a wow!, spontaneously. HelpScout used this viral email from Zappos as an example:

These small “wows” are remarkable from the perspective of the customer. If done well, they can boost customer retention and can transform your current clientele as your best customer acquisition evangelists.

One thing to remember, no matter how many times you’ve pleased a customer, they will remember negative experiences.

If you have over-delivered ten times, then underdelivered once, guess which they’d remember? Guess which one they’ll be posting on Facebook and telling their friends about?

Sure, they might give you another chance. But there will always be another business wanting them as customers and are ready to sweep them off their feet.

Refusing to embrace technology

Everybody loves the neighborhood mom n’ pop cafe ran by that endearing elderly couple.

They make the best food, they provide the most authentic experience. You hear them complaining about kids these days, and it’s part of the charm. They pride the business for being the neighborhood hash house where people talked for hours about what’s hot in the neighborhood.

However, as time passed by, they were considered more of a special destination than a neighborhood joint. Repeat customers started to wane, and revenue became seasonal.

Mom and pop, unfortunately, refused to do any updating, especially technology wise.

In today’s business climate, it is imperative for businesses to be connected to the internet.

If yours is one of the businesses that refuse to update with the times, your authenticity will soon mean nothing as you run out of customers.

(You guessed it) Embrace technology

Retaining customers today means leveraging technology to make things snappier, easier and more personalized.

The sense of community doesn’t only exist on the ground. If you’re not on social media, you’re off the radar of most consumers, of your customers.

If you’re not on social media, you’re off the radar of most consumers, of your customers. If you’re not using social media and email to address customer concerns, you’re doing customers a disservice.

But of course, retaining customers is always about going above and beyond.

Wi-Fi for your brick and mortar store

Many businesses still believe that in-store wifi doesn’t pay for itself, but with the reality of today’s market, that’s just not true.

Wireless internet in-store allows you to:

  1. Embrace new technologies to improve business operations and revenue.
  2. Offer a Wi-Fi experience to customers.
  3. Engage with your customers.

Mobile app

Mobile apps for businesses are not as difficult to build as before, what with drag and drop solutions like the app builder here at BuildFire.

An article in this blog entitled How Small Businesses Can Benefit from Mobile Apps outlined the benefits:

Responsive website

Responsive websites are websites that can be viewed on mobile as well. It’s best for your company to have as many channels available when customers want to find you and connect with your business. Make your website as accessible as possible, and make it an extension of your business. Update it with content that’s relevant to your customer base. Consider it a part of your general customer service strategy.

What are the ways you keep your customers happy? Do you have a go-to strategy for customer retention?
Let us know in the comments below!

Ian Blair :BuildFire Co-Founder. I'm a digital marketer by trade and an entrepreneur at heart. I'm here to help businesses go mobile and build apps more efficiently than before.