Building customer loyalty
Cecelia Haddad explains how to gain customer loyalty, and then maintain it once it has been earned.
What is customer loyalty? Officially, loyalty is “a strong feeling of support or allegiance”. In business it means more than that (or we would like it to) and we hope that the loyal ‘feeling’ transcends to behaviour. As a supplier you would welcome loyalty for several reasons – it leads to repeat business, it saves you the time by avoiding having to find new customers to fill the gap and it usually means that a customer will refer you to others. I’m sure many businesses are proud to say they have loyal customers and you want that to continue, right?
However, if I can throw a spanner in the works (excuse the pun), as a business you may just need to look more carefully at what is motivating your customers to be loyal.
You may think it’s the great service you provide, the relationship you have with that customer or your effective marketing campaign but there are other reasons that make customers consistently choose you and some of them aren’t about being loyal. It may be that it is going to take too much time and resources for your customers to change suppliers. It may be that you just offer the lowest price. Or it could be that the customer has a great rapport with one of your employees (but not you or your company).
These other reasons mean that your ‘loyal’ relationship with your customer can at any time be in jeopardy. Another supplier may offer something better and provide an easy way for you to switch suppliers (this is very common in the insurance and energy industries, to name a few). If it’s low price and a supplier undercuts you, then you have lost that customer. Or what if that favoured employee leaves? The customer may go with them to their next role.
Why am I telling you all this? To reinforce that while you may have loyal customers you cannot afford to rest on your laurels. Below are some tips on how to gain and maintain a loyal customer base and I hope you find them helpful.
GAINING A LOYAL CUSTOMER
Tip 1: Provide amazing customer service
Not average, not expected, but beyond expectations. Go the extra mile, do something different, be memorable. I recall hiring a tradie who completely cleaned up the area he worked in after he finished the job. My experience has shown that doesn’t happen often.
Tip 2: Be knowledgeable
Know what is happening in the industry, what clients are looking for, keep up-to-date with market trends, what is popular now and anticipate your customers’ needs.
Tip 3: Education and awareness
Marketing is essential to anyone in business, whether you are a one-home-a-year builder or a major developer. If customers aren’t aware of what you do, especially what you do better than others, then how are they expected to choose your company? Don’t be afraid to promote your successes or explain new ideas. Added value advice is a big driver in not only demonstrating that you know your stuff but engaging people with your business.
Tip 4: Communicate
And I mean really communicate. Listen and respond. Understand what the customer wants, don’t just give them an off the shelf solution. Take the time to understand their dynamics – family, retirement, is this their first or second home, what have they liked or not liked about previous homes they have lived in and so on. Then come up with a solution that really meets their needs.
MAINTAINING A LOYAL CUSTOMER
Tip 1: Build loyal employees
How? By training and upskilling them, giving them a real insight into your business and industry and rewarding them appropriately.
Tip 2: Prioritise customer retention
Don’t do the dump and run and wash your hands after the deposit has been taken or the job has been completed. Continue to find ways to engage with that customer. Make contact via a courtesy call one month after a job is complete and check that everything is ok.
Tip 3: Make wrongs right
If you do something wrong, admit it and fix it – and fast. There is no quality more redeeming than someone who admits they are wrong and takes steps to fix things.
Tip 4: Rewards go far
If a customer has been referred to you, find out who made the referral and send them a bottle of champagne, a slab or beer or something to say thank you. They won’t be expecting it so it has even more impact.
Tip 5: Remember my name
It may be impossible to try to remember everyone you meet or information about them but it’s easy to do if you keep some simple records of your customers. For example, do they have children, a dog, birthdays or anniversaries?
There was a great restaurant in Sydney I used to go to that was booked out eight months in advance. We used to make a booking while we were there for the next time and so on. Although we only went there every eight months, the owner used to greet us by name and ask about our family or work or recall something we spoke about last time we were there. I was always amazed that she remembered (or took the time to make a note for our next visit). I also meet a friend of mine at the same coffee shop once every eight weeks. When we arrive, the waitress always says, “would you like the usual?” they must get 50 customers a day yet they remember us and our order. Impressive!
The best thing about gaining and maintaining customer loyalty is that it doesn’t take much time or effort but it does need to be a conscious decision and action – and it’s worth it.