How important is customer loyalty to your bottom line?

Last Updated: August 2020

Consider that repeat customers spend nearly 70 percent more than first time customers. In addition, studies show that it can cost as much as five times as much to win a new customer as it does to retain the ones you already have.

Loyal customers build your brand by word-of-mouth recommendations, spend more on your products, and come back more often. Here are six strategies to turn casual customers into loyal ones.

Build Personal Connections with Your Customers

Today’s consumers have lots of options when they want to make a purchase; businesses that make the effort to establish a personal connection with their customers have an advantage. Set up a database or customer relationship management system that tracks information such as email addresses, birthdays, anniversaries, and most frequent purchases, for example. Use this information to send personalized messages to your customers. Send a special discount code with a birthday greeting or an email when a favorite product goes on sale. While automated phone systems may save time and money, personal attention from a live customer service rep builds loyalty.

Offer Creative Payment Options

Customers will spend more when they are given the opportunity to spread the payments over a period of months. They also appreciate merchants who make it easy for them to make larger purchases. Consider offering repeat customers a payment plan for purchases over a certain dollar amount. One wedding services provider, for example, developed a plan that allowed couples to spread the cost of their wedding over a 12-month period. They found that the amount each couple spent on their wedding increased significantly, they earned more referrals from satisfied clients, monthly cash flow improved, and total sales increased nearly 400 percent. Letting repeat customers buy the things they want on terms they can afford encourages loyalty.

Give Your Best Customers Special Perks

Perks are one of the least expensive and most effective tactics to build customer loyalty. Whether it’s access to VIP sales events, special seating for club members, invitations to preview new products, or a loyalty points program, perks bring customers back again and again. For small business owners especially, customer perks do double duty: They encourage loyal customers to keep coming back, and they act as an incentive for casual customers to achieve loyal customer status in order to receive the perks.

Use Brand Ambassadors

Let your most loyal customers be ambassadors for your business by empowering them to act on your behalf. Give loyal customers coupons for special discounts or offers they can give to their family, friends, and associates. Send them invitations to a special experience or event they can pass out to others. Give your best customers a benefit they can share when they bring along a group of friends – everyone loves to treat his or her friends, especially when the treat is free. Your best customers will appreciate their improved status and will go out of their way to bring new customers to your door.

Teach Your Employees to Give Excellent Service

According to a recent study, poor customer service was the reason that 71 percent of individuals ended their relationship with a business. The economic cost to those businesses was a whopping $83 billion dollars, equal to about $300 in lost sales per customer over the course of a year. Make sure that a commitment to excellent customer service is communicated to all members of your team and that clear policies exist for handling customer complaints. Anticipate needs, respond promptly to comments and concerns, give customers a way to provide feedback, and be available to answer your customers’ questions.

Make Technology Work for You

Social media is a boom for small businesses who want to build customer loyalty. It’s an inexpensive medium to connect with customers, share information about your products and services, respond to comments and concerns, build a sense of community, and increase brand awareness. Find creative ways to reward customers who promote your business on social media. Remember, however, that a social media presence can backfire if it isn’t managed properly. Make sure you respond quickly to every comment or complaint and don’t use social media as just another way to sell your product.

While you’re keeping customers connected and plugged in to your business, the customer experience at the checkout counter is important as well. Using simple and intuitive POS software like ShopKeep, on simple and intuitive tablets, makes purchasing fast and painless, unlike older, less streamlined and clunkier POS systems from years past. The less time your employees has to deal with slow and difficult to use POS systems, the more face to face time they have with the customer, building a bond, and creating more customer loyalty.

For small business owners, investing in customer loyalty is a surefire way to boost profits and grow your business. By creating personal connections, offering perks, properly training employees, and maintaining a social media presence, you can turn a one-time customer into repeat business.

JT Ritpon

JT Ripton

JT Ripton is a business consultant and freelance business and marketing writer out of Tampa. For additional business advice, you can follow him on Twitter @JTRipton .