We’re all familiar with the concept, but what does customer loyalty really mean?
Is it really enough to just dish out loads of stamp cards and hope customers come back? As we covered in “6 reasons your business needs mobile loyalty”, successful business owners needs to ensure they offer great product, service and staff from a convenient location. But to generate true customer loyalty you must aim for customer delight.
Why customer loyalty is so important for your small businesses
Pareto’s Principle states that 20% of your customers, “the loyal ones”, will account for 80% of your business’s revenues.
According to Deloitte, businesses that take meaningful steps to drive customer loyalty are 88% more profitable than their competitors who do not. A recent Manta and BIA/Kelsey report stated that repeat customers spend 67% more on a given purchase than a new one.
In fact your loyal customers will spend on average 10x more over their lifetime. Because they know your business, the probability of making an additional sale - or up selling - to a loyal customer can be 60-70% higher.
When you also consider the huge expense of acquiring a new customer, where the likelihood of them buying at all is nearer 5-20%, hanging on to loyal customers starts to make real sense, right?!
By providing loyalty incentives for customers, small-business owners are not just saying thank you. The right incentives can also go some way to turn customers into champions of your brand.
The point is that a repeat customer gives and gives. Having a way to reward them can help you increase repeat customers and, in turn, boost your business’s revenue.
As we’ve covered in our brief history of customer loyalty, loyalty and rewards programs are everywhere on today’s high street. But they’re evolving, and for good reason.
Your customers needs are changing
Today’s shoppers expect services, experiences, information, benefits and rewards tailored to their wants, needs and location. In the near future, all of these will need to be delivered via your customers’ channel of choice - in-store, web, mobile - anywhere and anytime. Businesses who fail to deliver on these expectations will be left behind.
Some customers will prefer generous point-based or ‘hard’ benefit-based programs with discounts, offers, and incremental value are the reward.
Others will prefer “soft” program benefits such as complimentary gift wrapping, preview event invites, complimentary upgrades, and so on.
With almost 38 million smartphone users in the UK glued to their screens, the demand for a seamless and intuitive retail experience involving mobile is now reaching tipping point.
Our own research shows that the majority of customers, certainly those below a certain age, prefer using a mobile loyalty app to having another card in their pockets. As the mobile payments revolution gathers pace, there’s only so long retailers can stick with plastic/paper.
Our vision: a world of customer delight
Imagine a world where small and independent businesses can encourage lapsed customers to come back in store. Where traders can incentivise customers through ‘soft’ as well as ‘hard’ benefits based on their individual preference. Where traders can build customer loyalty based on something more than just collecting points.
What if you could build genuine 1:1 customer relationships by getting to know your customers just a little bit better, across all touch points: in-store; online; social; and mobile?
What if you could collect feedback, and more easily spot and quickly resolve potential disappointments?
What if you could make your customers’ shopping experience – before, during and afterwards - more pleasurable?
Wouldn’t it be great to be able to surprise and delight your customers - not only when they’re in-store, but also when they’re with their friends and family, at home and at work?
What if, by creating a network of delighted fans, they were so full of customer delight they talked to their friends and family about how much they love shopping with you? And what if these efforts to amaze your valued customers also brought you a steady stream of new customers, eager to try your services?
What if you could reward these customers for helping you to grow your business?
This is all possible with ‘Customer Delight’: exceeding their expectations to create a positive emotional reaction, and positive word of mouth.
According to a recent IPSOS poll, a delighted customer is FIVE TIMES more likely to plan on shopping with you again than a merely satisfied customer.
And delight doesn’t stop with your customers. What if you could deliver all of this without having to work in your business 24/7, and without having to personally serve every single customer?
How delighted would that make you feel?