Typing ‘customer loyalty is dead’ into Google returns more than 1.1 million results, some dating back to 2004 and beyond. Many of the articles are written by leading customer service experts.
Over the last decade, this myth has been repeated so often that it has come to be regarded as truth. Particularly as the availability of any product or service means that your customers can switch to a competitor quickly and easily.
"The American Express Customer Service Barometer indicates that consumers are willing to spend between 10% and 23% more for an excellent experience."
It is true that loyalty is harder to earn, but this does not mean the concept is dead. The majority of consumers admit to spending more with a company because of a history of positive customer service experiences. “History” is the key operating word here – people return to businesses who consistently deliver great experiences.
Experience beats low prices
Unless your business is in the enviable position of having a completely unique product or service, you are surrounded by competitors whose offerings are credible alternatives to your own. And the internet has made it even easier for your target market to discover your competitors.
But simply having the lowest prices is unlikely to foster customer loyalty – it will simply attract clients who switch provider regularly based on product cost. Any boost in sales and revenue based on this strategy is likely to be temporary, lasting only until your competitors lower their prices too.
Far more effective (and profitable), is to focus on delivering the best possible experience to customers. The American Express Customer Service Barometer indicates that consumers are willing to spend between 10% and 23% more for an excellent experience – certainly not the actions of a price-oriented shopper.
So, in essence, great experience drives revenue growth and increases customer loyalty.
Sales teams realized many years back that people buy from people they like. So building relationships with customers is a key aspect of increasing loyalty. Key customers are unlikely to leave you for a competitor they don’t know if you have taken the time and effort to cultivate a mutually-rewarding relationship.
Social media has made it easier than ever for your brand to identify and understand customers, their preferences, and their intentions. According to a study published in Ad Week, 63% of people wish brands treated them like a friend instead of a consumer, which means that the vast majority actually want your business to connect with them and to show an interest in them as people, not purely as another revenue stream.
It makes good business sense then to mine that information to help you build stronger relationships with existing customers.
The modern buyer’s journey encompasses a range of on and off-line channels, and your business needs to stay on top of them all. Not only that, but you need to ensure that the experience is consistently excellent for the shopper in your brick-and-mortar store as well as the fan on your company Facebook page.
Responding to questions and complaints in a timely manner is crucial to demonstrating that your business is interested in its community. Somewhat unexpectedly, NM Incite found that 33% of customers would recommend a brand that offered a quick, but ineffective response via social media – double the amount of people who recommended brands based on slow but effective solutions.
Your team needs to be empowered to respond to customer queries via social media to assist customers, however, and whenever, they need. In doing so, you further help to build much-needed customer loyalty.
Listen to what people want
Starting a relationship relies on someone making the first move – and there’s no reason that your business can’t be the one to initiate. Social media listening tools are vital for assessing the marketplace, but you can also use them to identify potential customers – and reach out to previously ‘unknown’ prospects.
Anyone discussing your brand, or products and services similar to your own, makes a clear statement of intent. This means your social team can begin building relationships even before these people become paying customers. Starting the customer service process before the prospect converts is a clear statement of how your business will proceed in future, helping to build trust very early on.
A golden opportunity
So, it should come as no surprise that customers actively choose to shop with suppliers who deliver exceptional services and experiences. What is surprising, though, is that just three-quarters of customers are satisfied with the services they receive.
This means that there is a quarter of the marketplace open to switching brands in return for an improved service; which gives your business a chance to capitalize on their dissatisfaction.
In the age of the online global marketplace, your competitors are never more than a few mouse clicks away. But this is also the age of the socially-connected consumer, making it even easier for your brand to engage them – if you use the available tools and opportunities properly.