Why customer loyalty is the key to success
Customer loyalty can be a great added value for companies
Customer loyalty is the long-term key to business success, because satisfied customers not only tend to buy services and products again, but also to recommend the company to others. Recommendation is ultimately another important consequence that restarts the cycle of satisfied customers. Modern CRM systems can help with complex data collection and can be ideally coupled with components of satisfaction recording. Keeping the customer satisfied is more important than ever and has positive side effects.
Customer loyalty is an essential part of any customer-centric business (10 trends in customer expectations). In the age of the mobile Internet, competing providers are moving ever closer together. Territories that were once defined and their clear boundaries are now obsolete. People now use the World Wide Web as a matter of course to select the best provider for their needs.
Only a few companies can afford a policy of low prices in the long term. Moreover, attracting new customers involves a great deal of effort and expense. A far more efficient measure is to align products precisely with customer needs. Finding these out, managing them and serving them in a targeted manner is what CRM (Customer Relationship Management) is all about.
The king is dead, long live the king
The great power of the customer in the figurative sense as king with ultimate decision-making power is increasing massively with the appearance of countless competitors via online commerce. New communication channels favored the transformation from an old to a new type of customer. Since then, transparency and fast-moving markets have been the hallmarks of the market. At the same time, this situation offers new options for differentiating oneself from competitors. Customer orientation has long been independent of location or time of day.
Accessibility thanks to mobile devices via online stores, advertising banners, promotions, videos or emails is now a given for the majority of people. The quantitative oversaturation automatically creates new hurdles. In the face of an unmanageable jungle of choices, offers often seem unappealing and pale.
The constant willingness to change also turns consumers into homeless nomads. The solution to this modern phenomenon lies in long-term acquisition through emotional attachment to the company. A clear message against colorless appearances and interchangeable offers is the appropriate tool to gain the favor of the king over a long period of time.
Screw centers cost factor, added value and service
Consumers as mature, self-confident individuals regularly question offers and put them to the test. Although an attractive price still plays a role, it is not necessarily a knockout criterion and is more a question of individual product placement in a saturated market. The individually oriented package and the associated value proposition makes it possible to intensify contact with the buying public.
Secondary features such as a well thought-out and open-minded customer service and supplementary additional offers also fall into this category. A sophisticated combination alone makes the advertised product or service appear more coherent and automatically attracts more attention. Feelings always dominate people’s selection behavior. A targeted enhancement of the customer experience leads to a more positive perception towards the company. At the same time, this protects against negative impressions in the event of a misunderstanding or other conflicts.
In fact, missteps even offer the chance to draw people even more to one’s own side. Dissatisfaction and complications occur all the time and are an inseparable part of everyday business life. Confident, accommodating and, above all, prompt action earn additional plus points in an emergency. The resulting image boost additionally cements trust in the brand and its offering. A higher level of identification with the company increases the likelihood of retaining customers in the long term.
Personal contact and satisfaction promote popularity
A high level of satisfaction can set in motion a veritable landslide. At recurring intervals, customers view the range of services, buy more goods and generate positive word of mouth among their immediate circle of acquaintances. This extends to a considerable number of potential buyers thanks to social networks and video portals. Although portals already exist that carry out their own assessments of services or products, they cannot match the quality of personal experiences.
Recommendations from the trusted environment of friends and family are still considered an indispensable method for winning customers. When in doubt about contradictory statements, these serve as the most credible reference.
Acceptance of unbiased advice without economic self-interest is generally always easier. This process is promoted by an adapted communication philosophy. People as consumers are no longer regarded as herd animals, but expect individually tailored advertising and service oriented to their needs.
Companies only stand out from the crowd if they exceed common expectations and thus create a unique selling proposition. This involves meticulously collecting customer data by means of direct surveys, feedback and by studying buying and movement patterns on an online platform. The information allows an optimal approach at the point of sale as well as a sustainable support of existing customers. In the best case, people feel positively confirmed in their purchase decision.
Worthwhile effort with far-reaching consequences
Admittedly, the effort required to achieve optimum customer loyalty initially appears enormous and thus also questionable to a certain extent. After all, service and interaction with customers are integrated as equally important components in the actual product offered. But in view of a solid base of buyers, the effort invested quickly pays off and provides a solid foothold in a highly competitive market.
Loyal customers stay with their chosen provider for longer than average. Satisfaction as a psychological link rarely makes them leave for competitors. Increased visitor frequency and full shopping baskets are the reward for the measures taken. In addition, fundamentally well-meaning personalities make it enormously easier to get them excited about new products.
The human being as a creature of habit also usually shrinks from turning away from cherished conditions. Reduced sensitivity to prices gives companies greater freedom to optimize profits. A loyal number of existing customers stabilizes the competitive struggle and removes the unpredictable element of changing providers due to the smallest market fluctuations.
This is also characterized by a greatly increased tolerance for mistakes and their correction. A good relationship with the consumer generally ensures better handling of complaints and claims. This saves costs in the long term and makes new resources available for other tasks.
Satisfied regular customers are also conspicuous for their high payment morale. They tend to always pay their bills on time and are very rarely in arrears. This reduces the likelihood of fraud or non-payment. Subsequent processing for outstanding receivables and reminders is easier and clearer.
All in all, this ensures a stable and predictable flow of revenue and benefits the company’s liquidity. Official and private referrals provide access to a larger pool of new customers. In the case of a particularly good reputation, regular customers even perform intensive persuasion work and can thus land even undecided persons as future prospects. In technical jargon, such regular customers are called promoters. In the calculation of the Net Promoter Score, they have a significantly higher probability of being recommended to others.
An established buyer community also reduces the financial outlay for advertising. If a recommendation leads to contact with new customers, they usually have a very open attitude toward the portfolio on offer.
Incidentally, the best suggestions and proposals often come directly from the consumers’ environment. This invaluable feedback is used to expand and improve existing services and can even serve as the initial spark for completely new products or strategies.
Digital customer analysis with CRM software
Given the abundance of data about each individual, doubts about the feasibility of customer analysis quickly arise. Today, suitable software for customer relationship management is considered an indispensable vicarious agent. The primary reason for this is the shift in distribution channels towards online commerce with strategies such as multi- and omnichannel.
A presence in the form of a web store is now considered a common standard in many corporate divisions. Digital shopping malls and virtual stores make it possible to follow the path of each individual customer down to the smallest detail. This procedure is handled completely automatically and the result is cataloged accordingly.
Statistics serve as a barometer of the customers’ mood and quickly reveal changes in their behavior. A CRM system thus provides companies with a high degree of security, as it can react promptly to critical situations thanks to rapid and regular analysis. The larger a company is, the more worthwhile it is to use the software.
But small companies also benefit from the digital support in customer acquisition. However, integration into the company network is associated with setup and maintenance costs. Permanent maintenance and backup of the databases require the presence of specialist personnel. In return, fast access to all relevant customer information in a central location is considered secure.
Ultimately, this paves the way for efficient customer management and enables customer loyalty to the company’s own brand to be intensified. Addresses, purchase history and possible areas of interest are available on demand at any time. In addition, any loss of sales can be better predicted by means of calculated forecasts. Particularly in the event of an emerging trend reversal, this proves to be a valuable advantage in the search for new concepts.