5 Ways to Build a Loyal Customer Base

Feb 11, 2020

Getting new customers may seem challenging, but building a loyal customer base has even greater challenges. How can you turn new customers into loyal customers who then become your brand advocates? You may assume that providing excellent customer service is all you need to do. While excellent customer experience is essential, more is required to develop a loyal following.

There are many benefits to keeping existing customers with you. Some estimates say that it can be at least five times more expensive to attract new customers than retain the ones you have. Loyal customers will also tell others about you—yes, free word of mouth marketing.

Having a strategy to develop loyalty among your customers also benefits them. For example, your customers benefit because they don’t always have to look for new companies. Loyal customers are willing to pay for your services just for the convenience.

In this article, you will learn five ways your business can build a loyal customer base. First of all, let’s answer two essential questions: customer loyalty—what is it, and why is it vital to your business?

What is Customer Loyalty?

Customer loyalty is when an existing customer consistently chooses a company’s services or products. This type of customer isn’t swayed by your competitor’s marketing gimmicks or lower prices. They are willing to pay more to get a quality service that they know and can rely on.

Why Do Loyal Customers Matter to Your Business?

Why is it so crucial for your business to retain customers, while at the same time looking for new ones? The answer may be apparent. However, many companies just concentrate on acquiring new customers rather than customer retention.

A well-known metaphor that explains the importance of having a customer loyalty strategy is the leaky bucket theory. Let’s say that your business is a bucket, and you go to great lengths to fill the bucket with water—get new customers. If in time, the bucket develops holes, water is going to start pouring out of it—you are losing customers. So, you have to work harder to fill the bucket just to replace the water—keep revenue stable.

With the metaphor in mind, would it not make more sense to patch the holes rather than just keep filling the leaking bucket? Studies show that increasing customer loyalty by 5% can result in an increase in profits by 25% to 95%.

Reports indicate that even more modest increases in customer retention can positively impact your profits. For example, boosting customer loyalty by a meager 2% is the equivalent of cutting costs by 10%.

How to Build a Loyal Customer Base

How can you focus on developing loyal customers who will keep coming back to your business? Let’s look at five ways you can build customer loyalty—and the good news is, you may already be doing some of these things.

1. Communicate with your customers

Start building loyalty by communicating regularly with your customers—after all, someone has to start somewhere. Communication allows you to pass along important information and stay in their minds.

Use the contact information that you already have to send out holiday greetings, friendly reminders, updates, or free newsletters. The main thing is to go light on promotions and heavy on value to the customer.

Social media is another excellent tool to build loyalty—post to Instagram, Facebook, and other channels regularly. You can share stories about your business, inspiring images, or feature new products. You could also feature some loyal customers—with their permission—on your posts.

2. Have a rewards system for loyal customers

One way to drive customer loyalty is by offering perks to returning customers. A rewards system could be based on collecting points, offering discounts, or other bonuses to dependable clients. Even something as simple as offering something free or reduced on the fifth purchase can be enough to keep customers coming back.

Offering perks doesn’t just encourage customers to use your services; they motivate them to reach the reward’s status.

3. Provide outstanding customer service

Of course, we can’t talk about customer loyalty without talking about the importance of providing exceptional customer service. There is the famous expression, “you should under-promise and over-deliver.” While it’s tempting to make lofty promises, if you don’t—or can’t—deliver, you’ll leave customers disappointed.

reviews loyal customers

According to some reports, businesses that can’t satisfy customers’ needs end up losing customers. And, once lost, it is tough to regain them.

So, if you advertise “100% satisfaction guaranteed,” you need to make sure you have the resources to please every one of your customers.

Remember, when you treat customers well, they are more likely to recommend you to their friends and family. They are also more likely to leave good, honest reviews thanks to your customer service.

4. Use social proof to build customer loyalty

Providing social proof is a great way to encourage loyalty and retain existing customers.

But what exactly is social proof? Social proof is the phenomenon where people act based on how others act or what they say. Here are some examples of social proof that could benefit your business:

  • Reviews and testimonials—One of the best examples is customer reviews. The majority of consumers check out reviews before making a purchase. They are looking for recommendations to help them make purchasing decisions. These reviews also encourage customer loyalty because clients are engaging with your company before they purchase and after.
  • Wisdom of the crowd—This type of social proof is about promoting the number of customers you have. After all, if thousands are already satisfied, that is proof that the product works.
  • Influencers—Using influencers is a great way to build trust with customers. Influencers don’t have to be celebrities. They can be micro-bloggers who already have a following and who are willing to promote your brand. This type of social proof works because you can tap into their loyal following.

5. Ask for their feedback and respond

Encouraging more customers to leave feedback can help you win their loyalty. As already mentioned, reviews are an essential social proof signal to consumers. Of course, getting many reviews help customers in the decision-making process.

feedback reviews starloop

How can reviews promote customer loyalty? The answer lies in how you handle the review process. When to deal with reviews—positive and negative—customers develop a positive brand perception. This perception of trust develops into loyalty.

Here are two ways of how getting more reviews means increased customer loyalty.

  • Transparency—Publishing all reviews—even negative ones—show customers that you are transparent. It shows that you have nothing to hide. With negative reviews, you have an excellent opportunity to address your customer’s concerns. You can even turn a negative review into a superior customer experience if you respond appropriately. Customers are more likely to be loyal to brands that they can trust.
  • Gratefulness—Let’s face it, who doesn’t like to receive some thanks every so often? When customers leave positive reviews, respond with a simple comment to say, “thank you.” This can encourage them to continue doing business with you.

Creating True Customer Loyalty

Building customer loyalty is critical to the success of any business. A loyal customer base can give any small or large company an edge over its competitors. It is not enough only to focus on gaining new customers; you need to work hard to retain the ones you have.

This article also highlighted the need to get customer reviews. At Starloop, we are dedicated to helping our members get more reviews to build their online reputation, increase customer loyalty, and boost revenue.

Contact us today to find out more information and see how Starloop can promote your business success.

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