The Four Benefits of Customer Loyalty
As discussed on my previous post, Customer Loyalty is key to any successful business. I will discuss how to build loyal customers, by providing Stellar Service, on later posts. But I want to focus on the benefits of customer loyalty.
Loyal customers show feelings of trust and confidence in your company. These feelings inspire customer actions with clear benefits. They resist offers from competitive companies, recommend your business or service to others, and are willing to work with you when they experience a service issue or breakdown. From a business perspective, when you hear a loyal customer complain, they are often simply trying to make your business or service better. Wise companies listen to these complaints to try and improve their business or service.
Here are the Four main benefits of customer loyalty:
- Retention - Customers that continue doing business with your company, provide a solid base for success. If they purchase additional products or services, the payoff is even better.
- Referrals - Customers that encourage others (friends, family or even strangers) to choose your business or service over the competitor’s, save you the cost of attracting new customers. Per my previous post, it costs 5 times more to attract a new customer then to keep an existing one.
- Reputation - Customers that speak well of your company, increase your public support, as well as positive interest from investors, future employees, and the media.
- Revenue - Customers that give your company a larger share of their business, increase both your overall revenue, plus the recognition that comes with success.
These benefits are referred to as the Four R’s: Retention, Referrals, Reputation & Revenue. As you can see, Loyal Customers do provide valuable benefits in helping a business become and remain successful. It is to any company’s benefit to create customer loyalty.
In my next post, I will speak about How to Build Customer Loyalty.
Well said