Whether you’re selling products or services, competition is usually strong in most industries. That’s why you have to differentiate yourself from other suppliers so you stand out. This, in turn, will help you generate more customers. Why is this so essential? Because customer loyalty is the lifeblood of your business. In fact, a Forrest Report recently revealed that 95 percent of businesses were making customer loyalty their number one priority. Here’s how it can better ensure your success.
High Rate of Business Failure
It can cost tens and even hundreds of thousands of dollars to start a business. And if you aren’t generating enough sales to sustain your company, you will fail. In actuality, more than 50 percent of all businesses fail within the first four years. That’s why it’s so important to focus on customer loyalty when starting out. It can generate more revenue and profits.
The primary objective of customer loyalty is to get more people through your doors more often. That’s because loyal customers may spend thousands of dollars per year in your establishment. The same holds true whether you’re selling wares from a store or via b2b ecommerce. It also costs a lot to acquire one customer. Case in point, a book retailer reported spending $10 to acquire a customer, while a large telecom firm dishes out an average of $315 to procure each patron. So, once you win a customer over, it’s important to keep them coming back. Loyalty cards are highly effective in generating repeat business as you reward customers according to what they spend.
You can claim to be the most experienced market researcher or locksmith, but the bragging your loyal customers about you holds more weight. These customers will tell friends, family and even officemates about you. And any business you gain through word of mouth is free and offsets your cost of acquiring customers. Always go out of your way to make your customers happy, whether you provide a money back guarantee or spend twenty minutes answering their questions. Your business will grow exponentially as a result.
Loyalty customers will visit your venue more often and far outspend other patrons each year. The frequency and dollar volume will largely be contingent on the products and services you offer. If you’re a midscale restaurateur, for example, the average loyal customer may frequent your restaurant three or more times per month. And if you run an advertising firm, your best customers may use your services each month or quarter. The dollar volume will be greater in the latter example, which is why the expenditures will be less frequent. Whatever the case, loyal customers will account for a significant amount of your annual sales.
Cross Selling Opportunities
Loyal customers trust that you will sell them high quality products so they will buy other products you sell — even the brand new ones. The key is to acquire customers’ names, addresses or emails so you can apprise them of these new wares as they become available. In fact, you can even place more emphasis on cross selling to current customers and less on acquiring new ones and still generate more revenue.
Best Defense Against Competition
One thing for sure is that your competitors will be watching you, especially when you’re highly successful. They may even try to emulate you by providing similar items, discounts or services. These companies, as well as new entrants into the market, may attract some of your patrons to their offers, but your loyal customers will be more resistant to change. After all, they trust you because you’ve been good to them.
Always focus on developing customer loyalty from the first day you open your business. It will pay huge dividends over time.