While getting new customers is a crucial part of building a business, it’s just as important (if not more so) to keep those customers coming back again and again.
The reality is that for many SMBs, customers with brand loyalty are the most valuable when it comes to driving growth. For example, research from Atfield finds that the probability of selling to an existing customer is between 60 to 70 percent. Meanwhile, the same study finds the likelihood of selling to a new customer sitting at merely 5 to 20 percent.
These brand loyal customers drive a significant portion of overall business for an SMB. According to the Pareto Principle, 80 percent of a business’s profits come from just 20 percent of existing customers. On top of that, existing customers are more cost-effective to maintain versus marketing to new customers and help ensure a constant, steady stream of business.
However, building brand loyalty is often easier said than done, especially in today’s digital world. Customers are constantly flooded with options. Factors like a strong product that fulfills a customer’s need are given requirements. Brand loyalty can also be fostered by having strong relationships, customer incentives, and even a brand that resonates.
Here are three places a business leader can start:
Engage with customers — Purchasing from a business often comes down to more than the product. Relationships can also determine it. Engaging with customers to ensure a positive experience is a great place to start. Building these relationships, followed by interactions across digital and social platforms, ensures you stay top of mind. Of course, simple things like a “thank you for your business” or “Happy Birthday” also go a long way towards building customer trust and loyalty.
Brand consistency — To ensure customers remain brand loyal, it often helps to give them a clear idea of what exactly they are being loyal to in the first place. Make it clear what your business’s mission and core values are and reinforce that with consistent branding, messaging, and media. That way, when a customer thinks of your industry or business type, they automatically think of you.
Reward customers for returning — When customers benefit you by returning to your business, you should pay back the favor. This can come in many different forms. Some companies, for instance, offer a rewards program that gives customers gifts or points for returning again and again. Others also offer incentives for business referrals, which rewards customers for returning and for recommending a friend.
While building brand loyalty is more of an art than a science, building your brand with intention will go a long way towards ensuring a strong customer base over time. Ultimately, that will lead to long-term business growth.