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Customer loyalty is one of the most important and critical factors for a company's success. Customer loyalty happens when customers have a great experience, and it leads to many benefits: loyal customers return for future business, refer friends and family to a business, and spread positive comments about a company through word-of-mouth advertising. With social media and the ease of rating companies, customer loyalty is more important than ever. There are several important factors that can influence customer loyalty.
How easy is it for your customers to access your place of business? What's true in real estate is also true here: location, location, location. It matters. Customers need to be able to find and get to your business easily. This factor becomes even more important if you offer a product or service that is readily available.
Think about the fast food restaurants in your town. Where are they located? You'll find them where the customers are: in the high-traffic areas. Your customers will be more loyal if you make it easy for them to get to your business.
Selecting good products is important for the survival and success of your company as well. If your products are the same as many other businesses, you'll be less likely to grow customer loyalty. However, if you offer products that are difficult to find, specialized, unique, or interesting, your customers will be more inclined to return to purchase from you. But don't get too carried away--if your products are too unusual, customers may not want what you have to offer.
Think of home décor stores or boutiques. The products they offer are exciting and appealing, and they change the product mix on a regular basis. This encourages customers to return regularly to check out what's new. The attractive, new products encourage customer loyalty.
Consider your customers and how sensitive they are to specials and promotions. If your customers like discounts or promotions, create specials that will keep them coming back. There are many, many ways to promote your business, from pricing specials to free gift with purchase. As you learn what your customers like, you can create promotions that excite them and keep them coming back.
If you've shopped at a big department store, you are probably very familiar with the idea of promotions. These stores run continuous sales, and many items in the store are on sale at any given time. But the stores are also hoping you might come in specifically for the sale items and then purchase a few other items, even if they aren't on sale. Successful businesses understand the value of promotions to encourage their customers to return to buy on a regular basis.
Price is important, but please don't get in the mindset that you need to offer the cheapest price. Having a reasonable price is an important part of making customers loyal. If you have other factors in place, price becomes less important. Customers want to feel special and appreciated, and these factors are much more important than price in most cases. The more unique your products are, the less you'll find price is a factor.
Fast-food restaurants offer many similar products and the competition makes price a crucial issue. However, nicer restaurants can charge more for food if they offer a nice environment and excellent customer service. The price is a less significant factor than the other elements of a customer's experience. In fact, the better the service and food, the more likely customers are to return and tell others about the restaurant.
It is likely that the people at your company have the biggest impact on customer loyalty. You can have the greatest product, the best location, and the cheapest prices, but if you don't have great service and helpful employees, customers will be very dissatisfied. Spend the time and money to hire the best, train them well, and measure their efforts. Loyal customers will return if they have a good experience, encounter friendly staff members, and feel appreciated at your company.
Think again about the restaurant examples; some fast-food restaurants are not known for having great service and customer loyalty because of excellent employees. However, more expensive restaurants are more likely to offer friendly service and experienced servers; this means you will probably have a more pleasant experience there than going through the drive-through. As you are staffing your business, consider what qualities you want your employees to have and ensure you look for those characteristics during the hiring process.
Creating a business that inspires customer loyalty is vital to your company's overall success. When customers are loyal, they return for future purchases, recommend other customers to your business, and offer free word-of-mouth marketing. By considering the five factors presented in this lesson--place, product, promotion, price, and people--you can increase customer loyalty.
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Building & Managing Customer Loyalty Programs3 chapters | 14 lessons
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