How to develop customer loyalty

7 ways to increase customer lifetime value

Establishing an effective way to generate leads is essential to your business. You need to bring in new customers to grow your company; however, it’s also important to make sure you’re creating customer loyalty in your existing base.

There are brands like Apple that do this extremely well, spurring customers to line up outside their stores when a new product is released. Other brands, like Blockbuster, folded when disruptors came along – partly because they failed to innovate and partly because they didn’t master how to develop customer loyalty.

But what is customer loyalty? And how can you develop it? Here’s how you ensure your customers stay committed to your brand.

What is customer loyalty?

At its core, customer loyalty is when a customer conducts transactions or interacts with a brand on a repetitive basis. Some argue that customer loyalty is merely about buying products, like purchasing gasoline from the same station even when there are cheaper options. Others see advocating for a particular brand as a form of customer loyalty. But customer loyalty is also emotional. Loyal customers identify with your brand as a representation of themselves and trust your products above all others. They see the value that you provide and reward you for it.

Why is customer loyalty important?

Customer loyalty helps you increase profits in several ways. When you build up customer loyalty, consumers will give you the first chance to secure their business before they consider your competitors. They’ll also be more likely to purchase your new products or branch out to other services you offer. This combination of spending money over time and increased average order values means a higher customer lifetime value – and more revenue for you. On the other hand, lukewarm or lapsed customers will leave a brand if they are not being reached or incentivized to stay loyal.

Customer loyalty can also bring in new business through referrals. By creating a brand your customers want to support, you’re turning your customers into raving fans. This type of customer loyalty is its own kind of marketing, as happy customers will tell their friends about you in enthusiastic terms, often driving a pipeline of potential clients your way. Your reputation is everything in business, so don’t ignore this important factor.

How to develop customer loyalty

Customers who are raving fans of your brand are essential for creating new leads backed by customer retention and loyalty. Here’s how to develop them.

1. Start internally 

What is customer loyalty? You might be surprised to learn it starts with employee loyalty. Before you can secure customer loyalty from your target demographic, you need to make sure that your internal team is in love with your product, service and company as a whole. How do you get your employees to feel like they’re truly a part of your company’s mission and core values? How do you entice a large group of people to feel not only happy, but thrilled to come to work every day?

It’s not enough to tell your team members they matter; you have to find ways to actively show them they’re important. Seems easy, right? Yet many business owners get so caught up in providing value to their customers that they lose sight of what matters to their employees.

Look at your company’s practices. Have you created a culture where your team feels valued and excited? Establish this by paying them fairly, providing benefits so they can take care of themselves and their families and making sure they’re getting the time off they need to rest and recharge. Those are the basics.

Go above and beyond by offering additional perks, like company retreats and catered lunches. More important than perks is the company environment you create. Make time to honor successes and celebrate victories and get to know your team’s different communication styles to facilitate teamwork. Ask for their input and deeply listen to their answers. Above all, make sure you treat each person on your team respectfully, and let them know how much you value their ideas and contributions.

customer loyalty

2. Increase employee engagement

Exactly how is employee engagement a relevant factor in securing customer loyalty? As reported by Forbes, the emotional attachment of workers, which is bolstered by happiness with their jobs, translates directly into employees’ customer service. Since customer service translates directly into sales and marketing effectiveness, the equation for customer loyalty is obvious: Business owners must prioritize their employees’ workplace experience and happiness in order to generate customer loyalty and retention.

Because engaged workers are 44% more productive than unengaged workers, business owners must keep employees engaged through measures like creating trust in the workplace as well as outstanding pay and emotional engagement with the work. To nurture an effective level of employee engagement, employers must facilitate strong and/or effective internal communication and respect while recognizing staff members’ potential for success

Giving staff a voice is key to how to develop customer loyalty, as fully engaged employees provide more effective customer service. It’s the difference between supporting customers who call in with questions or concerns and putting those same customers on hold or in an endless cycle of automated messages or voicemails. Employees must also be equipped to recognize when potential customers will respond well to an extra perk or if a small gift or reward could turn a disappointed caller into a loyal client. These real human connections are moments customers will remember as they consider making another purchase.

3. Get to know your customers

Now that you’ve addressed any internal roadblocks, it’s time to think about your current customers. Not your ideal customers, but your real customers who are already purchasing what you’re selling. Who are they? What do they need not only in their lives, but from you specifically? As an owner, you must know your customers better than anyone else. This awareness helps a business identify pain points and optimize its products, providing exactly what its customers need.

Getting to the bottom of these questions is not a step toward world-class marketing; it’s essential to building customer loyalty into each business decision you make. If you have a successful business, it’s due to your clients purchasing your goods or services. How can you keep fulfilling their needs so they continue being loyal to your brand? If you sell incredible shoes for outdoor adventures, recognize that your customers don’t need shoes – they’re looking for a reliable product that will accompany them on all of their adventures. 

To build up customer loyalty, you need to recognize that your customers are looking to reconnect with the outdoors and need something they can count on along the way. This type of thinking is what helps you create the ultimate customer experience and makes you talkably different from your competitors.

 customer loyalty

4. Provide real value 

You’re tuned in to your customers’ genuine needs and are on your way to creating a brand identity people are inherently loyal to. The next thing to assess in developing customer retention and loyalty is whether you’re adding real value to the lives of your customers. What can you offer that your customers value? Are your outdoor shoes reliable? Are they made of eco-friendly materials? Are they under warranty? Do they cater to a variety of styles and sizes?

If you’re not actively giving potential customers reasons to be loyal, there is no reason for them to keep buying your products or services. But once you realize that your customer’s life is your business’ life, you can understand what they need from your product to enhance their lifestyle. This helps you provide an excellent buying experience for your customers so they’ll never have to find somewhere else to spend their money. Keeping your customers’ prime values in mind while developing and marketing your product will take you a long way in establishing sincere and long-lasting customer retention and loyalty. 

5. Leverage the value of preeminence 

Marketing guru Jay Abraham developed his Strategy of Preeminence around the idea of the business owner acting as a trusted advisor to customers. You must empathize with their problems and understand their needs. By closely listening to a customer’s needs and serving those needs with additional products or improvements to your products instead of brushing their ideas aside, you’ll learn how to develop customer loyalty

When you implement Jay’s Strategy of Preeminence into your business, you’ll shift your mindset to view customers as clients. While a customer is someone you sell to, a client is someone you protect and advise over the long term. Even if you sell a product such as the outdoor shoes mentioned above, you can still view your customers as clients and find ways to continually serve their needs.

Taking the long view is an excellent way to increase customer loyalty and retain those who are likely to buy again from you in the future. View what you sell – no matter what it is – in terms of a belief or outcome rather than a product. Are you selling hiking boots or are you selling the rugged freedom of the outdoors? It’s easy to see which of these is more likely to inspire loyalty.

build up customer loyalty

6. Create customer loyalty programs

Building relationships with customers isn’t just about listening and communication. Don’t forget one of the best, concrete ways to keep customers coming back: rewards programs. Customer loyalty and rewards programs are a win-win: You get repeat business for a small price, and customers get to feel special and fulfill their need for significance. Here are three of the most popular types of customer loyalty programs.

  • Point-based. Point-based programs are one of the easiest to implement. For each dollar customers spend, they get a certain number of points that they can redeem at a later date for rewards. They can save up points for a larger reward or redeem them for smaller rewards immediately. This type of program works well for frequent, small purchases, like coffee or gas.
  • Graduated. Graduated loyalty programs, also called tiered, start with a small reward just for signing up. The more customers spend, the greater discount they receive. This encourages them to not only keep coming back, but to spend more. It’s a common program type for airlines, hotels and restaurants.
  • Fee-based. Charging a fee for customer loyalty programs seems counterintuitive, but consider Amazon Prime, one of the most successful programs of all time. Fee-based programs remove common barriers to purchase like shipping fees, saving customers money when they’re used frequently – leading to more purchases.

7. Continue innovating

Markets fluctuate. Economic winters and recessions come and go. Most of all, customer behavior evolves. Customer loyalty used to depend on geographic location more than anything. Mail-order catalogs changed the game and then the Internet transformed the entire landscape. The pandemic drove even more activity online, accelerating the digital transformation – and your competition. The future of customer loyalty is going to involve real investment, strategy and measurement. You’re going to have to commit to constant and never-ending improvement.

You’re never really done creating customer loyalty. You always need to continue innovating. You must never consider your product complete because changes will come that require you to fit the diversified needs of your customers.

Is there an opportunity to not only offer hiking shoes, but shoes specifically designed for rock climbing? Are your customers demanding a kids line so they can get their children in on the brand? Recognize ways to change and improve your product so you continue to stay relevant and necessary to your target audience. By continually adapting your product so that it aligns with the current and future needs of your business and your market, you’ll secure customer loyalty that will help your business eclipse the competition.

Team Tony

Team Tony cultivates, curates and shares Tony Robbins’ stories and core principles, to help others achieve an extraordinary life.

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