How To Build Customer Loyalty

Third Party Endorsement

Customer loyalty has become a necessity for the growth and longevity of a business. However, many businesses today have adopted a transactional rather than a relational experience for their customers. Companies seem to have forgotten that without customers, there is no business. Over the years, I have learned from professional experience what it takes to create a strong foundation of customer loyalty. It’s about checking your perceptions and engaging with customers to develop long-standing relationships. It’s the promise of a personal experience that draws a customer in. It’s the relationship that keeps them coming back, and it’s the experience that motivates them to act as a “third-party” endorsor (see the blog entitled Power of Third Party Endorsement).

Without understanding the difference between a transactional business and a relationship-based business, it can be easy for a small business to fall into a transactional mode because that’s what we tend to see modeled around us by much larger businesses than our own. The most blatant example is when a transactional business, like a utility company or cell phone carrier, offers a special deal for new customers only. I’m sure you can imagine how customers of a relationship-based business feel when a deal is offered for new customers only. They, the loyal customer, don’t get the same benefit. Rather, if you are a relationship-based business, there should be a customer loyalty program in place that honors their previous business that a new customer would never receive. That’s how you build great customer relationships. So how do you start building a customer relationship.

First, business owners need to put the customer first by truly understanding them. One of the biggest mistakes business owners make is using a business model that is owner-focused, not customer-focused. You should have a clear idea of who your customers are, what they want, and how to reach them. Establish these things by conducting research and engaging with customers directly. I’m a big advocate for research and using feedback to make changes that can make a huge difference in building brand loyalty. At the end of the day, you are running a business and are focused on making a profit, but you’ll only achieve this if you understand your customer and their expectations. Remember, perception does not mean reality. So start by building a buyers journey map (see the blog entitled Marketing — Buyer Journey Map) to help you understand your customer’s experience. 

The buyer’s journey is just a small piece of the overall customer life cycle. When prospects enter your marketing/sales funnel, the business goal should be to have them begin a customer life cycle. In other words, the business should be providing a positive customer experience that is related to solving a prospect’s problems or satisfying their needs over time. The customer life cycle is more directly related to the formation of a relationship between a customer and a particular business…meaning the business should THINK RELATIONAL INSTEAD OF TRANSACTIONAL. It is a process that helps drive prospects through buyer’s journey stages of the marketing/sales funnel and turn them into a customer who will be an advocate, supporter and third party endorsor of your brand. Think of it as an extension of the sales narrowing funnel into an hour glass where to bottom gets larger by focusing on retaining customers.

For business owners, it’s easy to think that you are doing everything you can to reach your customers. You’ve created your web page and started marketing. Unfortunately, even then, your customers may not be getting the message. The easiest way to find out? Ask! Reach out to your customers and ask how they heard about you and why they keep coming back. Listen to their feedback and allow them to become an external part of your business model.

If the first step is understanding your customers, the next step is for them to get to know you. There are many ways to communicate with your customers and build relationships that are meaningful and impactful for your business. So just as you have a new employee on-boarding process to acquaint them with your company, build an on-boarding process for your new customers. Proactively guide new customers through your product/service to get them started and stay engaged. It’s fair to assume that they became a paying customer because they saw value in your product/service, so you have to justify that purchase. You want your customers to be familiar with the product/service they’ve bought and understand how they can get the most out of it. Your customer onboarding process should focus on enhancing the customer experience and fostering relationships. A recent study found that consumers are 80% more likely to stay with a company if they feel like they had a positive personal experience. 

Getting out into the community and networking face to face is a great way to connect your business to a person and not just to an advertisement or website. It may sound old school, but sometimes standing outside your business and greeting customers as they approach helps to establish a relationship before they even walk in the door. Don’t assume that everyone knows what your business does or sells. Inform people what you do, not just online, but in person and by word of mouth. Think about it like this: People love going to farmers markets because they enjoy the experience; being able to interact directly with sellers, tasting the products, and hearing the story behind the products. So, why should your business be any different? By establishing a relationship, you are telling your customers you want to provide them with a holistic experience and not just a product, which will keep them coming back for more. 

Once you’ve established relationships with customers, be sure to keep the channels of communication open. Share news such as new products, sales, and promotions, as well as any big or small changes you’re planning for your business. A minor modification to your business may not feel like something a customer may notice but it could be the thing that turns them away. Communicating with loyal customers can be a way to inflection test new ideas and help protect your business, especially when you decide to make big changes that may affect them. 

Give your customers more for their money and they will give you loyalty in return. When a customer feels known for more than just a credit card number or a lunch order, they will feel invested in your business and come back again and again.

For more thoughts on building customer loyalty, view the video entitled Marketing For Business Owners Session 1.

Copyright ©John Trenary 2022

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