8 Ways to Build Real Customer Loyalty?

No matter the size of the business, customer loyalty is incredibly important. Plus, it’s up to ten times more expensive to attract new customers than to keep the ones already doing business with you. If you’re looking for real ways to create and keep up customer loyalty, consider implementing a few of these strategies.

What is customer loyalty?

In short, customer loyalty is the measurement of a customer’s willingness to continue engaging in and purchasing your product or service. Building customer loyalty is important for improving the lifetime value of current customers, which can make up most of your consistent revenue. It even helps bring in new customers, since happy customers are more likely to recommend your product or service to others.

How to measure customer loyalty

There are many ways in which your customer loyalty; it isn’t just as simple as whether customers stay or go. To really measure the loyalty of your customers you need to know the intent behind repeat purchases, how often and when customers stop purchasing, where they make purchases from and how satisfied they are with each transaction.

While every business will incorporate different metrics to answer these questions, here are some of the best ways to measure customer loyalty.

Customer satisfaction levels

When it comes to customer satisfaction, there are five levels of measurement:

• Not satisfied: The customer felt their needs were not met.
• Slightly satisfied: The customer felt that some needs were met but most were not.
• Satisfied: The customer got what they expected.
• Very satisfied: The customer got what they expected plus some pleasant surprises.
• Extremely satisfied: All expectations were completely exceeded for the customer.

Gauging customer satisfaction levels can come from on-page star ratings and reviews, surveying, and even customer interviews. Reviews tend to be more ratings-based with some specificity if customers want to detail their experiences. Surveys allow you to ask for more specific answers from your customers, and customer interviews allow for even more in-depth feedback on your service or product.

They are all great ways to get to know your customers’ satisfaction levels, and you can take different avenues depending on the detail of feedback you’re looking for. You may want to start simple, like sending an email asking for a rating/review after a purchase. Then follow up with a request for a more in-depth interview if that feedback is either extremely positive or extremely negative.

Churn rate

The percentage of your customers that cancel your product or service or do not renew their subscriptions is your churn rate. This metric is specifically important for SaaS or subscription companies that have regularly paying customers. Regardless of your monthly revenue, if your churn rate is high, you have many customers canceling or stopping their payments, which could allude to a much larger problem.

When analyzing your churn rate, view it through the lens of customer satisfaction. Try to uncover why customers are leaving with a cancellation survey or request a one-on-one interview. You may have to provide an incentive to get more information from a cancelling customer, but it may sometimes be worth it.

Customer lifetime value

Your customer lifetime value (CLV) tells you how valuable a customer is to your business based on their entire relationship with you. Rather than looking at it from a  purchase-to-purchase standpoint, your CLV tells you each customer’s worth to your business in totality.

It’s important to note that it typically costs more to acquire new customers than to keep the ones you have. Focusing on increasing the value of your existing customers will help guarantee growth for your company. And as we mentioned before, it can improve your chances of gaining new customers through your current customer base.

Repeat purchase rate

Your repeat purchase rate is the percentage of customers that come back to buy your product or service. This can also be referred to as your repeat customer rate, customer retention, or re-order rate. The higher the percentage the better.

It’s another metric that helps you define customer loyalty and can provide an outline for building customer relationships. For example, you can look at the purchasing habits of your most loyal customers to better understand when to push out promotions or reminders to other customers. In theory, they may need or want to make purchases at the same cadence, but need more of a push to do it.

Affiliate purchases

The term affiliate refers to the business relationship between companies and other businesses or people to earn a commission. For example, if an individual or company becomes an affiliate of a different business they can share information with that company and earn money based on how much traffic they draw in. You’ll want to look at your return from affiliates, especially if you’re paying for it, to determine if you should continue leveraging that relationship.

There are a few different methods of sharing when it comes to affiliate work. Amongst the most popular are:

Affiliate Links

Links to the business site can be placed on the affiliate’s page to drive traffic directly from one site to the other. This method is common on blogs and other sites that share informative articles. This method is especially successful when used amongst people and brands that work in similar industries or appeal to a common audience.

Exclusive Coupons

Sometimes affiliates will be given a coupon code or discount that is exclusive to their name or company. Their customers or followers can then use that code to receive the discount, and it acts as a referral sent specifically by the affiliate. That way, the affiliate will earn a commission based on the use of their own code. Tis is especially common today among social media influencers.

Social Sharing

Affiliate marketing is popular throughout many social media channels. This can be as simple as an affiliate posting about the business’s product or service and tagging them in it. This simple action can drive interest and traffic to the business’ site and they can track how much commission an affiliate will earn based on the interactions with their posts. This is another popular form of affiliate marketing with influencers and other well-known people on social media.

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