Customer Retention: How to Build Customer Loyalty
Customer loyalty is a strategy for profit growth. Why? Because loyal customers can generate up to ten times the value of their first purchase.
Customer retention – getting your customers to make another purchase from you — is a starting point for creating loyalty. Several sources show a single-digit gain in retention has a high double-digit impact on company profits, with Bain & Company research from several years ago demonstrating a 5% increase in retention delivers a +75% growth in profit.
Getting a second purchase means you’re improving customer retention, but becoming a customer’s first choice, for every purchase, every time, is true loyalty.
Staying Connected with Customers After Purchase
Organizations focusing on near-term revenue can struggle with building customer loyalty. These companies may successfully capture first purchases but have a weak plan to support customers after their purchase, reducing the likelihood of repeat business.
Research shows a positive purchase experience and satisfaction with the product or service doesn’t guarantee loyalty if the post-purchase experience doesn’t meet expectations:
• 82% of customers won’t do business with you again after a bad post-purchase experience.
• 60% will try a new company for better customer service
• 79% say having positive post-purchase interactions is important for a memorable experience.
Tactics for Building Customer Relationships:
While these tips may be common sense, research from SCORE.org suggests the fundamentals aren’t always part of the selling process. Small businesses outperform larger organizations with basic follow-ups such as:
• saying thank-you,
• checking-in with customers after purchase, and
• understanding customer expectations and anticipating needs
To build loyalty, develop a customer-centric post-purchase plan focused on:
• resolving complaints with a solution that satisfies the customer
• personalizing post-purchase contacts, using the customer’s name and referencing specific transactions
• providing tools for the customer to use to connect with you, including access to a real customer service representative
Talk with our team at Growth Commercial Capital about your customer retention and loyalty efforts. If you need financing to support your programs, we’ll find the solution that works for you.