There has been a lot written recently about the decline in loyalty and the increase in price sensitivity among customers.

Ultimately, if a customer doesn’t have an emotional connection to a product or service provider, there will not be any loyalty — regardless of how many points the customer has accrued.

Here are six ways companies can improve customer loyalty and retention to acclerate sales:

  1. Provide consistently excellent service from the start. The promise made to customers at the beginning of the relationship sets the stage for future satisfaction. Service respondents rate “having the service experience match the promise a company makes to me up front” as one of the most important areas of customer service. A company’s failure to deliver on the service experience promised is customers’ greatest frustration. If you fail to deliver an acceptable customer experience, don’t expect any loyalty or retention. Know what your customers expect and establish that as your service level “floor.”
  2. Keep up with your customer. Companies do not always notice subtle changes in customers’ need for recognition. Consumers want to be rewarded for being loyal. Chipotle does not have a frequent buyer card; however, they do have promotions with sufficient frequency that enables loyal customers to get a free burrito for every five they purchase — a 20% discount. This is a much better deal than most frequent buyer programs that offer a free item after ten purchases — a 10% discount.
  3. Companies overlook signs that customers are considering switching — or don’t care. One key indicator is partial switching when a customer has stayed with a particular company but has added another provider in the same category. This is true with me between Nike and Under Armor with regards to workout clothes, as well as Zappos and Road Runner Sports with regards to running shoes. Likewise, DirecTV failed to deliver when I was looking for HDTV service and I moved to AT&T Uverse. I doubt I am a sufficiently large customer to matter to any of these companies; however, DirecTV has certainly wasted several dollars on “win-back” snail mail since they ended our 15-year relationship.
  4. More than half of consumers have used social media sites to gather information about a company. Consumers trust 90% of what their friends and families say about a product or service. They trust 80% of what a stranger on the internet says. They trust less than 20% of what a company says. Companies must engage in social media and know what’s being said about them. And, if it’s something bad, they need to address it head on.
  5. Although 68% of consumers say technology has improved their experience, even tech-savvy consumers are not swayed by new applications or technology solutions. Companies need to clarify expectations at the beginning of the relationship and use the knowledge gained from current customers, as well as new customers who have switched from one provider to another to understand the reasons for the switch, to create a more satisfying experience.
  6. Treat customers like people instead of transactions. By treating someone like a person rather than a transaction, you can begin to create a relationship and have a dialogue that will increase your understanding of the customer, as well as whether or not they have an emotional connction with your brand. And, if not, what it will take to establish one.

Customers want companies to reward them for being loyal. Recognition programs should reflect the customer’s perception of meaningful increase in engagement or spending, not the company’s perception.

Tom Smith

Experienced marketing professional who has worked with more than 120 clients in 18 different vertical industries. ♦ Differentiate products and services by improving UX and delivering memorable CX to create an emotional connection to the brand. ♦ Obtain insights from analytics to solve business problems and drive revenue. ♦ Develop and implement marketing campaigns that double traffic and leads in three months. ♦ Certified Marketing Automation Professional ♦ Certified Voice of the Customer (VOC) Professional