Is customer loyalty really the new currency?

Digital acceleration is at the heart of many business agendas these days – it’s a prerequisite to success. Even those who aren’t formally trained in business relations or strategy know that, without a digital presence, no business can flourish and grow.

Plus, the recent COVID-19 pandemic has led to the skyrocketing digital presence for businesses of all kinds, prompting the need for these businesses to compete (very fiercely) to reach their target audience and consequently win their loyalty.

However, with more options to choose from, on top of having these options becoming increasingly accessible, customer loyalty is now considerably harder to secure. Obtaining their trust and loyalty for any business – especially your business – is now a highly-sought after currency rather than a natural occurrence.

If this seems to be an existing challenge for your brand or business, don’t worry – we’re here to talk to you through it all.

What is customer loyalty anyway?

As the term suggests, it really is a straightforward matter. But for full context, Oracle defines customer loyalty as a relationship between you and your customer, manifesting itself by how willing a customer is to engage with you and repeatedly purchase from you versus your competitors. This comes on the back of a customer’s positive experience with you and the product or service that you offer.

In a nutshell, it just means that a customer likes you and trusts you so much that they keep coming back to you.

Apple users are a great showcase of customer loyalty – as it shows that customers are more likely to stick to the brand despite the availability of other options out there. Other examples of brands that have outstanding brand loyalty include IKEA (surely there are other furniture outlets in the country), Starbucks (there are other coffee shops out there), Coca-Cola (is it truly the best fizzy drink available?) and more, but we’re sure you get our point.

The impact of customer loyalty on your bottom line

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The question remains: how does customer loyalty affect your business or brand?
Well, loyal customers lead directly back to sales, based on the amount of business you generate through the customer lifetime value. They are undoubtedly a business’ most valuable asset, and this is exactly how they can impact your brand or business:

They help you save on marketing costs

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Acquiring new customers is a lot of work, and as a leading provider in the industry, SalesWorks knows that all too well – having been at the forefront of customer acquisitions for more than 25 years.

We know first-hand that there are many factors that need to be taken into account when calculating the cost of acquiring new customers, such as marketing, travel, manpower and headcount and even technology costs.

However, you cut to the chase when it comes to loyal customers. They already know what they want, and how your product or service can serve them. This results in much lesser marketing efforts and spending needed to sell to them.
They generate and increase sales

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Sometimes, the best sales strategy is to focus on what you already have on hand. Research has found that loyal customers have an astoundingly high rate of 60% to 70% of making a purchase of your product or service, compared to a probability of 5% to 20% of a new customer making a purchase or conversion.

This means that the bulk of your sales or conversions happens within a pool of loyal customers – so why not take advantage of that?
They can help build referrals through their various networks

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We’ve said this time and again – people buy from other people, and referrals are one of the most cost-efficient and strongest ways to obtain a customer. In fact, a study by HubSpot found that 81% of audiences trust referrals from family and friends over advice from a business.

Referral from a loyal customer is so powerful as it not only broadens your brand’s organic reach but also nurtures a level of trust that cannot be achieved through advertising and marketing alone.

How you can build customer loyalty

As businesses race to build and capitalise on customer loyalty, the most successful way to build loyalty is to ensure you have nurtured your customers right from the start.

SalesWorks prides itself on being one of the region’s premier activation agencies. We provide an extensive, high-quality customer acquisition service that looks at not just the channels and audience pool to target, but also the customers’ personas and what motivates them so that businesses can better foster a trusting relationship with them from the get-go.

Don’t just take our word for it though, drop us a note so we can connect with you, share case studies driven by data and tell you how we help our clients – which could be you – succeed in building their own pool of loyal customers and enhance their business.