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Customer Loyalty: The Science and the Art

Most businesses that stay successful are good at not only attracting new customers but keeping a high percentage of existing customers with promotions aimed at them. The idea is “once you’ve won over a customer to spend with you; keep them spending with you”.

I can tell you that I am guilty of sticking with a brand of gas up here in Canada (PetroCanada) for those of you who know it simply because I have their card and I earn points whenever I buy gas. Sure I could go out and collect all the other gas fill up cards but let’s face it. That is a lot of plastic! The same holds true for other purchases people make from greeting cards to health care products and most customers are guilty of choosing to stick with a brand solely because of promotions like these. On the internet it’s no different. Websites that communicate the most with you; you are likely to frequent because you are simply more exposed to them and in a sense it’s the only thing you know so you, as a customer, will keep shopping them because of reasons such as…

• They have a shopping cart that is easy to use
• The customer service cannot be beat
• They promote to me based off of past purchases made
• They have fresh content that I like to sit and read

Those are just a few things that keep existing customers coming back for more. I recently used Amazon.ca to buy some books and a DVD the other day. I thought to myself “sure I could price hunt on eBay for the books but I am not sure if the seller will be as reliable as Amazon.ca so I’ll just buy through them because I know I’ll get the product because of the good past experiences I’ve had with Amazon.” That is the clearest way I can think to show the rationale of a customer’s decision to buy. Millions of those decisions happen daily; possibly billions and chances are you’ve thought like that about something today before sitting down to read this article.

If you breakdown what I just wrote you’d realize what points I touched on above. While I’ve had good experiences when I’ve bought things through eBay most times it’s because I’ve researched the seller before buying from them. If they had a bad rating or something just seemed wrong then I would move on and be none the wiser and if they looked great I’d possibly try them out. Word Of Mouth I’d heard recently from friends would impact my decision and also the dollar amount of the sale would affect whether I buy from an eBay seller. Also time plays an important role in this decision. “When am I going to get my purchase?”, “Is there a refund policy”, “What if it gets lost in the mail?”, these are questions also going through my brain as I choose whom to buy from or if to buy at all. I don’t see myself as overly picky but then again who knows. When I buy from Amazon.ca I know roughly when I’ll receive the purchase, they are a seller I can trust as a customer, they have iron-clad refund and return policies in place, the shopping cart is intuitive, they have excellent customer service if anything goes wrong or I need to change anything.

The reasons customer loyalty works for some companies and not for others could fill an endless list of points but the simple true is that you’ve got to understand your customers, what makes them buy, what made them buy from you, what they value in a transaction because you can guarantee that every customer of yours is different and if you want to keep the majority of yours for years to come you better start to understand them before your competition does.

A good little FREE PDF I found on the internet was this one….

5 Keys to Building Customer Loyalty

It is pretty depth but well worth a look for those of you (especially online business owners) looking to understand what makes a good online business better. Now I am sure there are more then five keys to building customer loyalty but 5 is a great place to start for those store owners out there looking to improve sales.

Some of the biggest in-roads to understanding your customers can be made simply by having a look at your existing system (if you happen to have one) that is already in place and running tests to see what works for promoting to existing customer and what can simply move aside. If it doesn’t work either change what you are doing and test again or simply scrap it and move on. The point behind developing loyalty is that its like Rome, it wasn’t, isn’t and cannot be built in a day. It takes time to see what is going to work best for your business because you’ll need to track results, changes to the system and how they either worked or didn’t work and that’s just for starters. It’s a good start.

Lucas

Customer Loyalty is “key” to your business’ success!