At Generix Group, we believe there is a huge importance in consistently striving for customer loyalty. Not only does a loyal customer continue to come back, but they also have the tendency to generate word-of-mouth business via online reviews, social media sharing, and verbal communication.
An increase by 5 or more percent of client retention can actually inflate business revenue by up to 75% (Bain & Company). This is why it is so important to leverage existing loyal customers.
What is a loyal customer?
A loyal customer is someone who comes back for more, not just because they are incentivized to*, but more so because they love a product. This is someone who shares positive feedback and recommendations without being prompted to do so. Loyalty rewards may give customers a reason to come back and shop with you, but true loyalty is not something that can be bought or fabricated. A loyal customer will always be prepared to spend more on a product of high quality as long as they feel an actual emotional tie to the brand.
What does a loyal customer want?
Loyalty has to be earned and maintained, by providing consistently good products and by showing loyal customers gratitude in the form of incentives as well as symbolic gestures such as invitations to try out new products in advance or exclusive sales.
What discourages a loyal customer?
A large percentage of customers (58%) find that their loyalty goes unnoticed and this creates a certain contention within the customer base**. Loyal customers who feel unappreciated tend to fight back by moving their buying power elsewhere and providing negative feedback online, especially via social media.
We believe that businesses need to become more aware of the benefits of retaining clients by adopting a cross-channel approach that identifies loyal customers and incentivizes them to stay loyal.
*According to a recent study we conducted, in France, one out of two consumers has in their possession two to three loyalty cards. However, only 6% of these consumers feel that they are rewarded at a fair value.
**Etude Generix Group – Institut Toluna