Business owners know that offering good products and/or good customer service is important. However, how can customer loyalty actually boost your business?
There are a number of reasons why having loyal customers is important. Looking at a customer’s perspective, you have been loyal to at least one brand in some way. Hence, you keep on buying such a brand because you love it and you feel that your money is worth the quality you get. This is why in a business perspective, earning your customers’ trust is so important.
Perhaps, repeat business is the most obvious advantage of customer loyalty. They are the customers who keep coming back and spending more money on your latest or updated products and services. They keep on coming back because they trust your brand and are confident they are getting quality for their money, rather than gambling on a new brand.
The second most popular benefit of having loyal customers is gaining more referrals. Of course, one of the best forms of advertising has to be the one you don’t pay for and is consistently spreading awareness and endorsements of your brand through word-of-mouth. Not only do loyal customers keep coming back, but they also bring you, new customers. If you earn happy repeating customers, they are more likely to tell their family and friends about your business and essentially do your marketing for you.
Loyal customers are also more willing to spend more money for your product or service. Compared to first time buyers, repeat customers spend more money for about 60%. This figure proves that once a customer has developed trust in your brand and the quality of your product, they are likely to continually return to purchase from you.
However, having loyal customers is a tough challenge especially for start-ups. Do you want to know how to encourage your customers with loyalty? Check this out: https://www.flyingsolo.com.au/startup/how-to-encourage-customer-loyalty-for-startups