How to Build Customer Loyalty

Five Methods:Providing Excellent Customer ServiceHandling Problems and ComplaintsOffering Rewards and IncentivesUsing Technology to Build Customer LoyaltyBeing Excellent at What You Do

Running a business is tough: there are so many things you have to manage, but one of the most important things to continually work at is building customer loyalty. Because most business comes from returning customers (80% of business comes from just 20% of customers), you need to learn not just how to get people in, but how to keep them coming back.[1]The best way to do that is to make sure that you're giving your customers what they want, treating them well, and making them happy. If you can do this, you'll have created a loyal customer base. Easier said than done, right? Read on for some helpful advice on how to build customer loyalty for your business.

Method 1
Providing Excellent Customer Service

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    Aim for a small-business feel. Consumers tend to think that small businesses provide superior customer service. They think the service is better, and that the small business owner knows and understands both the business and the consumer better.[2]
    • Make sure that you are regularly present and actively engaged in the day-to-day operations of your business, even if you also need to do a lot of behind-the-scenes work. Customers appreciate being able to place a face with the (business) name.[3]
    • Make it clear to your customers that everyone who works for you is fully knowledgeable about your products or services, and train your employees to be able to anticipate your customers' needs.
    • For example, if you own a book store, designate individual employees as the “experts” for certain areas: Sam may be the science expert, Pat the literature expert, etc. Their name-tags can reflect this, and customers will soon learn who to ask for when looking for help.
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    Create a “home-like” experience. You should attempt to create an environment that your customer wants to visit, and where they feel comfortable—think “home”, but better.[4]
    • For example, Grandma's house may have been awesome because she always had your favorite cookies baked, knew what time your program was on, and knit you a special, cozy blanket. Try to find ways to recreate this welcoming, relaxing environment for your customers.
    • For example, if you own a used book store, consider re-purposing an area of your store to become the “reading corner,” with comfy sofas and chairs. Think about offering free homemade cookies for special events like story-time or for book clubs.
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    Remember your customers. As busy as you are managing your business, your customers will nearly always respond well when they realize that you recognize them and that you know who they are.[5]
    • For example, do your best to greet the customers you recognize by name: “Ms. Ford, it's so nice to see you again!”
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    Remember details about your customers. Your customers will also be more likely to want to continue doing business with you if you make the effort to remember information about their preferences, their past purchases, and even the details about their personal lives that they share with you.
    • For example, when Ms. Ford enters your shop, you can say “How did your niece like the book of fairy tales you bought her for her birthday?”
    • Unless you have a stellar memory, you'll probably want to have a system where you can write down these details. Be sure to review it regularly.
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    Listen to your customers. While you definitely need to be receptive to hearing your customers' complaints and concerns, you and your employees should also be on the alert for your customers' compliments.
    • For example, if your customers raved about the new chocolate pastry you put on the menu at your restaurant, you can be sure to continue offering it (which they'll appreciate), and you can also create a new dessert based on a similar flavor profile that you think they'll like.
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    Tell your customers how you are working for them. The customer is nearly always on your mind, but you're probably rarely on theirs. It's not bragging to promote your accomplishments and to let the customer know what you're doing for them; rather, it's good business sense![6] Send updates via a newsletter, on your website or through Twitter, make personal phone calls, etc.
    • For example, you can call your customer to let her know that her special book order is on its way, two days ahead of schedule.
    • Or you could email your customers announcing the introduction of a new line of gluten-free cookies that you've created in response to their requests.
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    Embrace the written word. For loyal customers, you may want to consider sending hand-written notes or holiday in which you thank them for their business and loyalty.[7]
    • You could also send your best customers notes when and if they cross your mind. For example, if you're a caterer and have worked with a family for a few events in the past, you could send something like the following: “Dear Martinez Family: I saw that your daughter is graduating with honors from university—congratulations! Let us know if you need help arranging a celebration.”
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    Make follow-up calls.[8] Your customers will most likely be impressed with your level of service and commitment if you make it a priority to follow through. Call your customers to see if the service they received was as expected, if they were satisfied with their purchase, etc.
    • You can use this time to solicit suggestions for improvement, but you may also be able to get references for additional business. Ask the customer if they'd be willing to refer your services to their friends and family.
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    Be reliable. In order to foster loyalty with your customers, do everything you can to earn a reputation for doing exactly what you say you will.[9]
    • For example, you (and your employees) should work hard to never be late for appointments, to ship deliveries correctly and on time, to offer accurate cost estimates, to give accurate estimates for time-lines for projects, etc.
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    Keep your word. Your customers will also notice and care that you honor your commitments and promises, and that you likewise honor your business's policies about returns and warranties.[10]
    • Word will spread if you or your employees fail to meet customers' expectations or if you go back on your word or your store policy. Not only will you most likely lose your established customers, you will have a more difficult time expanding your customer base.
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    Be flexible (within reason). You may have a strict no-returns policy, or you don't return deposits for your catering business. However, you should know when it's in your longer best-interest to bend your rules.[11]
    • For example, if the Martinez family has hired you to cater their family reunions for the last five years, but need to cancel their daughter's graduation party, you should give serious thought to returning their deposit in order to keep their future business.
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    Give your best customers gifts. See if you can find room in your budget for a small discretionary fund to be used to send your most loyal customers the occasional gift or token of your appreciation. You don't have to spend a lot to make an impression.[12]
    • For example, if you run a restaurant and the Browns have been Friday night regulars for years, consider buying a special floral arrangement for their anniversary dinner that they can take home with you.
    • Keep in mind that it's more and more common for consumers to tell others about their experiences with business, both bad and good.[13] The Browns will be likely to tell their friends about how well they are treated at your place.

Method 2
Handling Problems and Complaints

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    Be accessible.[14] Your customers need to know how to get in touch with you, and you need to actually be reachable through those means. They will be more likely to remain loyal customers if they believe that you want to be in touch with them.
    • Make it easy for your customers to find your contact information: print it on your receipts, make sure it's easy to find on your website, etc.
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    Provide customers with computer and/or phone channels for the resolution of small issues. Depending upon the complexity of the problem, consumers tend to have different preferences about how to be able to handle problems with your business.
    • For example, a lot of customers seem to prefer being able to use email or the company's website for small issues, like searching for a product, instead of being forced to talk on the phone or go into a business to meet with an employee.[15]
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    Make sure that your customers have someone to speak or meet with. For more difficult problems (such as disputing a charge), many customers become frustrated with automated systems and want to be able to talk to a real person.
    • Make sure that if your customers call your business, they can quickly connect with a live person. If they come into the store, be certain that they are immediately directed to the right person who can handle their concern.[16]
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    Train your employees to be responsive and considerate. It's important that you and your employees are courteous to your customers all the time, but it's especially vital that they are treated with respect when they are bringing their concerns or complaints to your attention.
    • The biggest gripes that consumers have that would lead them to dump you for another brand or service are rude and unresponsive customer service representatives, and being shuffled from rep to rep without resolution of the issue.[17]
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    Resolve problems quickly and efficiently. While you strive to run a smooth operation, and do your best to anticipate your customers' needs, it's inevitable that there will be problems you'll have to address. When a problem is brought to your attention, it's key that you resolve it as soon as possible.[18] Let your customer know that this is your immediate priority.
    • For example, perhaps the wrong model of dishwasher was delivered and installed at the Chen household on Friday. Reassure them that you'll personally oversee correction of the problem, and that it will be handled on Saturday, even if your crew normally doesn't work on weekends.

Method 3
Offering Rewards and Incentives

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    Use rewards and incentives programs. Customers tend to love a good deal, and you may be able to build customer loyalty by offering gift cards, reward cards, coupons, frequent shopper points, or discounts for referrals. All of these will give your customers incentive to continue patronizing your business.[19]
    • Consider using these especially during slower seasons or to promote a new product or service.
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    Advertise your incentives program. It's important that your customers (and potential customers) know about your incentives and rewards. Make sure to include this in your marketing and advertising strategy and budget.[20]
    • For example, if you want to start a rewards program at your bakery, make sure that you advertise this on your website, that you have fliers explaining the program in easy-to-see places throughout your storefront, and that your employees remind patrons about the program.
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    Make the incentives program easy for the customer to use. The point of an incentives program is to encourage customers to do repeat business with you, and to also recruit new customers. If your program is complicated or has too many restrictions, you won't see the expected benefits.
    • Customers will be less likely to use your incentives program if they have to fill out long forms or give away too much personal information.
    • You'll probably have better luck with the rewards program at your bakery, for example, if you just pass out cards that customers can keep in their wallets.
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    Give the customers a jump-start on the incentives program. Some business experts recommend using “artificial advancement,” which makes it seem as though the customer is a few steps ahead in earning their reward.
    • For example, you can have a “buy 8 pastries, get 1 free” card at your bakery: instead of printing cards with only 8 places for stamps, print cards with 10, and have the first two stamped.[21]
    • If you do this, it's more likely that more customers will participate in and complete the program, which means that you will sell more pastries![22]
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    Create different levels of rewards programs. Customers also seem to prefer and participate more often in rewards programs that have different levels. Specifically, they participate more actively if there are levels below them.
    • For example, they like being in the gold or platinum level, where they can receive better rewards.[23]

Method 4
Using Technology to Build Customer Loyalty

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    Create a web presence for your business. It's more and more common for customers to expect businesses to have websites. You can use this to your advantage—not only to increase your business, but to also help foster customer loyalty. Your website can be a great platform for you to be able to communicate with your customers.[24]
    • Through it, you can let your customers know what you've been doing for them, promote any sales or specials, provide avenues for signing up for rewards programs, and provide your customers with a way to voice their concerns and offer their compliments.
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    Use other social media tools to build customer loyalty. Besides having a website, you might want to consider creating a Facebook account for your business, and/or a Twitter account. You can post and send announcements and alerts about your business to your customers, and you can then monitor those sites closely:
    • How do your customers respond to your postings and announcements? Are any customers writing positive reviews on your social media sites, or are they perhaps defending you against negative feedback?
    • Besides being able to learn more about your customers and what they want, you can send the most loyal customers personalized thank-you's through social media. You can also consider sending them discount promos or coupons for their loyalty.[25]
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    Give your customers what they want online. Customers are increasingly using social media to follow businesses, usually in order to scope out discounts and special deals.[26]
    • You can use this to your advantage and give your customers exactly what they want, which will make them more likely to remain loyal to you and your brand.
    • Make sure that your website and social media platforms do more than just explain what your services are, or where you are located, etc. For example, if you have a big upcoming sale planned, make sure that it's prominently announced on your website.
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    Use web-analytics to see what customers really want. If you use a web-analytics program on your website, you can learn specific, important information about what your customers have shopped for, searched for, or browsed in the past, as well as learn what they're looking for now.[27]
    • This can help you make sure that you're giving your customers what they actually want, as opposed to what you think they want, which can only help you in your quest to build customer loyalty.

Method 5
Being Excellent at What You Do

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    Make your product or service as perfect as possible. No matter how much your customers may like you, you won't be able to establish customer loyalty if you provide them with an inferior product or service.[28]
    • Make sure that you use qualities ingredients or parts, that production is not rushed or shoddy, and that you and/or your employees don't take any short-cuts that would result in the short-changing of your customers.
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    Set reasonable prices. While many consumers report that they're willing to pay more for superior customer service, quite a lot of them expect stellar service regardless of price. [29]
    • Furthermore, lots of consumers are strapped for cash, and can't afford to pay more even if you're willing to go above and beyond.[30]
    • This indicates that there is a limit to how high you can set your prices, even if you excel at customer service.
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    Research pricing schemes for your industry. To try to balance your profit margin with the limits of your customer's budgets, you should keep current with pricing fluctuations across your industry, and pay attention to your main competitors.
    • For example, if you run a local flower shop, you should investigate the prices of the other brick-and-mortar stores in your town, but you should also see whether any on-line florists deliver in your area to see if you can compete with their prices.
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    Make your business a good place to work. Your customers will be able to detect if your employees are dejected or demoralized, and may be less inclined to do return business with you.
    • If your employees respect you and enjoy working for you, then they will be more dedicated to providing good customer services.[31]
    • You should hopefully see a trickle-down effect, where if your employees are happy, so too will your customers be happy.

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Categories: Customer Relations