12 Ways Retailers Can Increase Customer Loyalty To Boost Sales

Loyal customers spend 31% more than new customers. With competition being fierce, customer loyalty is crucial in building a successful business. Learn how you can create loyal customers with these simple strategies.

Customer loyalty is turning regular customers into repeat buyers. Loyal customers favour one brand over another, buy more from those brands and promote those brands for free.

One key factor in business success is the ability to create loyal customers and brand advocates.

Customer loyalty has the ability to increase your revenue, it costs your business less, and you can drive more referrals than businesses without loyal followings.

In the following article, we take a look at 5 reasons why customer loyalty is important for your business and 12 ways you, as a retailer can improve your customer’s loyalty to grow your business.

Why is customer loyalty important?

Without customers, you won’t have a business, it’s that simple.

The key to any successful business is to build a loyal customer base who talk about your business and keep coming back for more.

Customer loyalty can be the difference between choosing your brand over another for a purchase. If you want the customer to choose you then building loyal customers is super important.

5 benefits of customer loyalty

Let’s take a look at the 5 benefits of creating good customer loyalty and how it can help your business grow, save costs, and increase revenue.

1. Save costs – keeping existing customers cost less than finding new customers

It’s much harder to get a new customer than it is to keep your existing ones. According to InvespCRO acquiring a new customer costs 5 times more than retaining a current customer.

So it makes sense for small businesses to focus on keeping existing customers to remain in business. For smaller businesses with smaller marketing budgets, nurturing existing customers offers a greater return on investment than finding new customers.

Loyal customers also cost less in terms of support as they know your business and how to work with you. The probability of selling to an existing customer is 60-70% and only 5-20% for new customers.

Acquire new customer

2. Increased customer lifetime value – loyal customers spend more

Increasing customer loyalty will increase your business profitability.

Loyal customers spend 31% more and they are more likely to try new products than new customers.

Motista found that customers who are connected with a brand have a lifetime value that’s 306% higher than the average customer.

Customer lifetime value is important as it tells you how much you can expect a consumer to spend whilst being a customer with you. Improving this metric will help you become more profitable.

3. Free advertising – loyal customers promote your brand for free

Turning customers into brand advocates requires customer loyalty. If you can create a good experience for your customers, they will talk about your business for free.

90% of people trust brand recommendations from friends and family, and 70% rely on customer reviews.

Not only that, but Customers acquired through referrals spend 200% more than the average customer!

By creating loyal customers you can reduce the cost of your customer acquisition (that is the cost to gain new customers), increase your customer lifetime value and ultimately get more for your marketing spend.

Here are some interesting facts about bad customer service just to drive home the idea of why it’s so important:

  • Businesses lost $75 billion in revenue due to poor customer service in 2018. (Forbes)
  • 78% of customers have backed out of purchase due to poor customer experience. (Glance)
  • The #1 reason customers switch to a new brand is feeling unappreciated.
  • 48% of customers who had a negative experience told 10 or more others. (Harvard Business Review)

4. Be more competitive – fend off the competition

The most common narrative we hear is the small business overlooked for the larger corporation. It happens every day and with the growth of online shopping, customers are more price-sensitive than ever before.

Independents simply cannot compete in terms of price or in some cases shipping times however if you can build a loyal customer base they will stick by you in spite of this.

Rewarding your customers, offering them differentiated products and quality service will make your business immune to the growing competition.

Truly loyal customers will avoid your competitors, not being influenced by their price cuts allowing you to enjoy a certain degree of security in your offering.

5. Increased revenue – drives repeat business

The most obvious reason to build your loyalty is to encourage repeat business.

Customers who like your brand and the feeling they get when in-store are sure to return time and time again. Also with the right incentives, you will ensure these same customers always choose you first and in the best case scenario advocate for you online, referring you to friends and family.

So how do you increase customer loyalty? We’ve put together 12 easy things you can do to increase customer loyalty for your business.

Happy customer

12 ways small retailers can increase customer loyalty

Just because you are a small business, doesn’t mean that you can’t offer great customer service, quality products and loyal schemes for your customers. These are just some of the ways you can start to build loyal customers for your business.

In this section, we take a look at 10 ways in which small businesses can increase customer loyalty for next to no cost.

1. Reward your customers

Reward your customers just for being customers. There are a number of things you can do whether it be offering loyalty programmes and/or customer accounts that offer flexible payments.

Research from CrowdTwist shows that 76% of women and 72% of men are likely to shop at a business that offers a loyalty program. According to Hubspot, 52% of loyal customers are ready to join a loyalty programme, and we know that means you can directly generate more sales.

You don’t have to spend a lot of money to set up a loyalty program, it could be something as simple as spending £10 and getting £1 free. Or buy 5 coffees and get the 6th coffee free. Offering exclusive discounts for customers is another great way to get people enrolled in loyalty programmes.

You can even use your point of sale software to help with this process, AirPOS Pro offers both of these features to customers so you can start offering them to yours.

2. Provide great customer service

Providing great customer service costs nothing and goes a long way to building loyal customers.

Simple things like greeting customers with a smile when they come to your store, answering their questions properly, being active on social media and having support channels for them (email/phone/live chat or in-person) will help tremendously.

Always remember that customers want to feel the human touch from businesses and that they are valued if you do this pair with quality products and or services you’re on to a winner.

93% of consumers are more likely to make repeat purchases at companies with excellent customer service. Whilst 90% are more likely to shop with your competitors after receiving poor customer service.

Starbucks user generated content

3. Build a community

Communities offer a great way for your customer to communicate with each other, and you. The main aim is to engage customers,

Companies with a strong sense of community will outlast those that feel robotic or out of touch with consumers.

Doing this can be as simple as having a customer exclusive Facebook group, or even getting into conversations with your customers on your social pages.

You could also try things like Facebook live/Instagram stories to connect with customers and answer their questions.

Another idea is to have user-generated content, something that’s popular with brands of all sizes including Nike, Apple, Starbucks and Squarespace.

For smaller businesses, this could simply be having a hashtag on Instagram or Twitter, or sharing customer images with your products or success stories of your customers using your services.

Blogging is another great platform for building a community. If you offer advice and guidance on the things your customers care about they will keep coming back for more.

4. Personalise your marketing

We’ve already mentioned the fact that customers want to have human interactions with your business. Your marketing should be no different.

87% of customers are interested in having their activity and behaviour monitored in order to receive personalised rewards or engagement from a brand

The best way to personalise your marketing is to collect data about your customers. This can be done easily with a loyalty program.

If you have an eCommerce store it’s also possible to do this by setting up customer accounts when someone is purchasing products from you.

When you market to your customers you can then provide better experiences by showing products or services that will fit their needs.

5. Listen to customers

Communication with customers is so important for businesses, it’s also incredibly useful for helping you improve your business.

62% of customers want to communicate with companies via email for customer service. 48% want to use the phone, 42% live chat, and 36% contact us forms. (HubSpot Research).

Make sure that you are available in more than one way, and that you are responsive, genuine and real with customers. Using automated responses is a great way to infuriate customers.

42% of consumers expect a response on social media within an hour, and another 32% expect a response within 30 minutes.

Offer places where customers can provide feedback and actually act upon it, and don’t forget to communicate this with your customers.

Community groups are great places to ask for feedback and support your customers. You can have a “VIP” or focus group specifically for feedback from your most loyal customers. Being part of a “VIP” group is a great way to make them feel like a special customer.

AirPOS reviews

6. Ask for customer reviews

One great way to build trust with new and existing customers is by collecting customer reviews and feedback.

Doing this gives you ammunition to show potential customers that you’re doing a great job. You can share feedback on your website, via social media channels etc.

If you don’t have a website, you can always ask for feedback via Yelp, Google Business, TrustPilot or various other review platforms.

By asking for feedback you are also showing your current customers that you value their opinions and want to hear what they have to say, good or bad. Customers like to feel heard particularly if it could result in an improved product or service. Building this relationship/connection will in turn build their loyalty.

You can take it a step further and give customers a small discount for providing feedback about your product or services, again it’s a matter of showing them that you appreciate them for their custom.

7. Build brand awareness

Build brand awareness. This can be done in a number of ways, using influencers to talk about your products, Facebook advertising, using custom audiences to grow your audience base or retargeting ads.

Make sure to have Twitter, Instagram, and Facebook set up also to showcase your brand.

If you remain on top of mind for customers and customers interact directly or indirectly with your brand, they will become comfortable with your business and they are more likely to shop with you.

This is particularly important if you sell online as trust is the key factor when shopping online. Using customer reviews and influencers will help improve your brand image and increase your brand awareness.

If your brand is authentic and you can build authentic relationships with your users your brand awareness will grow organically.

8. Offer quality products & services

Offering quality products & services is one way to build loyalty for your brand.

With so much variety available now, having a product that offers quality can allow you to outsell your competitors and build a loyal following.

If someone loves a product they tend to stick with it, they’ll even go out of their way to get it. Take a look at Apple products, people perceive them to be top quality and they have people queueing overnight just to get them when they are released.

77% of consumers say they stayed loyal to specific brands for 10 years or more.

55.3% of consumers stay loyal to a brand because they love the product – Yopto.

Quality doesn’t mean you have to be the most expensive, it just has to be relevant for the price point customers are paying. For example, many people consistently shop with Primark who offer cheaper prices than most stores, however, the quality is good enough for the price point and they offer products that are on-trend and last for a season.

9. Have an omnichannel sales strategy

Offer multiple channels for your customers to buy from you. Or in other words, sell where your customers are.

This convenience allows customers to buy directly from their homes or on the go if they want to.

Using a system like AirPOS that integrates with eCommerce allows you to keep track of stock both in-store and online in real-time.

In the 21st century convenience for customers is super important. Having a presence online and in-store gives you twice the exposure and it’s expected from your customers now.

Offering an omnichannel loyalty program can be a great way to keep customers coming back online or in-store.

Learn more about omnichannel sales here.

10. Offer exclusive discounts

The most obvious way to incentivise your customers to encourage repeat purchases is to offer discounts.

As well as encouraging your current customers to return, money off coupons could be what brings new buyers to you or gives you the edge over one of your competitors.

In a recent survey by Retailmenot, it was found that as many as two-thirds of consumers have made a purchase they weren’t originally planning to make solely based on finding a coupon or discount.

Interestingly, four out of five also said they feel encouraged to make a first-time purchase with a brand that is new to them if they found an offer or discount. Once you have hooked in these new customers you can use methods other than money to win their loyalty.

Constant offering discounts will only devalue your brand and it’s not a scalable strategy.

Use exclusive discounts as one way to entice new customers in or to get buyers to sample new products, but focus on customer experiences to create long term brand advocates.

11. Offer exclusive access to new products or events

Ensure your customers come back for more by showing them how important they are.

Build a VIP club for your returning customers, giving them exclusive perks such as early access to new products, free samples or invites to events. Building this kind of system will make your customer more connected with your brand; that they are more than just another customer.

Bond reported that 37% of customers are willing to pay more money to upgrade to an enhanced tier of a customer loyalty program. This statistic clearly highlights the value consumers place on exclusive access, despite what this actually entails.

Also by offering incentives to these customers you are increasing the chance of purchases on new products as those targeted already have shown an interest in your brand and are highly engaged.

why customers purchase

12. Engage customers on your social media platforms

Social media is one of the most effective tools a business can use to build an engaged and loyal following. The key, however, is to be organised and understand your following.

Brands that are able to build a loyal engaged audience are those who understand their following and generate content that appeals to them. Trying to appeal to the masses, in most cases will result in shallow glimpses from customers with low intent.

Take time to examine your audience, who are they, why do they shop with you etc. From this, you will be able to draw in people who are more likely to actually be interested in your offering.

American food manufacturer Kelloggs has one of the most successful social marketing strategies simply by understanding the voices of its different brands. Although a huge multinational its methods could easily be adopted by even the smallest of startups.

The most effective of its brands, Pop-Tarts, has built a loyal following on Twitter due to its sarcastic and witty content which directly appeals to its target audience, teens and young adults. This is the polar opposite of their parent company Kellog’s who also has a loyal following but from much more wholesome and traditional content.

This is a brand that understands its different market segments and without breaking the bank have been able to build followings who give feedback, share posts and will buy into their new products.

When thinking of social media it is important to remember what it is, social.

Yes, these are brilliant sites to run ads and increase awareness but those brands who are most successful are also those who interact with their audience.

It was found that 85% of Twitter’s 330 million active users think it’s important for businesses to provide customer service using the network, according to Lyfe Marketing.

It can also be seen on the graph below from the same study the level at which customers value responsive brands whether this is simple replies to comments or whether this is responding to complaints/concerns.

Many businesses still do not see social media as a valuable tool in building loyalty, however, a whopping 93% of Twitter users planned to make a purchase from an SME they followed on social media.

And why not? People want to buy from brands they connect with and support, and there is no better place for them to learn about your brand than a page with content correlated by you.

Also with the new capabilities on socials, your followers can see an item and within one click be directly on your site with it in their basket at checkout. The possibilities are endless and the cost minimal.

Try AirPOS Pro today, and start building customer loyalty

If you want to succeed in business, focus on providing genuine customer experiences that build loyal followings. We’ve given you 9 ways in which you can foster customer loyalty to help your brand.

If you want to build loyalty into your customers right in your point of sale system, check out AirPOS Pro which offers customer accounts and loyalty built-in.

We’d love to hear of the unique ways you’ve been building loyalty with your customers, so get in touch with us on our socials today.

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