Building a steady and loyal customer base doesn’t happen overnight, but what does? Focusing on approaching your current and future customers in an appropriate manner will guarantee success in the long run. When I first dug into topics customer support, customer loyalty and retention; I thought they were pretty boring and hard to seize. However, after some time, it became clear that focusing on building a steady and loyal customer base is something that will pay-off very well in the long-run.
And, as you will see in this in-depth guide, customer service is not only about helping your clients via a live chat software, but it’s far more complex. Let’s dive into the topic.
What is the first thing that comes to mind when you hear the words “Customer Loyalty”? To understand what customer loyalty truly is, we should first acknowledge that there are various degrees and levels of it. One may decode these words as a situation, when a customer is truly devoted to the brand and he/she refuses to buy products from other companies – or in other words, he/she buys products exclusively from one company. He/she is perfectly satisfied with the service and support, which he/she gets for money.
A great example of this degree of customer loyalty is iPhone users. They are not willing to switch to the competition since they truly believe in the product. And as we all know, they don’t hesitate to persuade their friends about it.
When it comes to customer retention or retention rate, we are more or less facing statistics that will tell us how long certain customers have stayed on board as paying customers.
But those are just the numbers and do not show emotions or the actual problems your customers are facing.
Maybe some customers are too conservative to go somewhere else, maybe they failed to find a replacement for you. But compared to loyal customers, those who are retained might not encourage others to buy from you nearly as well – so although they are still paying for you, they are not helping you grow either.
Increasing your customer retention rate obviously won’t hurt you, but what you should really be focusing on is building strong relationships with your customers.
There is no need to express the importance of customer loyalty. We all know about it.
Nevertheless, we feel that giving you some points that will prove our words and will give you insights that are easier to apply to your current or future business.
These are just a few of the benefits that when combined might lead to a surprisingly strong impact on your business.
Calculating these metrics might be tricky.
You might want a specific way to check one of the most important business KPIs, or perhaps you simply want to report the results of your work to your boss. At the same time, you are not interested in going into long discussions that happen in marketing departments all the time. How do you solve this?
Creating marketing analytics is often a very misunderstood activity. We often chase the numbers without actually looking at the business from a higher perspective.
The same issue is with calculating customer loyalty or retention. While calculating retention is something we could quantify, loyalty is impossible to track, and it shouldn’t be in our top priorities.
Why? First, it is something that is connected with our behavior and therefore changes with all different life actions we go through, so we are unable to track them with numbers. Second, focusing on daily tasks that improve your product, brand or logistics will eventually improve your loyalty, and you will spot it by increased sales by the same people, positive reviews, and unexpected visits by someone who was sent to you by their friends.
Customer Retention Rate = ((# Customers at the end of Period – # Customers Acquired During Period)) / # Customers at Start of Period)) X 100
So to put into the real numbers, if for a certain period of time you ended up with 1000 customers and gained 200 new at that time, lost 100 of them, you would end up with 1100 customers, and your retention rate would be counted as follows:
1100 – 200 = 900
900 / 1000 = 0.9
0.9 x 100 = 90
That means the retention rate for the following period is 90%. But we will stress again the importance of different factors that might impact this number. Seasonality, new competitors on the market, discounts for others, the current situation of your customers in their life, or maybe your product is redundant for your customers so they won’t buy anymore. And that’s just a few of them.
So if you decide to calculate customer loyalty or retention, we would advise you to look at the numbers carefully, without driving conclusions out of them too early.
If you were expecting exact numbers here, I am sorry.
The problem with benchmarking customer retention is that it might be defined differently by different businesses and that means it doesn’t mean much to you.
Generally speaking, it is recommended to set your expectations for recurring orders, natural reviews on different platforms, and focus on growing these numbers in time. Progress, stagnation, or sink is what can happen.
In each scenario, it is recommended to look at what were the triggers of these actions and how you can improve. But before spending too much time on analyzing, go ask your (ex) customers first, that’s what we found helps best.
Wondering how to create customer loyalty?
From what you have read so far, it is obvious that building a loyal customer base is a long process; therefore, you won’t find any quick wins here.
However, if you follow the principles listed below, you might be surprised by their impact in the long-run.
So, these are our customer retention strategies:
According to research, the average person is part of almost 15 loyalty programs. On top of that 75% of companies with them generate positive ROI, they also increase customer retention rate by 5%,and if these are just pure statistics for you, even 83% of customers themselves agreed that these programs are what make them continue buying from a certain brand.
Let’s be honest, we all love the feeling of “good purchase.” This is something that is done by our subconsciousness,and it often triggers those well-known spontaneous decisions. Creating a program to reward your loyal customers is a must these days. That’s why we are listing it in the first place, because not having one might make someone go to one of your competitors even without thinking about the quality of actual product.
When crafting your loyalty program, there are numerous options you can consider, but in general, you should explain everything clearly as well as make it fun and easy to maintain. We are listing some of the most well-known and used types of programs below to help you increase customer loyalty.
If you decide to go for a loyalty program or improve your current one, we recommend doing your homework carefully and spending some time on preparation. It will prevent confusion that often happens with these programs.
Creating community is always easier said than done. To group people in one place and make them return without reminding them is the dream of every business. There are several ways you can group your customers in one place. The best is when they start sharing their experience with your product or services on their own and create buzz on their own. This is usually the scenario of very few online communities and often there are plenty of inactive ones.
Forums were extremely popular back in the old days when the internet was born. They offered a new way of communication and sharing information without meeting other people in person. Their popularity decreased with the arrival of social media, but they are still used by niche communities.
Using a forum as part of your online business can be vital if you have an active customer base with solid size. It’s recommended to start small with fewer threads and increase the size of your forums when needed (compared to the other way around).
Today, most communities reside on Facebook or Slack. They often are best options when it comes to privacy of the information, and they are often closed, and they can be joined only upon request.
Their advantage over forums is that you need fewer people, less maintenance and they won’t be visible to everyone if you don’t want them to be.
A very popular way of creating community is to create an FAQ section on your website that lists the best and most important questions that are important to others. It’s not very common to sign the questions or issues with concrete people but displaying the customer’s name is definitely something that most of them will admire.
For a more personal approach, we recommend organizing offline events. Whether it be an informal meeting, workshop or presentation, they will feel you care about the mand they might even feel like they are part of your business.
There is usually a barrier between business and customers in the way that they hold their position in a purchase process. Businesses make offers, and customers search for them and make purchases. It’s very hard to find a business that involves their customers in processes, photos or even decisions.
Why? Because businesses tend to display themselves in a promotion more than the benefits of the products for customers. And if they would include customers themselves, they would increase trust between each other. Customers would trust businesses and feel they are honest and vice versa, businesses would benefit from good testimonials and feedback from them.
One thing that is super important to focus on early on is collecting feedback and displaying it in different formats. We recommend including all of this in the company’s processes and collect everything naturally on a regular basis.
Testimonials and positive reviews have been working forever, but negative “works” even better. Balancing a collection of those that are beneficial for your business and making sure every customer is getting the same support is a must for any business.
And don’t forget to be open towards your customers if your niche allows it. Wins, fails, updates, announcements – keep your audience informed.
You can even use HelloBar to display news. Creativity is the key.
Improving customer experience is something that we often overdo in a way that we try to make fancy and cool stuff in contact with customers, and they simply cannot consume all the information so they quit.
Improving customer experience for us is connected with removing any obstacles in the customer journey.
We are listing some of the ideas which need to be intact with your brand and with best website practices.
Creating and sending mass email campaigns or outreach emails is easy, but sending personalized offers to a small group of concrete targets takes longer but is more effective.
If you are collecting general information about your users that are compliant with the latest GDPR rules, you should have information that is enough for most businesses to target their prospects and customers.
All that you need is to be smart when using these data. For example, Hello Bar allows targeting that lets you segment and offer personalized popups to people who visit your site. This feature is great because you can check how certain groups of people react to different offerings.
You might not want to display an exit popup on pricing page to avoid distracting the person from reading, but at the same time, you want them to be on blog posts because they tend to be usual exit page for many website sessions. All of this is possible with solutions like this and they let you make better decisions based on your own results.
Gathering honest feedback is something might be a clear eye-opener for your business. We have talked about getting reviews and testimonials, but you always get them from your top customers.
However, talking with those who are not always satisfied might bring up some serious issues or other problems that are connected with your business.
Obviously, the list may be way longer, and all of the questions should be personalized for your business. In general, you should look for questions that will motivate your customer to write real and honest feedback instead of answering yes/no. Also, the survey shouldn’t be too long.
If you are in a niche where your expertise determines if you are capable of serving your audience, proving it might be critical to your business success.
Problem is when your skills are not perceived by someone just getting in contact with you. If you are talking about how good you are in certain aspects of your business, you can easily distract your customers by talking too much about your business and less about helping them. And it happens surprisingly often.
So how can you prove you are an expert in your industry? Our top 4 tips:
You have expected this. But at the same time, this is something that is often ignored.
Just head to google and type in keywords that best describe a situation when someone is going to purchase any of your products and look for the alternatives over there.
Google became more clever, so they reward quality more and more, so if you focus on serving better content and providing better support (in this case by guiding them on your website) your brand will benefit and ranking higher in search engines too.
If your website is easy to navigate, loads fast, and doesn’t put up obstacles for your visitors, then having great content will eventually prevail for both customers and search engines.
According to research, more than 50% of customers prefer to get technical support via knowledge base. And we might guess that most of the remaining customers like personal support via helpdesk, live chat or call center.
And yet, we will rarely find a knowledge base on most of the sites. In some industries such as online software, having a support website, knowledge base or documentation is a must. But these standards barely shift towards less fancy and less online-focused industries and that’s where your opportunity is.
Compared to the previous tip, tutorials and guides are well-known and frequently used tactics that work.
Do you know what is best? There is a HUGE number of types of posts that you can choose from. How-to posts are just one tactic you can use, so don’t get used to just one type and get creative.
Last but not least, there is your YouTube channel. Some research shows that video usage increased by a huge 17% in 2017.
Insane right? This 21st century is changing how people are using the technology and we can believe that people will keep reading less and consume video more.
Even if we believe that a well-written guide is best in most cases, we cannot prevent people from spending more time on video.
So if you still haven’t started your YouTube channel, maybe it’s the final countdown for you. You can use pretty much the same list of post types and transfer them into video content.
Please only post videos that offer value to your audience, there are too many useless videos out there on the internet today.
Whether you have a simple solution or a complex one, you will get at least some amount of requests for improvement or for extending your current offerings. You might have heard this:
“Could you add product XYZ to your catalog? Your competitor has it listed, but I want to keep buying here.”
Could you please add feature XYZ to your software? Our company must have. If not, we might switch to other solution.”
Most of the requests will have a similar formulation and they are pretty toxic.
How can they be toxic if they are from your own customers? Good question.
Most of the problematic customers tend to ask for huge discounts, special requests for improvements or they need extra support compared to regular customers. You have definitely heard about 80/20 rule and in most of these situations, you should ignore these requests if it won’t ruin your business. But in the long-run, you should not focus on these customers.
If you have not read yet, we recommend the book REWORK. It has one chapter focused on this problem.
First of our tips is listening by doing. It is pointless to spend months in discussions with your customers about one feature that is missing from your offering. The best is always to answer by solution and you can benefit from the exposure that it might bring. If you will write a big announcement or you will use it in your ads, it will never hurt you.
We recommend focusing only on those requests that are repeated often over a certain period of time.
It’s useless to meet every single request, and it might give you some problems with prioritization.
If there are weak spots in your business that regularly lead to lost customers or negative feedback, you should fix them before focusing on further development. If your business isn’t stable, you might lose the respect you were growing for a long time and they will be gone forever.
We have already included taking feedback in previous tips. However, we would like to give higher importance to taking feedback before something (bad) happens. By doing regular surveys or simply when your account manager (if you don’t have one, someone from your team who gets in contact with customers) asks if everything is all right, you might prevent losing a customer.
By standards, we mean things that are common these days and they are not competitive advantages anymore. Simply they are pain points we discussed above. Before you implement fancy features, ask yourself if you have already this:
These are just some of must-have “features” your business needs to have.
Focusing on core customers and growing your relationship with them is something that might give you the stability every business is dreaming about. There are always those customers that ask too many questions, and there are those who are happy with your product, pay on time, and are always friendly when you speak to them.
And those are exactly the ones you should focus on. It’s very common these days that once the contract and payment are in place, companies start chasing new customers to keep up with their goals.
Rewarding your key customers for their loyalty is what most businesses do via a loyalty program. They do their job well and give everyone the same conditions.
However, segmenting your customers by their impact on your business is something you will barely see. We recommend giving them something special, and it shouldn’t be just a financial reward such as a discount.
Here are some ideas for rewards:
And the list could go on. Any sign of extra effort from you will be counted by your best customers. But don’t push it too much. They can either be disrupted by their daily business or take it too far
One special case of reward which is less materialistic is to take your customer behind the scenes. No matter if you take them your office, production place or show them some of your special know-how you keep as a trade secret.
We all know those pre-sale contact emails, live chats or phone calls. They tend to be very pushy and frequent. However from the point when a potential customer is lost, or a new client is onboard, the interest and effort to help gradually moves toward new prospects.
This is a usual scenario when companies are driven by numbers and chasing revenue. When they cannot quantify any work with numbers such as calls or deals closed, they like to skip it.
Why this problem happens?
In any case, helping your customer should be part of your management process inside your business. Having self-service autonomously run by your customers is great, but not seen very often.
Compare this situation to writing blog posts for marketing purposes. You are trying to rank well in search engines, you are trying to prove your expertise in your niche, and you want to convert your audience to customers.
However, when helping your existing customers, it’s a lot harder to allocate time for a similar situation that is done with another purpose than promoting your business.
Internet got better, and people will realize when you create content that helps them with their passion and when it’s obvious you know what are you talking about and apparently the biggest challenge in promoting loyalty schemes for SMBs is education.
Takeaway is – allocate time for helping customers. Nothing is restricting you from creating educational materials from this discussions. Be smart.
When you are just in the early stages of your business, you wear many hats and focus on quick wins. You create a lot of content, promote it on social media and relevant forums, send out newsletters, polish your product, and there is simply not enough time for supporting your customers.
“Big businesses have a whole department for support, I cannot afford that.” Believe me or not, having chat on your website and sending out triggered emails a few days after their order is something that is more a problem of the organization of your business rather than not having enough time.
Make helping your customer your primary KPI, and you will see the indirect positive impact on your financial goals.
You all have probably heard that it is 6 times more expensive to win a new customer than to retain an existing one. But what’s the equation for letting problematic customers go? The most common use case is that your product simply doesn’t match what the customer’s looking for. When you realize that you’ve reached the limits of your product and can’t meet the majority of customer’s requirements, it’s easier to say no than to continue your struggles.
If you can’t meet a customer’s expectations for whatever reason, they will appreciate honesty and transparency. It’s better to say goodbye in advance, on good terms, rather than doing it at the very last possible moment.
We have given you the advice to take customers behind the scenes or include them in your testimonial section.
That’s all relatively common but involving them in your brand and content is something to consider. We understand that a lot of conservative industries exist where this idea wouldn’t be optimal.
If you are in more fancy industry and your customers are open-minded people who love to share their experience (e.g., via social media), you could easily integrate that into your business strategy.
From our experience, it could also be a very spontaneous decision, and they might not even want to have their favor repaid. A great example of their true love of your brand. So don’t hesitate to feature your fans in the content you create. As a result, it can increase customer loyalty and retention.
Do you know when your customer joined your squad? I guess the most common answer is no. And that’s nothing bad. We usually don’t track this information very often. You might even have their birthday information, but this is really something very sensitive and used only in very special industries.
There are also countries with name days. According to Wikipedia, there are 21 countries with this special event. If you are in one of those, it’s very easy to expand your database with this column and profit from them.
What can you offer during an anniversary?
Basically, anything that they will take as a benefit. Try to reduce upsells to a minimum and focus more on small gifts that won’t ruin your budget but will make them happy.
There is nothing more personal in business than a personal relationship. Sending out handwritten or at least a signed letter to your key customers is something that we see a bit more often, but still practiced by a small amount of companies.
Taking advantage of this simple and low-cost method will definitely decrease churn-rate, even though we can argue that the only important thing is your solution. It gives you an edge over someone else.
If you care about the business of your customer, you might consider following them online and engaging with their announcements. It will give them a special feeling that you care about their work and aren’t only trying to sell them your solution.
You know that not everything that is written on a product page is what you get in reality. Inability to deliver what your customers paid for is the most common way the returning customer ratio is decreased.
Persuading someone to buy your product is only a small win compared to turning them into a loyal customer. But you know that, we have been talking about this throughout the whole article.
If you are taking your business seriously, then focus on slow, but steady growth. There have been numerous cases where companies weren’t prepared and failed while getting more customers.
You cannot serve to everyone on this planet.
You should always promise only what your customers have paid for. Don’t give false hopes that are unrealistic, only give a real scenario that you can deliver for sure.
It won’t only give you free hands during your work, but it will give you a clear advantage when communicating something they didn’t expect.
Did you sell them a basic audit? Throw in a bonus section.
Did you sell them protein powders? Throw in a new product sample.
Did you sell them a new pair of boots? Throw in a boot cream.
These small loyalty points gained by your natural proactivity will drastically change the way the audience is feeling about your brand.
How would you feel if an online store you were buying your clothes from last year asked you about the concrete piece and your overall satisfaction with it? I am sure you would feel very special!
Recurring orders are important revenue for most businesses, and in the meantime, consumers are using the same things repeatedly.
If your customers are buying coffee from you every 2 months or buying winter shoes before winter, why not to send them a reminder with a special offer?
We are surrounded by a lot of information and offers. We have to stay productive during our work hours and get done all the necessities that are part of our life.
And you cannot rely on your customers to make decisions you would love them to make.
How can you remind them that you exist without being too promotional?
We have briefly touched this point in the guide; however, we would love to give higher value to the data points you are checking most.
We feel that focusing too much on lead generation is ruining brands reputation. Do you think that fixing complains about customer’s orders would make them change their review on external sites? No way.
You will be running in a hamster wheel, and after each negative review, you will need a few more positive to get your rating back to the original number. And we aren’t even talking about improvement. That is impossible when you focus only on chasing new customers.
Most of the SMBs usually change their road map after first customers request missing features and that’s fine.
However, changing your road map when you have thousands of customers is not a good idea. Many online businesses have gotten into the trouble after they deviated from their niche path and went on to add a lot of features to actually make it unstable and worse than their top contender on the market.
Both from your statements and product updates, you need to make it clear what are you working on, why, and explain if you have decided not to focus on certain aspects that were requested by customers. Yes, you might lose some of your potential clients, but until you are a huge brand that is capable of implementing features fast, you will do better with less.
Saying “no” to your customer might be really hard, and that’s why we promise more than we can deliver.
Nevertheless, we would like to give you some tips on why you should follow your mission and stand for it permanently:
Only you can make a decision, but we highly recommend staying focused and not getting carried away from your mission.
If you are in the B2B business, it can easily happen that you are part of your customer’s business process. If you are not caring about their results, it means you don’t care about them staying with your business.
It’s obvious that their results impact their order size and overall satisfaction with your solutions in most cases. Occasional questions about their business, networking at a local event or following on social media is an expression of your interest.
If you came here, congratulations. You are really interested in converting your business from average to pro-customer. Perhaps, you might have the feeling that most of our tips are different forms of communication and that’s true.
Therefore, you won’t find any huge tricks on how you could make them feel you are special even if you are not. That’s why our last tip is coming back to the basics.
When trying to become master of customer loyalty, you need to start from the basics. Before you try to implement any of the tips above, try to ask yourself:
“Am I really doing good in these aspects throughout the year?”
They are pretty self-explanatory. If you aren’t good at the basics, our more advanced tips won’t work either.
Seeking more information? Then, check out our in-depth Customer service theory article.
Building a stable customer base starts with a focus on your existing one. While it’s always nice to onboard new customers each month, forgetting about your past clients will eventually lead to collapse.
Whether you decide to send thank you letters, announce the news by CTA system such as; HelloBar, or implement customer service software, you always have to think about customers as people. And all of them have their needs, dreams, and problems. And you need to fit well into all of them. Only that way, you can truly increase customer loyalty and retention.
Knowledge is important, but only when it’s put into practice. Test out everything you learn in our academy right inside of LiveAgent.
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