Most business operators understand that customer loyalty is a key component of long-term success. Even in the simplest terms, we know loyal customers are repeat customers, so the more loyal ones we have, the more recurring revenue we’re guaranteed. But customer loyalty encompasses more than just the likelihood that they’ll come back over and over: we also have to wonder if that loyalty means they’re likely recommend your business to friends and family, as well as how likely they are stick by you in tough times.
To answer those questions, we must ask this: to what are these customers loyal?
Price
The least loyal kind of customer is the one who chooses to do business with you purely from a financial standpoint. Maybe your business offers the best prices, so these customers keep coming back because they’re spendthrifts. Now, that’s okay in and of itself, but it’s important to remember that external pressures will really affect these customers most. When you’re forced to pivot your business because of the rising tide of inflation, understaffing, and supply-chain woes, these price-sensitive customers are going to be the ones who jump ship first.
Long-term, we advise against chasing the lowest prices as a business model. All that pursuit will earn you is slim profit margins, underpaid (and thus unhappy) employees, lower product quality, and other compromises. That’s the game that the megaretailers are playing, and the only reason it works for them is the scale. A small business should never get involved in a race that only leads to the bottom.
Convenience
The second least loyal kind of customer is the one who merely chooses your business because you’re the most convenient for them. This might be because your location is literally closer to where these customers work or live, or it might simply be because your location is less busy than others, so they can get what they need done quicker with you.
The problem with this is that what makes your business the most convenient for customers can change. Maybe a competitor builds a place closer to those customers, or perhaps your business gets busy enough that your location is no longer the quickest option. Or an even bigger threat—maybe these convenience-minded customers decided ordering online is so much less stress for them that they’re literally willing to either spend more, receive less support, or wait longer for their purchases simply because that method is less of a hassle.
Experience
Now, the most loyal customers are the ones who choose to do business with you because they enjoy their experience. While price and convenience are factors in what makes a customer experience enjoyable, they truly are small considerations compared to the level of customer service and quality they receive when they come to you.
The customers who remain loyal because your employees show them courtesy, respect, and appreciation—those are the ones your business should obsess over. They’re the kind who will weather the changing landscapes of convenience and price. They’re also the kind most likely to evangelize your business with others, which helps to expand your base of people who care enough about their experiences to even pay a premium.
It Takes All Kinds
At the end of the day, it takes all kinds of customers to keep a business going. You’ll always have a mix of the aforementioned varieties of repeat customers, and you also have some one-and-done sales as well. But the loyal ones—the really loyal ones—are the customers who spur you beyond survivability and into sustained growth.
Are you curious as to how you can measure the loyalty of your customers? The first step is to measure your customer experience through a service like mystery shopping: this will let you know how well your business executes on your vision for a great customer experience. The second is to begin surveying your recuring customers to see what they love most about your business, and what they might change.
The Brandt Group is a premiere customer-service consultancy, one that has aided in the growth of hundreds of businesses during the last three decades. Our clients use our mystery shopping services and our leadership training courses to maximize their customer loyalty and improve their employee culture to achieve soaring returns on investment. Why shouldn’t your business also benefit? If you’re ready to seize control of your business’s destiny by earning long-lasting customer loyalty, message us today!
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