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3 Customer Loyalty Mistakes You Should Avoid at All Costs

16 August 2017, 13:24 CET

Customer loyalty is important to every business because it determines the level of profitability and performance.

It has been long established that it is far cheaper for a business to keep an existing customer than it is to sign on a new one. It is therefore no surprise that many businesses rely on the repeat purchases from loyal customers to survive in a highly competitive environment. This is also the reason why the age-old tactic of threatening to switch providers can elicit a better deal than otherwise available from providers of phone, television and internet services.

In addition to the repeat purchases, loyal customers tend to refer other customers to the business and every time this occurs, it is effectively free marketing for you. The benefits of keeping customers happy are therefore not just the repeat custom satisfied customers will bring, but also the perks of cultivating loyalty. Loyal customers are not only much more likely to recommend you to their friends, they are also more likely to encourage others to choose you over the competition.

Turning prospects into buyers and eventually into loyal customers is an involved process that takes time, it is unlikely that any customer will be completely smitten with you after just a few purchases which is why so many businesses offer loyalty cards and other similar schemes that are designed to entice the customer into making enough purchases that brand loyalty sets in. Sometimes, businesses make major mistakes that cause their loyal customers to turn to their competitors even after a year or more of repeat purchases, and remember that it is not just their custom you have lost but also their loyalty. To replace each lost customer, you must sign a new one which, as stated above, is a more expensive process. Here are the major customer loyalty mistakes you must avoid in your business at all costs.

1. Treating All Customers in the Same Way

Here is a common mistake that many business owners and marketing managers make. They compose an email or message then forward it to all customers with a single click, which on the surface seems fine; it is convenient and fast and ensures your message reaches the entirety of your customer base. For very large businesses this solution is fine, but as a general rule your customers do not want to feel that they are just another name on a list or that they aren’t valued beyond being statistics on your balance sheet.

People want to feel valued and important and while the largest corporations won’t have the time or resources to be able to personalize their messages for each customer, smaller businesses can afford to do this. This is particularly important for businesses who operate on a low-volume, high-price model where a small number of larger sales keep the company afloat. Businesses of this type typically have a relatively short list of repeat clients and taking the extra time to build loyalty with them is well worth the time of any business owner.

One of the most effective ways to achieve this is to personalize your customer loyalty approach. Start by sending personalized messages to your clients. You can still customize emails but include the customer’s name and details of the last purchase. Categorize your clients based on their contribution to your business’ profitability. Prioritize the most profitable customers in your strategies because they are likely to refer similar clients to your business.

2. Using Loyalty Surveys as Marketing Tools

Finding out what your customers think and feel is an important part of the process of building an effective marketing strategy. There are a number of ways one can go about finding this information out. Small businesses, for example, may well find it easiest to simply ask their customers if they would mind completing a short survey at their convenience. Larger businesses can include a line on any receipts or invoices asking for feedback on specific issues. In both cases, this represents an opportunity to gain invaluable feedback on how your customers are responding to your loyalty programs.

Measuring the effectiveness of loyalty strategies by conducting surveys involving all clients in your database requires a well-designed survey and an understanding of how to interpret the results. Marketing personnel with an online MS marketing degree have all the research skills required to conduct such surveys. The idea of regular surveys is excellent, but some businesses use the surveys to market their products. You can tell from the survey questions that the researchers are only passing knowledge of the latest products in the company.

Some conduct surveys and ask questions about the most expensive products. Your clients can read in between the lines and see your real intentions. Limit loyalty surveys to discovering how your business can serve the clients in a better way. Ask open-ended questions that allow clients to express their opinions of your business and not just a few products that you want them to buy.

3. Treating Loyalty as a Program

Many companies have a customer loyalty program in name only, one which prioritizes sales figures and statistics over the customers themselves. It is a series of processes and actions with no emotions or care for the clients, often operated under the naïve assumption that clients can’t tell the difference. The reality is that loyalty is more than a program. It is an emotion and business owners must learn to treat it as such.

Employees need training on how to create loyalty programs that appeal to the emotions of the clients. Pursuing an online MSM degree enables marketing personnel to perfect their skills in creating and implementing such programs.

Conclusion

Maintaining loyal customers is profitable and cheaper than turning leads into one-time customers. The goal of every business owner should be to turn every client into a loyal client and keep him or her in the database for as long as possible. This will require a personalized approach to loyalty programs and continuous evaluation of such programs. Regular surveys enable business owners to identify their mistakes in the customer service and loyalty strategies.

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