Why Customer Loyalty Has a Profound Effect On Your Business Success

Want a successful business? You’ll need a loyal base of repeat customers. That’s the word from Loyalty 360, who also states that loyal customers are “the ones who keep your lights on and doors open, and are most likely to advocate for your brand.”

According to data from Marketing MetricseConsultancy, and Adobe:

“Loyal customers demonstrate conversion rates 5-9 times greater than first-time customers!”


Source: Duct Tape Marketing

Loyal customers are “conversion-friendly”, plus they’re more likely to be “brand ambassadors and influence others to purchase from your company”, says Duct Tape Marketing. And because word-of-mouth referrals are so common these days due to consumers sharing their opinions on public forums and social media websites, you’re essentially getting free marketing!

Okay, so now that you know repeat customers are a crucial part of your business success, how do you meet the challenge of increasing customer loyalty?

Forbes offers the following ways to develop loyalty and build profits:

Make a Personal Connection First

According to one survey, 71% of customers who ended a relationship with a business did so because of a poor customer service experience.  Additional research indicates that consumers want conversations with a real person more than ever. While automated phone systems save money, personal contact from well-trained customer service representatives earn loyalty. Make a personal connection first, then plug in to Twitter, Facebook, and other social platforms.

Being a Customer Shows You How To Treat a Customer

The next time you visit a Wal-Mart, Target, or Home Depot, focus on the experience.  If you’re a service provider, shop a competitor’s web site and check out their telephone help line. Take note of the positive and negative aspects or your experience, then implement what you’ve learned to improve your customers’ experience.

Master the Art of Greetings and Goodbyes

Customers remember the first and last moments of their interaction with you way more than what happens in the middle, so the way you greet and thank each customer is critical. When Forbes conducted a study of consumers’ buying behavior based on the way they were greeted, they discovered that the group welcomed with a friendly smile bought more items, and spent more on them, than the group greeted by a straight face.

It’s the Little Things That Matter

Associates sometimes pass over the little purchases customers might make in favor of landing the big sale. But lots of loyal customers guarantee cash flow.  You may not recognize it at first, but losing all those smaller sales from repeat customers will hurt more than not converting one big sale.

Teach Your Employees to Care About Your Customers

Not only should your employees know your products or services inside and out so they’re prepared to answer customer questions knowledgeably, but they should learn how to genuinely care about your customers. Let your employees know that you expect them to deliver a superior customer experience, and help them understand why this will make their job more rewarding.

Surprise Your Customers with An Unexpected Gift

Shower your customers with unexpected appreciation gifts, whether it’s a thank you bundle with a coffee mug and product sample or a handwritten “Thank You” card with a special offer. Customers who feel appreciated are likely to remain with you for the long haul, and they’ll repay your kindness by spending more and referring other consumers to your business.

Anticipate Customer Needs

Customers like to convince themselves that they need what they want. Your task to provide what they want and then give them a reason to “need” it. Customer loyalty develops when you predict what your customers need before they know it. For more information on creating customer demand check out these articles:

Connect With & Invest In The Right Customers

It was once said that Nordstrom gave a customer a full refund for a set of tires, even though they didn’t sell tires.  While this may seem like a bad idea, Nordstrom still survives today in a volatile market where most department stores are a thing of the past.

Meanwhile, the online shoe and clothing shop, Zappos, gives customers 365 days to return shoes. Too extreme? Not when you consider that they experienced a $20 revenue increase because of satisfied customers.

One tack shop features plenty of shelf space dedicated to items that hundreds of regular riding customers would never buy. But the business owner understands that the small number of stable owners and riding instructors will buy these items…and when an instructor or stable manager becomes a loyal customer, their riders will follow.  A brilliant idea of building loyalty around loyalty.


While attracting new customers is important, remember that loyal customers spend more, provide free word-of-mouth marketing, and bring you repeat business.

In today’s competitive marketing landscape, “loyalty is the new currency,” says Forbes.

Also published on Medium.

Sherene Funk is the author of the contemporary romance Autumn in Your Arms and two small business e-books. She is a voracious reader who owns more books than she can ever read in this lifetime. A graduate of Brigham Young University, she worked in advertising for many years before moving to her current writing position at Rain Retail Software. She researches non-stop to see what successful retailers do and loves to share what she learns with small business owners.

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