Did you know that it’s 6-7 times more cost effective to keep a loyal customer than to acquire a new one? Not only that a loyal customer buy’s 90% more often and tend to spend 60% more than a new customer. In other words creating customer loyalty is a much smarter strategy for a business than employing all efforts to acquire new customers. Thus businesses need to focus on improving their customer satisfaction, ensuring that they should come back.
What Is Customer Loyalty?
Customer loyalty refers to the willingness of a customer to repeatedly purchase or work with a brand. It is based on the customer buying experience, customer satisfaction and the value or benefits that a customer gets from the brand. It is the ability of a brand to retain its customers and create a loyal customer base who willingly choose its brands over others.
Why Is It Important?
Customer loyalty plays a key role in a company’s overall success. It subsequently leads to brand recognition and growth. According to a research by Harvard business review, there can be a 25-95% increase in profit as a result of 5% increase in customer retention.
There are various direct and indirect advantages of customer loyalty to a business. These are listed below:
- Increase in revenue as well as profits
- Cost effective way
- Enabling personalized experience
- Stronger relationships with the customers
- Positive word of mouth
- Happy customers become brand ambassadors
- Enables to accurately forecast sales
- Brand recognition leading to new customers
Psychological Tricks To Create Customer Loyalty
Ideally the product itself and its quality should have been enough to bring the customers back to the brand. But the situation in this era is changed due to globalization and intense competition in the market. Now brands need to make tactful efforts in various aspects in order to gain and retain customers. However the product remains the foundation of all these efforts.
Human behavior doesn’t seems to be steady and uniform, allowing marketers to use psychology as a tool to captivate customer attraction, attain customers and create customer loyalty.
Below are five very useful psychological tricks that you can easily leverage in your social media marketing efforts to achieve customer loyalty?
- Become a thought leader: It is having the credibility, authority and expertise in a specialized field, sought and recognized by others as well. It is a way used by brands to market themselves as a leader in the particular industry. People when buying products seek out opinions to which they can trust. They look for product related information and its reviews. Hence providing related information and creating relevant content that positions you as an expert in their mind is a proven way to gain customer loyalty.
- Offer Frequent Rewards: Giving your audience gifts is a sweet gesture that they will reciprocate for sure. Exchanging gifts is believed to make the bond even stronger. On the other hand gifts do not need to be extravagantly expensive because it’s the thought that counts!
These little gestures includes a percentage discount in return of subscribing to latest news or giving a free service on client’s birthday. This will create positive emotions for the brand and customer will want to come back again.
- Label Your Target Audience: It is human nature to like being labeled or to belong to a specific group as long as it makes them different and superior in any way. Customer loyalty programs that have different classes are way more successful as they have different classes. Customers like to be labeled as gold members and they tend to get excited for points even when those points have no monetary value.
So labeling your customers will enable them to make the desired action and get associated with the brand.
- Symbolize Colors for Value: Colors portrays emotions and messages and helps people to relate to a specific object or feeling. Using colors to deliver your brand message and symbolize your brand value is an effective way to make customers return to you. It can significantly increase brand recognition, leading to customer loyalty. An appealing logo paired with strong color scheme can attract customers and create brand recall.
- Consistent Social Presence: “Out of mind, out of sight.” You certainly don’t want that. In order to bring them back again you need to be remembered by them and for that you must be in their news feed. It’s as simple as that. Having a consistent social media presence not only results in brand recall. But it also enables brand to become more familiar and trustworthy.
Generating a loyal customer base is the key to success for brands. However with the increasing competition it is becoming a great deal of a task to retain customers. Customer loyalty has immense benefits from increasing revenue and enabling brands to provide a personalized experience to positive word of mouth and brand recognition.
Incorporating psychological tips to your marketing efforts can result in greater customer loyalty and stronger customer relationships.
These tips include establishing thought leadership in your industry offering rewards and gifts to customers to create positive associations. Labeling customers makes them excited and encourage them to take desired actions. Moreover colors plays a crucial role in triggering emotions and creating brand recall. Lastly having well maintained social media platforms and posting content regularly enables brand to bring their customers back again and again.