14 ways to build customer loyalty

Consider these strategies to build customer loyalty and strengthen your business.

1. Empower employees to solve customers’ problems

When a customer has a problem, they want someone to solve it quickly. If employees aren’t allowed to make decisions on their own, they can’t offer immediate solutions. To build loyal customer relationships, empower employees to resolve small problems without needing to involve a manager.

Allowing employees to address problems directly reduces the time it takes to satisfy a customer. It also strengthens relationships between customers and employees, which may lead to repeat purchases.

2. Create an inclusive culture

In an inclusive culture, employees embrace diverse experiences and perspectives. Team members work together to create a welcoming environment. This promotes customer loyalty by ensuring that all customers feel respected when they interact with your business.

When you have an inclusive environment, employees are also more likely to empathize with others. A high level of empathy makes it easier for team members to relate to customers’ feelings. Over time, this increases trust.

3. Prioritize effective communication

Effective communication reduces frustration and helps customers understand what to expect. Encourage team members to be proactive about communicating with customers. Proactive communication involves anticipating customers’ needs and contacting them regularly.

If there’s a problem, such as a shipping delay, instruct employees to notify the customer right away. Issues are bound to arise, but customers are more likely to remain loyal if you inform them immediately. Instead of waiting for customers to reach out, have team members follow up after every interaction. Providing ongoing support shows that you care.

4. Train employees to deliver excellent service

Delivering excellent customer service requires a unique combination of knowledge and skills. To enhance team members’ effectiveness, provide regular training on topics related to customer service. Here are some ideas:

• Resolving conflict
• Handling sales objections
• Managing customer expectations
• Product demonstration
• Active listening

Consider having monthly or quarterly training sessions to remind employees of your company’s policies. If team members understand your policies, they are more likely to deliver a consistent experience, which increases customer loyalty.

5. Respond to customer feedback

When customers provide feedback, aim to respond quickly to show appreciation. If you receive a positive comment, thank the customer for their input and let them know you remain committed to meeting their needs.

Negative reviews may sting, but they also provide valuable information about your business. If you receive negative feedback from a customer, thank them for their input, acknowledge their concerns and explain how you plan to resolve the issue. Use this template if you’re not sure what to say:

Dear [Customer Name]:

Thank you for informing me about your experience when you visited the store on June 13. I’m sorry that we didn’t have your favorite item in stock. We understand how disappointing it is when you can’t find the item you need.

To prevent this from happening again, I’ve instructed our inventory manager to perform item counts weekly instead of monthly. I’ve also authorized them to place orders more frequently to prevent items from going out of stock.

Thank you again for sharing your feedback. We look forward to seeing you the next time you visit [Company Name].

Sincerely,

[Your Name]
[Your Title]

6. Understand your customers’ expectations

Before you can deliver excellent service, you need to understand your customers’ wants and needs. If you have a brick-and-mortar presence, observe customers as they browse. Pay attention to how customers behave when comparing products or interacting with your employees.

If you operate an online business, use website analytics to learn more about your customers’ habits. Analytics can tell you which pages on your website are the most popular and how long customers spend on each page, both of which provide valuable insights into customer behavior.

Many companies also use customer surveys to gather data. Consider sending out a survey if you need any of the following information:

• Are there any important features missing from our products?
• How much are customers willing to pay for a new product that addresses a specific problem?
• Would you recommend [specific product] to your friends or family members?
• What was your main goal during your last visit?
• Do you have any concerns about using our products or services?
• Why did you choose to buy from us instead of another company?

7. Educate customers on your products or services

Customer education has several benefits:

• Reduced support costs: When customers understand how to use your products or services as intended, they need less support. Over time, this may reduce the amount of money your company spends on support activities.
• Increased customer satisfaction: If customers don’t encounter error messages or other problems, they are more likely to be satisfied with your company and its offerings.
• Faster onboarding: Onboarding helps customers recognize the value of your product or service. Education is an important part of this process, as it helps customers avoid common mistakes and understand how to troubleshoot any issues they encounter.

Educating customers also shows them that you care about their needs, which helps build loyal relationships.

8. Align your business strategy with your customers’ needs

Your business strategy is the plan you follow to achieve your company’s goals. It’s easier to reach your goals if your strategy is aligned with your customers’ needs. For example, if your customer base consists of budget-conscious individuals looking for low-cost solutions to their problems, the strategy of offering a premium product at a premium price may not be the best approach.

Aligning your strategy with your customers’ needs fosters loyalty by showing customers that you care about what matters to them.

9. Implement a CRM system

Customer relationship management systems simplify the tasks of sales and customer service professionals. By implementing a CRM system, you can consolidate all customer data in one place, ensuring that team members are aware of individual needs and preferences.

Many CRM systems also automate routine activities, reducing the time it takes to respond to customer inquiries. Faster response times may lead to increased loyalty.

10. Encourage ethical behavior among employees

Ethical behavior isn’t just a compliance issue. It can help you build loyal customer relationships by fostering a culture of transparency. In an ethical workplace, team members are honest and transparent about their intentions. Ethical behavior also helps your company establish a positive reputation, which may attract even more customers.

11. Demonstrate your appreciation for customers

Unless your company sells a unique product or service, customers have multiple buying options. When you show appreciation for their business, customers are more likely to choose you instead of seeking similar products or services elsewhere. Over time, this translates into increased loyalty.

Need inspiration? Here are some ways to express your appreciation for customers:

• Send a thank-you note. If a customer makes a large purchase, send them a handwritten thank-you note within a few days of the sale.
• Celebrate important milestones. Show appreciation by celebrating customer anniversaries and other significant milestones. Send a card, offer a discount or give the customer a gift for each occasion.
• Hold a customer-appreciation event. Invite customers to participate in a fun experience sponsored by your business. If you serve food and drinks, ensure you have enough for everyone.
• Feature customers in your newsletters and other company communications. Featuring customers in your company communications makes them feel special. If you have a newsletter, consider publishing a monthly customer profile. You can also include customers’ photos and testimonials in your brochures and other marketing materials.

12. Personalize each interaction

Personalized interactions build loyalty by showing customers that you care about them. If your business has a physical presence, instruct employees to greet customers by name whenever possible. Prioritize learning as much as you can about customers, such as the names of their pets and the hobbies they enjoy. Incorporate this information into each interaction.

If you communicate with customers via email, use their names instead of “Dear Customer” or “Hey, Friend!” when sending a message. Many CRM systems have personalization tools, allowing you to greet customers by name without sending individual emails.

13. Create a referral program

Loyal customers are more likely to refer their friends, family members and colleagues to your business, making referral marketing an important part of your strategy. A referral from a satisfied customer serves as a vote of confidence in your business. Prospective customers tend to trust referrals more than advertisements and other promotional materials, making them more likely to buy from you.

Referral marketing also rewards loyal customers, strengthening your relationships. Use these tips to create a successful referral program.

• Offer valuable incentives. If you provide an incentive, ensure it’s something your customers value. Consider offering a gift card or a significant discount.
• Get into the habit of asking for referrals. Loyal customers may be willing to promote your business, but they sometimes need a reminder. Instruct your team members to ask for referrals at the end of every interaction.
• Promote two-way discounts. A two-way discount rewards loyal customers and those they refer. For example, you might offer 20% off to both the referring customer and the new customer. Both individuals must make purchases to qualify for the discount.

14. Build a community

Customers are more likely to be loyal to your business if you offer them a community instead of just another place to shop. In a brand community, customers have regular opportunities to interact with each other and with company representatives.

Disney is a great example of a company that has built a community around its offerings. Instead of merely selling park tickets and merchandise, Disney hosts cosplay meetups and other events designed to increase customer engagement. The company also empowers its employees to create positive experiences.

To build a community around your business, ensure it’s easy for customers to connect with brand representatives. Consider using a chat service to answer customer questions or respond to their feedback. You can also set up a forum on your website or hold special events for customers.

Frequently asked questions about building customer loyalty

Here are answers to some of the most common questions about building customer loyalty.

What are the four C’s of customer loyalty?

The four C’s of customer loyalty are communication, connection, control and choice. Proactive communication builds trust and helps customers understand what to expect. Thoughtful, personalized experiences help you build strong connections with your customer base.

When customers buy from you, they expect some level of control over the purchase, such as the ability to opt out of your email newsletter when placing an online order. Choice refers to the number of options customers have when engaging with your company.

Why is customer loyalty important to a business?

Customer loyalty is important because it often leads to repeat purchases. Loyal relationships can also help you save money, as it generally costs less to retain a customer than to acquire a new one. Loyal customers may even refer others to your business, helping you generate more revenue.

How can you track customer loyalty?

Several key performance indicators make it easier to track customer loyalty. One is the churn rate, which describes the number of customers who do not make repeat purchases. A declining churn rate indicates that customer loyalty is improving.

You can also track recency and frequency. Recency indicates how long it’s been since a customer last made a purchase from your company. Frequency refers to how often the same customer buys from you. Increases in recency and frequency are associated with greater customer loyalty.