The Importance of Loyalty

The Importance of Loyalty

Historically speaking, loyalty has been considered one of the most important things in life. Loyal relationships, loyal customers, loyal business partners, even loyal pets. Likewise, the business world relies on loyalty to generate success.

Loyalty inspires emotional stability and security, encourages lifetime value, and reduces supplementary costs associated with constantly seeking out new customers. In his 2001 best seller about the importance of loyalty, Frederick Reichheld explains that building loyalty is the only way to attain prosperity and create growth.

Of course, new customers are always valued, however a one-time customer does not have as significant an effect in the company’s long-term well-being as a loyal customer does. For example, developing customer retention by only five percent can simultaneously boost profits by up to 25% [1].

The advantages of developing loyal customer relationships are endless! Loyal customers express a strong devotion to the business, actively recommend it to others, and feel an emotional connection with the business’ values. In return, businesses notice enhanced credibility and ease of purchase, easy introduction to new products, and gain a competitive edge in the market [2].

Loyal customers convert to being ‘regulars’ and spend more exclusively with businesses they like, and are inclined to tell others about their positive experiences. Word-of-mouth marketing is a more successful tool at engaging with new customers than traditional forms of branded content and advertising. In turn, these referred customers are also more likely to become loyal customers and consequently spend more than a one-off customer.

The Harvard Business Review tells us that acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one [3]. Retaining loyal customers therefore reduces advertising costs seeking to generate additional customers, while also offering its own form of advertising: loyal customers recruiting new ones.

So, the next time you interact with customers, consider ways in which you can enhance their consumer experience. Always consider their entire journey, rather than the fleeting moment of a transaction. Don’t forget that people will remember how you made them feel for far longer than they will remember what you did for them.

Want to know more about Loyalty Marketing and what Gen3Media is doing? Get in touch and ask about Locify!

 

[1] Bain & Company, Fred Reichheld, Prescription for Cutting Costs

[2] Millennium Agency, 5 Major Benefits of a Strong Brand, 2017

[3] Harvard Business Review, Amy Gallo, The Value of Keeping the Right Customers

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *