Customer Loyalty Concepts

Loyal customers directly contribute to the success of a business. Not only do they purchase more goods and services themselves, but they help bring in new customers through word-of-mouth promotion. Here is an explanation of some of the most important customer loyalty concepts.

Frequent Communication Builds Trust

People have a tendency to distrust things that are unfamiliar. Of course, the opposite is true as well Ė as people come to know something, they become more trusting and willing to interact. From a business standpoint, this means that customer contact should occur frequently, so customers stay familiar with the company and what it has to offer. The communication can take the form of an email campaign, direct mailing, or television commercial. What matters is that customers feel secure that the company remembers them, and values their business.

Providing Exclusive Information Makes Customers Feel Special

Customer loyalty programs should incorporate the idea that people like to be privy to information that others do not have. After all, it feels good to be an insider. Companies should find ways to reward steady customers with information that has value, and is not yet public knowledge. For example, an online shoe retailer could run a sale that is announced on Twitter and nowhere else. Anyone who does not follow the company on Twitter will miss the sale, which is unfortunate. But, those who learn of the sale in this way will appreciate having their loyalty rewarded.

People Appreciate Businesses that Remember what they Like and Donít Like

Many new cars include a feature that records a driverís preferred seat position, radio station, mirror angles, etc., and automatically sets the car to those specifications when the driver gets inside. The idea is that people appreciate the convenience of only having to make their preferences known once. Companies should take note. Something as simple as recording a customerís preferred payment method, and offering the same method on the next transaction, sends a message that the company will do what it can to make life easier for the customer.

Customer Satisfaction and Customer Loyalty are Not the Same Thing

Of all customer loyalty concepts, this one is perhaps the most misunderstood. Satisfaction occurs when a customer completes a purchase and feels content with the result. The transaction met the customerís expectations, but this does not necessarily mean the customer will return for future purchases. Loyalty, on the other hand, occurs when the customerís experience creates an inclination to return. With this in mind, companies should strive not only to meet one-time expectations, but to leave an impression that will create a lasting relationship with the customer.

Customer Loyalty Programs are Not for Every Business

Before devoting time and money to create customer loyalty, companies should consider the idea that resources may be better spent elsewhere. Consider a bankruptcy attorney. Should that business expend resources on social media and other ongoing campaigns designed to foster life-long customer relationships? Or would the attorneyís customers be better served with a low fee and quick resolution? Obviously, companies that provide one-time services will not benefit from customer loyalty programs to the same extent as companies that rely on repeat business.

Customer loyalty concepts are often derived from basic truths about human psychology. As such, business owners should use common sense, and design loyalty programs that reflect how people like to be treated in everyday life.