Customer loyalty can be defined as an emotional connection customers have to your brand, which inspires them to consistently choose your brand over the competition. Customer loyalty can be measured in several ways, such as:
- The percentage of customers making repeat purchases.
- How long the average customer remains a buyer of your products.
- The amount of money the average customer spends with you.
- Whether or not customers provide referrals or share positive testimonials and reviews.
- Whether or not customers buy exclusively from you.
- How satisfied customers are with their buying experience.
How do you gain customer loyalty?
In order to gain customer loyalty, you have to understand what customers expect – and deliver on it. You have to consistently exceed their expectations. Having a quality product and providing exceptional service is a must. But that, by itself, won’t sustain customer loyalty. Quality, price, and convenience are factors that drive rational loyalty. As soon as a competitor provides a comparable product at a lower price, customers who buy from you because of those factors will jump ship!
Instead, you need to focus on creating a positive emotional impact on customers in ways they’ll remember and associate with your brand.
Below are 13 steps you can take to start building customer loyalty and improve customer retention.
1. Find ways to enhance your value proposition.
In order to stay ahead of the competition, you have to continuously find ways to enhance and expand your value proposition. This includes improving factors that build rational loyalty, such as your product quality, customer response times, and speed-to-market. But it also includes value-adds that drive emotional loyalty, like launching a customer rewards program or inviting top accounts to enter for a chance to win an exclusive group incentive travel event. It’s easier for customers to be loyal when they feel like they will continue to benefit more and more the longer they do business with you.
2. Differentiate yourself from the competition.
How easy is it for customers to understand what makes you different from the competition? Focus on what you do well and show it off! You can help your company stand out even more by providing perks, rewards, services, and other value-adds that your competition doesn’t.
3. Create ecosystems of influencers who impact how customers view your brand.
Your customers’ perception of your brand doesn’t exist in a vacuum. Their opinions are swayed by media coverage, publications, showroom sales reps, dealers, reviews, the people they know… The list goes on! Trust is a major component of customer loyalty, and customers are much more likely to trust your brand if they hear about you positively from someone whose opinion they value.
4. Help customers stay connected.
One of the trends driving customer loyalty is the fact that customers want to be able to connect with brands on their terms. This means that you need to offer digital hubs and mobile platforms where customers can interact with your brand and learn more about your latest promotions. Fully integrating your customer loyalty program with your website, e-commerce platform, and mobile app is a great place to start!
5. Enable customers to learn more about your brand.
Customer enablement can be a powerful tool for building customer loyalty. This means taking the time to educate your customers, providing support, and making that learning experience fun and interactive.
6. Engage customers and communicate with them consistently across every touchpoint.
Your customers have busy lives. In order to build loyalty, you have to stay top-of-mind. This means being able to fight through the clutter to engage your customers and communicate with them effectively. Today, this requires loyalty marketing that is omnichannel, relevant, and personalized.
7. Leverage data to personalize your customer interactions.
Personalization is a proven strategy for building customer loyalty. Customers want to feel special and like their contributions to your brand are valued and recognized. However, in order to personalize your customer interactions, you need the right data. Investing in loyalty software for collecting, organizing, and interpreting customer data will pay dividends down the road.
8. Provide support at each stage of the buyer’s journey.
No matter where customers are in the buyer’s journey, you need to be there for them. That means providing education, engagement, and support at each stage of the process. Investing in your customers at each stage of the customer journey will help you build customer loyalty in the long run.
9. Follow through on your commitments to build trust.
Throughout the buyer’s journey, set realistic expectations and follow through! Failure to do so will damage trust and jeopardize customer loyalty. You want to be a supplier customers can count on. But if you can find ways to go beyond your commitments, and add unexpected bonuses and value-adds, that’s even better!
10. Set clear goals for growth.
Many customers enjoy having a sense of progress. Help make expectations crystal clear by offering incentives and rewards for setting goals that customers can work towards. You can even provide goal-tracking software and let customers create wishlists for when they achieve their goals!
11. Take ownership of your mistakes and make it right.
Mistakes are inevitable. What matters is what you do to make it right. Building customer loyalty means honoring your commitments, taking responsibility for the customer experience, and doing what it takes to make it right. Offering incentives to unhappy customers can be a way to show customers that you are committed to providing them with an exceptional experience and that you’re a brand they can trust.
12. Reward your most loyal customers.
How often do you take the time to let your top customers know how much they mean to you? Customer rewards and recognition deepen loyalty and give your customers a memorable, emotionally impactful experience they will associate with your brand!
13. Give customers a chance to share feedback.
Finally, if you really want to know what customers expect and understand what drives their loyalty, why don’t you ask them? Taking the time to send out surveys to customers is a great way to gather insight, collect data, and make them feel like their opinion matters. You can use this data to start back at Step 1, refresh your program, and improve your loyalty marketing that much more!
How Do You Measure Customer Loyalty?
Finally, if you are taking steps to gain customer loyalty, it’s important to measure your results. This means identifying KPIs and using loyalty software to monitor customer engagement, pull reports, and calculate ROI. Being able to make informed design decisions, backed by data, is essential for building customer loyalty. And, if you really want to ensure the success of your customer loyalty program, entrusting an innovative company with a proven track record (hint, hint) can make all the difference!
In a 2013 article, Nielsen reported that advice from family and friends was the most trusted source for people looking for information about new products. In other words, the best way to promote a positive image for your brand is to create loyal customers and inspire them to talk about your products. According to Vala Ashfar, Chief Customer Officer and CMO at Enterasys, “Your brand is what people say about you when you leave the room.”
So how do you motivate customers to tell their family and friends about your brand? By giving them something to talk about—something that distinguishes your brand from the rest. Many organizations use customer rewards programs, like those offered by Incentive Solutions in Atlanta, to capture customers’ attention and create stronger, ongoing relationships with them.
Now, we’ll discuss ways that customer rewards programs keep your brand on the forefront of customers’ minds.
Facilitating Positive Brand Association
Online reward programs offer you the ability to develop a more positive reputation with your customers in these ways:
You already know you have a great product for customers to buy or distribute. With a rewards program, you can attach a positive experience to those products. Some loyalty program providers, like Incentive Solutions in Atlanta, offer 24-7 turn-around and customer support is always available via email. They also offer a diverse range of rewards and fair prices due to direct dealings with vendors.
Everyone loves rewards. Being able to earn fun items like concert tickets, home furnishings, and sporting goods through your reward program will increase the positivity associated with your brand. Contractors, for instance, will begin to look forward to receiving rewards whenever they push or upsale your products.
Branded Reward Program
Many incentive companies set up your program in the form of an online rewards website. You can brand this site, or incorporate it into your company’s existing site if the reward program’s coding is sophisticated enough.
In order to effectively promote your brand, channel partners need to be informed about your products. Sophisticated online reward technology often has the capability to act as both a communication platform, educational training tool, and rewards system all in one. Mobile app technology allows you to send instant two-way push notifications to alert your customers to new promotions and products.
The more customers associate their enjoyment with your brand, the more likely they are to share these positive experiences with their friends and family.
Giving Customers Rewards Worth Talking About
People already prefer online environments for activities like shopping and social networking. Using robust reward program technology, users’ program points (or cyber currency) can be redeemed for merchandise items and event tickets in an extensive online catalog with millions of items. When customers’ shopping experience is as familiar and fun as a trip to Amazon or Overstock, they will want to accumulate more points and earn the most desired items on their wishlists. And what will they want to do when they finally receive a reward they purchased after months of saving up points? Talk with their friends and loved ones about that exciting reward and how your loyalty program helped them earn it.
Loyalty program rewards also allow opportunities for managers to reinforce positivity in their relationships with partners and customers with rewards. Jerry Ryan, Account Executive at Incentive Solutions, says,
“One of my clients recently offered a contractor in his program enough points to earn a TV. He’d almost earned enough on his own; he just needed a few more points to make up the difference. Those are the kinds of interactions that endear customers to you and your brand.”
Not only are rewards themselves excellent conversation-starters, but they add further fuel to that vital fire that makes customers so talkative: positive brand association.
Reaching New Customers
For manufacturing brands that are involved in channel sales, you may have many customers (such as distributors and contractors) with whom you’ve never even communicated. They don’t talk about your brand because they don’t know who you are. With a customer loyalty program, however, you can market to dealers who have relationships with your distributors, end-consumers who have relationships with your contractors, and anyone else in your distribution channel.
By using reward program technology that offers open enrollment, you can reach customers who otherwise may not ever contact you. Open enrollment allows anyone to register into your program and begin receiving awards. Now, not only do you have a relationship with these previously unknown customers, but that relationship is already rewarding. These customers you didn’t even know you had can now earn discussion-worthy rewards and have a positive association with your brand.
Gaining customer loyalty isn’t something that happens overnight. Customer loyalty is built with every single customer interaction. Every sale, customer support exchange and conversation between a customer and your employee counts. If you have indirect resellers and/or distributors, they represent your brand. Interaction with them determines customer loyalty, too. Follow the guidelines in the infographic below to gain more control over your customer loyalty and retention rate.
In the past few years, companies in the B2B industry have experienced an awakening: they need to develop customer loyalty strategies that appeal to customers’ emotions and personal values. As business technology rapidly evolves, markets overflow with competition, and millennials concerned with corporate responsibility begin to make up the majority of B2B buyers, B2B brands must go beyond the cold, hard facts of commodities. Gaining the customer loyalty competitive advantage requires connection to customers, human to human. How do B2B brands do that? Here are four solid ideas to start with:
1. Develop a loyalty program that aligns with an overarching customer retention.
Today’s B2B technology—from CRM and marketing automation systems to sales enablement and channel management software—allows you to develop detailed customer profiles. You can segment customers by interest, region, order amount and frequency, and growth potential.
With all this customer data and segmentation capabilities, you can configure your marketing and communication to be highly relevant to individual customer needs and interests. If your loyalty program is a one-size-fits-all system where all customers receive the same rewards for doing the same things, you’re behind the times. Modern loyalty software allows you to segment program participants into different groups or tiers, targeting them with sales promotions and reward opportunities that best suit them. Run a sales promotion for a powerful heating system in cold dealer regions, for example, while you simultaneously run a promotion on HVAC coolant in warmer regions.
You can also reward customers for more than just selling products. Reward customers for completing training and education, submitting feedback and surveys, or celebrating special occasions like birthdays and anniversaries.
With a flexible customer loyalty system that can integrate with your CRM or corporate website, you can use the program to reinforce your value to customers, solidifying emotional and personal connections.
2. Use trustworthy channel technology and be transparent about customer data.
Surrendering professional and personal data to companies is becoming more and more normalized, but most customers still aren’t comfortable with it. A recent PWC customer intelligence study found that 76% of customers say sharing their personal information with companies is a “necessary evil.” The study also found:
- 67% of global consumers say they have little to no control over how their personal data is used.
- 34% say that one or more companies holding their data have had a security breach.
- 85% say they wish there were more companies they could trust with their data.
- 83% wish for more control over their own data.
Ensure that any channel technology storing your customer’s data, whether it’s in-house or third-party, is secure. The data should be encrypted and that encryption should be tested and approved by tech security experts.
You can build customer trust and show that data security is a core corporate value by simply being transparent. Be upfront with customers about how their data is used, whether it’s shared, and how it’s shared. Promise that you will not sell customer data to third parties. This transparency will earn your customers’ trust and play a major role in building your customer loyalty competitive advantage.
3. Balance automation and personal contact for a better customer experience.
The capabilities of today’s automation technology are pretty amazing. It can be tempting to automate as much as possible. You can deliver everything from email marketing and sales follow-ups to customer support and product information using little to no man-hours. But should you? A 2020 Walker Info report on B2B customer expectation says that you should think it through:
Determine where personal contact adds value. Building and maintaining strong customer relationships requires a balance between personal interactions and digital experiences. B-to-B must determine which parts of the journey can be automated to promote ease and those that still require personal contact.
Customers may appreciate an automated email containing specific information they requested through an online contact form, for example. But what about when they have a complex issue with one of your products? You don’t want customers to feel that they’re always interacting with a machine, rather than a real, trustworthy representative of your brand. Automated communication should be used strategically to enhance the customer experience, which builds customer loyalty.
4. Build customer loyalty and confidence by giving customers the right info at the right time.
In 2020, Gartner released a B2B buyer study that revealed something interesting: customer satisfaction isn’t the strongest driver of account growth. What is? Customers’ confidence in themselves and their ability to make good buying decisions. Account growth is 2.6 times more likely when confidence is present.
Information is one of the best ways to build customer confidence. Many B2B brands take this to mean that they should unload as much product, white paper, case study, industry news, and technology specs onto customers as possible. It turns out, there’s an information tipping point. A 2019 B2B buyer journey study found that 50% of B2B customers are overwhelmed by the amount of trustworthy information they encounter in their purchasing decisions.
Rather than dumping a bunch of information on customers, deliver specific and relevant content to them throughout their customer lifecycle. Understand their unique needs, their relationship with you, and how you can be as helpful as possible. Building a detailed customer profile with integrated channel technology and maintaining a close-knit relationship with customers will allow you to figure out what information is most useful to them.
When loyalty programs first entered the marketplace, they were rare, diverse, and few companies offered them. They were like a breath of fresh air because they finally gave companies a way to build quality relationships with customers. Fast-forward thirty years later, customer loyalty programs are everywhere. But, through the years, the trend has sadly been to take the focus off of building real customer loyalty and place it on generating discounts. Companies spend more money creating discounts than almost anything else, which means they’ve lost their way. This is not what these programs were created for. They were designed to create long-lasting relationships between a company and its customers and to bring value to each party involved in the customer loyalty program. So how do we get back on track and build customer loyalty the right way?
Incentive program administrators and the incentive industry in general need to adapt a new attitude toward building real customer loyalty by focusing on an experience that alters your customers’ emotions and behaviors toward your products and services. An experience is a complete package, and a customer loyalty program is just one ingredient in the recipe. You don’t bake a cake and expect the eggs to do all the work, so you shouldn’t expect a customer loyalty program to prop up all other areas of your business that need to be functioning properly.
But what does real loyalty look like and where does it come from?
Your customers will return to your business and remain loyal as long as they understand your brand’s promise, you deliver on that promise every time, and the end of every transaction is regarded as a positive and enjoyable experience. It can’t just be satisfactory, it has to be positive and enjoyable or your competitors may sweep them away from you. Obviously, you can’t depend on a customer loyalty program to do all of this for you.
How do you create a complete customer experience?
The first thing you need to do is evaluate your business from your customer’s perspective. Find out what’s likable about your business and what may be causing your customers to go elsewhere. If you operate a warehouse, do your customers feel like they have to just stand around while you get their product? Or if you’re shipping to them, is there any way you could enhance your packaging or associated paperwork to be more inviting and personal? These are the kinds of things you have to evaluate to build a real experience. If you have a loyalty program in place, this is also a great time to evaluate its place in your customers’ day. Is it a burden and difficult to log into or navigate? Is the method of earning and receiving points straightforward and simple? The slightest speed bump or inconvenience can quickly sour an experience for a customer, even if it’s the load time on your reward program’s website.
The next thing you do is evaluate how you and your staff communicate with your customers. Do your customers feel like they have a voice in your “relationship,” or do they feel like you’re the one who does all the talking? Opening up a two-way line of communication can greatly increase the loyalty your customers feel toward your brand. Nobody wants to be in a relationship with someone who only talks about themselves, so don’t expect your customers to feel any differently. Also, giving your customers a “voice” in your company makes them feel invested. When you feel invested in something, especially a business, you’re more likely to continue your involvement with it.
If you do have a customer loyalty program in place, ensure that your reward mix is appropriate for the business your customers are giving you. If they’re spending tens of thousands of dollars with you and you give them a watch or the equivalent in points in return, chances are they’re not having an optimal experience with your business. If the reward you offer for the business received is unbalanced, your customers may feel shorted and could go to your competition.
Your B2B competition wants your customers’ loyalty. It’s happening, you can’t deny or escape it. They’re always there, hot on your heels, finding new ways to stand out and change the rules of the game. But you can devise a plan to outpace them. The first step is to stop being afraid of competition in customer loyalty program offerings. Fear causes you to make over-cautious or reactionary, drastic decisions. That’s what your competition wants: to get in your head and trip you up. Don’t give in! Face the realities of today’s B2B customer loyalty challenges head-on:
B2C influences the expectations of B2B customer experience.
All your B2B buyers are also B2C buyers. So are you. How do you feel when you check your Amazon Prime order, only to see it hasn’t left its last shipping destination after a week? How about when you step into an Uber ride and the car smells fresh, the driver is friendly, and you get to your destination quickly?
As user experience (UX) expert Andrew Kucheriavy explains in Forbes, B2C purchases aren’t just about products anymore, but experiences. This has caused a shift in B2B customers’ expectations. While B2C companies like Amazon, Uber, and Netflix offer personalized, convenience, and lighting-fast B2C experiences, the B2B customer experience doesn’t compare. Kucheriavy says:
I find that most B2B websites are too organization-centric, suffer from poor information findability and discoverability, and are too fragmented, too cluttered and too confusing to users.
To maintain customer retention and customer loyalty, B2B companies will need to offer more B2C-like customer experiences.
B2B customers aren’t front and center.
Let’s get the fear-mongering stats out of the way: you’re at risk of losing 69% of your B2B customers at any given time, according to a 2019 Gallup study. This can’t be blamed entirely on increasingly overcrowded B2B markets and part-time customers. The problem is a lack of customer centricity.
While B2B companies are marketing their features and benefits, analyzing monthly reports and dashboards with a fine-toothed comb, they are drifting farther away from solving their customers’ actual problems. Per the previously mentioned Gallup study:
To understand how customers really feel, B2B companies must also embark on qualitative journeys, which means having actual conversations with customers. For B2B companies, quantitative metrics can help identify customers’ needs, but that’s not enough.
The digital revolution isn’t coming. It’s here.
It’s been a much-discussed topic in B2B thought leadership, think-pieces, webinars, and conferences for years: the millennials are coming, with their smartphones, social media, and expectations of an easy, digital buying experience. Millennials are now estimated to make up around 73% of B2B customers.
In addition to the shift in B2B buyer demographics, there’s the COVID-19 pandemic. As I’m sure you noticed, it sped up the digitalization of many industries in a way no one predicted. McKinsey research into the pandemic’s effect on B2B found the following:
- Sales leaders rate digital communication channels twice as important as they were pre-pandemic.
- Customer preference for digitally interactions shot up significantly, with customer engagement with mobile apps, social media, and online communities increasing sharply.
- B2B buyers reported a strong preference for self-service.
- Suppliers who provide outstanding digital experiences to their buyers are twice as likely to be chosen as a primary supplier than those providing poor experiences.
Those are the challenging realities of today’s competition in customer loyalty. Take a deep breath. You’re actually a lot farther along now than many B2B companies: you’re aware of and have accepted the harsh realities you’re facing.
Today’s economy is rife with competing markets. Industries hobbled by the recession are picking up steam again, turning our business world into one in which companies need to rise to the top faster than everyone else. How do you gain customer loyalty under those kinds of conditions? One of the best ways you can distinguish yourself from your competition is by sweeping customers off their feet. How can you do this? By understanding what your customers want and how to best communicate with them. Think of customer services the same way you think about any serious, long-term commitment: sometimes you have to sit down and have “the talk” about where your relationship is going.
Every customer base is different and must be handled according to their unique needs. As a manufacturer, your customers may include dealers and distributors along with contractors and end consumers. In channel sales, each member has their own individual or organizational goals. Although specific needs and desires vary from customer to customer, they share many “commitment issues” common in today’s society. Incentive programs act as the “relationship therapy” tool you need to overcome these common customer issues:
“I just don’t have time for you right now.”
Most households these days are crunched for time. In 2014, CNN reported that Americans took less vacation time than they have in decades. Time has become a valuable commodity in our culture, causing people to gravitate toward time-saving options like mobile apps, online communication, and automated self-service. People want to take care of their own needs, on their own schedule, whenever they can (Kumar, V., Reinartz, W., 2012).
Lack of time also means that customers—be they dealers, distributors, contractors or end-consumers—aren’t educating themselves on your products. For industries like industrial distribution, aftermarket services like upgrade and replacement parts demand continuing product knowledge after the initial sale.
Incentive programs can help consolidate your and your customers’ time. Companies like Incentive Solutions offer their incentives programs through online software that can be integrated with your company website so that it fits in seamlessly with your website’s design and wireframes. Programs can be accessed online or through a Mobile App module. This saves time, allowing participants to log in whenever they want. You can use a Channel Sales program to reward distributors, dealers, and contractors for pushing your product, then your participants can enter sales claims instantaneously with a Performance Tracking module.
Participants can also earn rewards by taking quizzes and surveys through a Learn and Earn module, making it worth their time to spend a few moments educating themselves on your products. These features automate the sales claims reward process into an easy, 24/7 medium.
“I found someone more interesting through social media.”
Social media has become more than just a way to waste time looking at friends’ cat pictures on Facebook. People stay in contact with long-distance relations, read feeds from news sites, and track the activity of their favorite brands. With global access to opinions, word of mouth is an even more widely-used method of product and service recommendation. People often investigate businesses and make their decisions based on Google Plus, Yelp, and Glassdoor reviews. If your brand has no social media presence or isn’t interactive enough with potential clients online, it could cost you new business.
The social media aspects of an online reward program open up communication routes between you and those in your sales channel. You can allow sales teams to access a ranking system via the Leader Board module, or allow Open Enrollment so that anyone involved in the movement of your product can register for awards. This gives your customers the information, control, and choice that make social media so popular in our culture.
“I’m just not that into you.”
According to a 2011 AMP Agency study, only 4% of people between the ages of 25 and 49 said they were brand loyal (Kumar, V., Reinartz, W., 2012). Since then, information availability and brand choice have only continued to increase. Dealers, distributors, and contractors are constantly asking themselves, “Why should I go into business with this particular manufacturer?” The brands that stand out to them are those that are transparent and trustworthy.
With a B2B customer loyalty program, you can inspire B2B partners to continue doing business with you by rewarding them for ongoing purchases. When they receive recognition and rewards for promoting your brand, they know you are interested in a mutually lucrative partnership, not just silent exchanges and endless product pushing. Passing along the rewards of increased sales shows off a spirit of openness and collaboration.
With these things in mind, you have an idea of what a potential customer or business partner expects from you and in which direction your relationship needs to be headed. It’s up to you to push the relationship to that ideal, cozy place where you’re both benefitting. After consulting with an incentive program provider like Incentive Solutions, you can address time poverty, social media, and loyalty challenges with a single platform. As Steve Damerow, CEO of Incentive Solutions, advises,
Thank your best customers to keep competitors away. Customer loyalty rewards are like insurance for your efforts as an organization. If you don’t buy the insurance, you pay the price.
Today’s customers can be challenging for manufacturers to romance. They are busy, swamped in information, and they have many suitors to choose from. The best way to win their attention is to listen to their concerns, understand their needs, and find ways to facilitate an exchange of communication and appreciation. Incentive programs can help you woo customers and B2B partners with easy-to-use, online interfaces and engaging, informative features.
As today’s B2B markets fill with technology, competition, and constant disruption, it’s easy to get swept up in the newest marketing buzzword or platform. The strongest customer loyalty competitive advantage combines the power of advanced channel technology with helpful, one-on-one connections. Remember that tools and technology are there to reinforce a cohesive, customer-centric strategy, and you’ll have a clear path to customer loyalty.