Surely we should make as much money out of our customers as possible?
Actually, this should not be the number one goal in the mind of any business. We are far more likely to grow our sales by giving. This may sound like a counter-intuitive idea but, in reality, giving can be VERY profitable.
One of the best-giving strategies is to focus on your best customers and make them (even) more loyal. If you follow this approach it can have a huge effect on your business. We will show you the statistics that prove this in a little while.
This is why all businesses should focus on customer loyalty
If you concentrate on building loyal clients you will build a far greater bond with your customer base. They will view you as a company that they have a true relationship with. They will often go out of their way to help you and to buy more from you. In return, if you get things right, you get to grow your sales pipeline and you end up achieving higher sales.
Companies that focus on making the most out of each individual sale may actually end up with less turnover and profit. Their customer base will treat them as a commodity supplier.
Here are three more reasons why customer loyalty is so important
1. It is more expensive to acquire new customers rather than to retain existing ones
Depending on which research you read, it is typically seven to twelve times more expensive to win a new customer than it is to keep one you already have. The last thing you want is a customer who doesn’t feel loyal and moves off to a competitor. That leaves you with a costly sales problem.
2. Loyal customers want to place more business with you
The right existing clients are keen to spend more with you. This can happen simply because they have built trust in your brand. They like you and feel safe with you. But, with the right incentives, you can also win over those who are not quite yet at that point of trust so that they become loyal too.
3. Loyal customers become your advocates
A good customer can be your best sales channel. Word of mouth is a powerful way to persuade new customers to try you out. People trust their personal network. They are far more likely to take advice from friends and colleagues than to follow advertising or listen to salespeople.
Here’s how Where The Trade Buys have managed to achieve impressive growth figures through customer loyalty
Online printing company Where The Trade Buys makes a point of rewarding their most loyal customers. They make sure that regular customers are regularly rewarded with a set of valuable benefits.
Here’s how it works. If a client spends £300 or more in a month they become a Rockstar customer. Not only do you receive a Rockstar certificate and mug, you also receive royalty points and riders that you can use the following month. The royalty points give a reduction on the cost of print purchased. The Rockstar riders are valuable free benefits, such as free upgrades to next day delivery, manual artwork checks and video file copies.
Customers start at Elvis and can work all the way up to Jagger. Each level of Rockstar is achieved with a higher monthly spend and rewarded with a greater level of royalty points and riders. Rockstars also benefit from one-off benefits as well. For instance, this January Rockstars receive an extra 50% royalty points for the work that they place in the month, giving them a great start to achieving their 2019 budgets.
This sounds great for their customers. But what’s in it for Where The Trade Buys? The figures show just how successful this programme is. In the past twelve months the average Rockstar spend increased by 36%. That’s a very worthwhile gain given that Rockstars represent 80% of the company’s sales revenue. Where The Trade Buys have increased the number of Rockstar customers by 41% over the last twelve months and their total Rockstar turnover has grown by 92% over the same period.
Here’s what CEO Gary Peeling has to say about the Rockstar programme:
“It’s easy to make the mistake that e-commerce customers just like to shop around. In actuality familiarity, trust and confidence in products and services mean they actually prefer to stay. However, it has to make commercial sense. Our Rockstar programme was designed on the simple premise that our best customers should get the most support and best prices. Investment here rather than in acquisition is better for them, improving their margins and stretching budgets, and better for us.
Our Rockstars represent 80% of our total sales, increasing the number of Rockstars and their individual spend is the fastest and most sustainable way to grow the business.”
This is a compelling commercial case for creating a customer loyalty programme
Where The Trade Buys has created a fantastic win-win situation. Their regular customers win out with valuable rewards and help for them to grow their businesses. Where The Trade Buys wins by growing sales dramatically. That has to be good for everyone.
If you do not have a customer loyalty programme, isn’t it time you started creating one?