A guide to building customer loyalty: 3 brands to learn from
Updated: Jan 28, 2022
No matter what industry you’re in, customer loyalty is crucial. While having a large and loyal customer base is something that every company strives for, it’s not something that happens overnight.
Turning customers into brand loyalists will take some time. As a brand, you need to prioritize building trust and fostering relationships with your customers. Sure, having good products and services plays a role, but a strong overall brand experience is what’s going to seal the deal when it comes to loyalty.
What is customer loyalty?
Before you can even start building customer loyalty, you first need to understand exactly what it is. To put it simply, it’s when customers continuously engage with your business and repeatedly purchase from you over competitors. They not only value what you sell, but they also enjoy the experiences and interactions they have with your brand.
Why is customer loyalty important?
There are many reasons why customer loyalty is important, but the biggest one is its impact on your bottom line. Loyal customers are a key part of business growth.
A “famous” stat that is constantly cited when talking about customer loyalty comes from a report by Bain & Company and Harvard Business School. They found that increasing customer retention rates by 5% increases profits by 25% to 95%. It’s a wide range, but even a 25% profit increase is pretty significant.
In addition to driving growth, customer loyalty also helps create brand advocacy. Customers who keep coming back and have memorable customer experiences are more likely to become brand advocates. According to research from Qualtrics XM, customers who rate a company with a “good” customer experience are 37% more likely to recommend it. And when existing customers refer your brand, there’s a chance you’ll gain new customers in the process.
Customer loyalty vs. customer retention
You can’t talk about customer loyalty without referencing customer retention. Many companies use these terms interchangeably, but there are some slight differences. Here’s an easy way to think about it:
Customer loyalty focuses more on creating trust. How can we build relationships with our customers and encourage them to become brand advocates?
Customer retention focuses more on reducing customer churn. How do we avoid losing customers to our competitors?
Customer retention is all about producing repeat business and generating revenue. Customer loyalty, on the other hand, is all about building long-lasting relationships. Both work in tandem and are critical to growth, but are achieved in different ways.
How to build customer loyalty
When building customer loyalty, you have to play the long game. What you invest in your customer relationships now will pay off down the line – just know it will require a little time and strategy. Here are four tips to help you get started:
1. Provide exceptional customer service
This one should be a given, but you should always strive to provide your customers with the best possible service. Customers today have extremely high expectations so when they reach out to you for help, they want the experience to be seamless.
An easy and effective way to offer customers instant support is to install a help widget on your site. Customers can use it to quickly search articles from your help center and find answers to their questions. You can also add different channels to the widget like email, live chat, or callback so they can contact support if they still need further assistance. Customers who have consistently positive customer service experiences start developing a sense of trust and know they can count on you to help resolve their issues.
2. Be active on social
Having a strong social media presence is important when building customer loyalty. Customers are always interacting with brands on social. They typically use it as a channel to air their grievances, share their love for a new product, or ask customer support questions. So you should ensure there’s someone on your team who monitors your social accounts and is actively engaging and responding to customers.
3. Start a loyalty program
If you don’t already have one in place, you might want to consider launching a loyalty program. Loyalty programs are a great way to incentivize customers to keep buying from your brand. Many customers join loyalty programs to get early access to special offerings, earn points towards a free gift, or money off their next purchase. There are many types of loyalty programs (point-based, tiered, paid, etc.), but make sure to choose one that best fits your brand and buyer.
4. Take feedback on board
Another great way to build customer loyalty is through feedback. Knowing what customers like and don’t like about their support experience will help you provide better customer service and in turn, a better customer experience. With a built-in customer satisfaction (CSAT) tool, you can capture feedback easily and from any channel – all the customer has to do is fill out a short two-step survey. Agents can instantly view the feedback and address it on the spot if needed.
Customer support teams can also use aggregated CSAT data to see what areas require improvement. They can filter the data by country, queue, or site and compare it over time. If you know exactly how your customers feel, then you can respond accordingly and take the right action.
3 brands with the highest customer loyalty
When you think about customer loyalty, notable names like Apple, Nike, or Starbucks are probably the first to come to mind. While those brands are shining examples, there are many other companies out there with fiercely loyal customers. If you’re looking for some inspiration, here are three brands with the highest customer loyalty.
Fenty Beauty is a cosmetics brand created by singer Rihanna. After its launch in September 2017, it hit $100 million in sales within just a few weeks. Having a celebrity tied to the brand helped, but its inclusive shade range and authentic approach to social media are what really drove Fenty’s success.
The brand prides itself on creating inclusive products that are suitable for all skin tones and makes sure to showcase that on its social channels. Fenty’s Instagram page is filled with posts that are extremely diverse and colorful. There are product shots scattered throughout, but most of the page embodies the brand’s “Beauty for All” mantra showcasing all the customers, influencers, and makeup artists that use the brand’s products.
Its Twitter account is also very active in engaging with customers, highlighting their feedback and retweeting the captivating looks they create. Fenty’s customers love how the brand has created a community that makes everyone feel included, and it’s the main reason they keep coming back.
Those with pets are likely very familiar with Chewy. The company is an online retailer for pet food and other pet-related products. The brand understands what it’s like to be a pet parent and has built its customer service reputation around that fact. It offers 24/7 support via phone or live chat, so you can get your pet questions answered anytime, anywhere.
Chewy’s customer support team is also known for responding within seconds and making your pet the priority. Beyond providing excellent practical support, they also provide amazing emotional support. Whether you’re concerned with your pet’s health or have had a pet pass recently, their team is there to help. They’ll assist with finding you a vet or donating your pet’s leftover food to a shelter in need.
Chewy treats pets like family, and its customers value that more than anything.
Lululemon is the iconic fitness apparel company known for bringing the “athleisure” phenomenon to life. Whether you’re working out or just lounging at home, the brand’s clothing line is versatile enough to fit any lifestyle. In addition to quality products, they’ve also built their brand around health and wellness.
The brand encourages customers to become more active in their everyday life. Lululemon hosts hundreds of in-person workout classes in their stores. They also have an extensive online community called the Sweat Life, which offers a plethora of content like yoga videos, at-home workout tutorials, training plans, and mindfulness tools. Their commitment towards a healthier lifestyle is the driving force behind the company’s loyal customer base.
Building customer loyalty will take time, but any brand can achieve it. For those just getting started, it’s important to have the right customer support tool in place. While customer service is only one piece of the puzzle, it’s one of the most critical pieces.