November 28, 2014

The Importance of Customer Loyalty

Flickr CC via Didriks

“On average, loyal customers are worth up to 10 times as much as their first purchase.”

– White House Office of Consumer Affairs

In 2011, American Express conducted a survey of their customers, which revealed that 3 out of 5 customers are willing to walk away from their favorite brand if they received poor customer service. Many entrepreneurs and businesspeople struggle with various aspects of customer service, but it’s clear that customer service can certainly make or break a business. In addition to the American Express survey, another research report showed that 90% of Americans are willing to spend more if it means excellent service.

Fantastic customer service can help a business rise in the ranks, and the loyalty of a client base that appreciates you and what you have to offer is paramount. Loyal customers are familiar with you and your brand, and therefore are much more likely to check out new products or recommendations you make.

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“Brand ambassadors” are popular, especially on social media, where Tweets, photo posts and hashtags make it easy for customers to share a great experience—or a bad one. Keeping your customers happy, with quick responses to their questions or concerns, gives them a positive experience they wish to share. If they love your service or product, they will speak up and share, and word-of-mouth marketing is an extremely powerful channel.

Having brand ambassadors can assist you in creating new customers, as they are taking a recommendation of a friend or family member who mentions your services. This is a much lower cost to acquire, as most business need to advertise and market, offering free product samples or discounts in order to attract new customers. By providing great customer service, you create an experience others will want to share. And as a reward, they will sell others on your business.