Why Customer Loyalty is very important for Business ?
Do you know repeating customers give you more business than new customers? Did you know that for many companies retaining their customer base is more important than getting new customers? Did you know new customers also cost more to acquire? The biggest asset of your company is customer loyalty. Without a happy customer your business wouldn’t survive at all. A happy customer is the key to your success. Customer loyalty is very important to your business and the following are a few reasons why:
1) Loyal Customer Base = Strong Word Of Mouth
Word of mouth is least costliest method of marketing. Your loyal customers are the biggest advocates of your brand. Trust plays a big part in this as before buying anything we look at the reviews and also we believe the people if they are our friends or relatives. If they are satisfied and happy using your product, the chances are high that they will tell others to use it as well.
2) Repeat Purchases
There are a lot of companies out there that offer rewards to the customers who want to repeatedly buy the same product. This is very important as it not only helps you sell a product but it also gives an incentive to the customer to buy your product. This process helps you build a loyal customer base for your company.
3) Repeat Customers Spend More
Do you know that your loyal customer will tend to spend more money than a new customer? According to a survey, only 15-20% new customers will buy your product but 65-70% repeat customers will buy the same product. The reason for this staggering difference is the loyalty and trust the customer has on your brand. They know that the product will be good and the services offered will be worth their money. This is the reason they might spend more money.
4) They act as your Focus Group
Have you noticed that whenever you send out surveys to people or any questionnaires to the customers, it is the loyal group of customers that answer your questions? You can think of your loyal customer base as your focus group who can help you make plans that can help your business grow and go to the next level.
5) They are Less Expensive Than New Customers
It is very necessary to retain your customers as if you fail to do so you will have to spend more money to acquire new clients. You would need to replace your old clients which would mean spending more money on marketing, advertising etc. The reason customer retention is important is because acquiring new customers is about five times more expensive than retaining old ones. It saves you marketing, advertising and on-boarding costs.
These are only a few reasons as to why customer loyalty is very important for any business in the market. To grow you need to have a loyal customer base. This base can be your fans and your biggest cheerleader and that is the reason that it is important to keep this customer base happy. They will surely help you bring in more clients.