How to Create Customer Loyalty

Keeping your existing customers is far cheaper than having to find new ones. Find out how to keep your customers through improved loyalty, by using a range of simple low cost measures.

Every business is aware of the need to obtain new business. Yet a growing number of companies are also realising the importance of keeping the business they have already gained.

Loyalty Programmes, Reward Schemes and Customer Relationship Management are all common examples of the increasing importance of forging closer relationships with your existing customers to help ensure they stay with you well into the future.

There are sound commercial reasons behind this shift in emphasis. One only has to consider the expense incurred in gaining all your current customers, or the cost of gaining new customers to replace them, to realise the importance of getting the best possible return on the investment you have made in building your customer base.

This guide shows how you can identify your key customers and target your efforts towards keeping them through a range of promotional ideas.

Who are your key customers?

Pareto’s Principle states that an incredible 80% of your business will come from just 20% of your customers. These figures may sound extreme, but carry out the exercise for yourself and you may be surprised by the results. Some of the names in your top 20% may also be unexpected but these customers are the key to your business and should be a main focus of your Customer Loyalty programme.

Another key area of your customer base which may be overlooked is your customer retention rate. Whilst you may be successfully gaining new customers, how many are you losing without realising it? Slowing customer defections from a negative to a positive state is why loyalty and reward schemes were first launched in the highly competitive supermarket sector.

Take a look at a list of your active customers this year and compare it to previous years. Who is missing and why? Some customers will always be lost through natural wastage, but others may leave because they are dissatisfied with your business. Finding out why can help you identify other potentially high risk customers.

As well as the top 20% and high risk customers, don’t forget about all the others. How much effort do you put into gaining more business from each existing customer?

What can you do to keep them?

Developing a simple Customer Loyalty programme may not be as complex or as costly as you might think. Much of the programme can be based on simply refocusing your attention and efforts onto your top 20% or high risk customers.

Here are some simple ideas for activities which you can undertake to help forge closer relationships with your customers.

Set Customer Targets

Look at each of your existing customers and set them an individual sales target. For the top 20% of customers, if you can achieve a small increase it will have a far greater impact on your business. For high risk customers, your target may simply be to keep them whilst the majority of other customers may have larger increases. Then consider how you will achieve these increases in business: are you going to sell more of your existing products/services, increase prices whilst maintaining volume or perhaps introduce new products/services.

Organise Internally

Allocate key customers to different members of staff, so that someone is responsible for providing a great service to each. If you don’t have many staff, at the least put a list of your top 20% on the wall so you are reminded everyday of their importance to your business.

Establish a Loyalty or Reward Scheme

To make your top customers feel special, set up a special VIP customer loyalty club. Customers included in the scheme could be offered priority service, special discounts, offers, exclusive product lines and many other benefits. Membership could be based on achieving a minimum level of business, to give smaller customers a target to aim towards.

Give out branded gifts

Make sure all your most important customers get something from you at least once year in the form of a branded corporate gift. This could be anything from a branded pen, to a mouse mat, desk set or briefcase, depending on the budget you can set aside for each customer. A small thank you can go a long way and provide a permanent reminder of your name.

Maintain a high profile

Keep promoting your name out in the wider marketplace through high profile advertising and PR, to help reassure your existing customers that they are dealing with the best. If you sell your products or services through a reseller, you could also consider promoting to their market as part of a ‘push/pull’ strategy designed to stimulate demand from your customers’ customers, or ‘pull’ products through the supply chain rather than you having to ‘push’ them onto your resellers.

Get face to face

One of the best ways to build better relationships with your customers is to meet them face to face. If your premises could be of interest to your customers, in a manufacturing business for example, then why not hold a customer open day? This would give an opportunity to explain more about your company to a captive audience, launch new products and gain valuable feedback from your customers.

Stay in contact

One of the most important things you can do is to stay in regular contact with all your customers. Regular communication shows that you care about their business and provides a valuable opportunity to get your message across. You could communicate using a regular customer newsletter or magazine, direct mail, or emails linked to new content.

For more information call us on 01304 383838 or visit