4 Ways to Use Communication to Boost Customer Loyalty

It’s no secret that it’s easier — and cheaper — to retain the customers you have than it is to acquire new ones. In fact, a study by Northwestern University’s Center for Retail Management found that up to 15 percent of a company’s most loyal customers account for between 55 and 70 percent of business sales.

Not only that, but more than three-quarters of these customers enjoy telling other people about the brands they support, acting like an extra arm of your marketing team. Good news travels fast: The more you can provide your customer base in the form of great service, the more your best advocates will sing your praises and build up your pool of brand loyalists.

A Little Goes a Long Way

According to a Gartner Group study, 20 percent of existing customers will be responsible for generating 80 percent of the future revenue of a business. That 20 percent sounds small to start, but when it begins to add up over an indeterminate period, the result is an educated, loyal group of customers.

Many of the brands that are most successful at winning customer loyalty do so by investing in channels that help turn their product and everything associated with it into a lifestyle that others admire and want to take part in. Consider the Starbucks app. Sure, it allows customers to place and pay for orders, but it also gives them access to the My Starbucks Rewards program and its music streaming library. The app is constructed to directly support the idea of Starbucks as not only a way of life, but also a way to improve your life.

Walgreens’ Balance Rewards program takes a similar tack when trying to gain customer loyalty. Customers can place prescription refill orders, then — similar to the Starbucks app — monitor them and pay for them through the app, all while earning Walgreens perks for their loyalty through the program.

The “spend money to make money” adage works similarly in customer loyalty. Businesses need to spend a little to build a financially viable base of customer advocates, whether that means investing in rewards programs or giving them other incentives. It’s common for businesses to see initial losses, so don’t get discouraged early. Play the long game to engender loyal customers who continue to spread your brand’s virtues.

Leave Them Coming Back for More

Loyal customers will look to their preferred brands when they need products or services. To create those types of customers and get them to talk to their friends, use these four strategies.

  1. Do more than enough. It’s easy to get stuck in the mindset that beating your competition to the punch is the best way to maintain business, but that’s not always the case. In fact, 77 percent of customers like when the brands they use show appreciation for their business. Show customers how much they matter by going above and beyond with every interaction and action.

    Whenever you communicate with them — whether it be phone conversations, scheduled deliveries, interactions regarding their warranties, etc. — strive to leave your customers feeling impressed. If customers believe you genuinely care about them, you will have taken a big step toward retaining their business and toward possibly gaining new business through positive word of mouth.

  1. Add a personal touch. Whether you have one employee or thousands, it’s important to cultivate a human connection between customers and your brand. It can be as simple as personal, one-on-one interactions on the phone or as complex as formulating a strategy to generate connections via social media in order to reach a larger crowd. Any effort to positively relate to customers can have staying power.

    Humor can be an especially effective way to strike up a rapport, something Wendy’s and ZenDesk can attest to. Even if it’s just a well-crafted tweet, proving there’s an actual person — not an algorithm — behind a brand is a step in the right direction.

  1. Take your lumps, and move on. Brands that provide new feature after new feature attract headlines, but that doesn’t mean customers don’t value qualities such as honesty and fairness. Ninety-three percent of consumers, in fact, say it matters how transparent a company is with them. Any shady dealings (does the Volkswagen emissions kerfuffle ring a bell?) that save you money in the short term will almost always end up costing you big.

    So if you mess up, own up to it. If you’re not sure how to go about apologizing, look to the way PricewaterhouseCoopers handled its envelope mix-up at the 2017 Oscars. When presenter Warren Beatty received the wrong envelope and announced “La La Land” as the Best Picture winner instead of “Moonlight,” PwC sprung into action. The accounting firm, which is tasked with tallying votes, issued a short apology that acknowledged how the mistake happened and whom it had wronged, along with what the agency intended to do about it.

    Mistakes happen in life. Brands that are open about them build credibility with their customers and show they’re ready to learn and grow with customers.

  1. Let customers in on the secret. Special sales and promotions like those that Amazon gives its Prime members help reinforce that these customers are insiders with exclusive access. Asking for feedback is also a great way to make loyal customers feel like they’re part of the team and to identify areas where your company could improve.

    Porsche leveraged feedback successfully with its “5 Million Car” campaign. With two milestones to celebrate — the 50th anniversary of its 911 model and its attainment of 5 million Facebook followers — the automaker decided to bring its social media fans in on a project. The automobile titan polled its Facebook audience for suggestions on color, wheel design, and other details to create a specially made 911-model car and then revealed the final result.

Communicating with customers is key to taking quick, decisive action. These actions are most often needed when situations go awry, but it’s also important to recognize and replicate positive customer experiences.

Acquiring regular buyers is difficult, and you’ll always have to chase them if you’re not getting enough repeat business. Investing in the customers through effective communication you have will go a long way toward ensuring profitability and retaining enough customers to thrive for the long haul.

Jeff Epstein

Jeff EpsteinVerified account

CEO and founder at Ambassador
Jeff Epstein is CEO and founder of Ambassador, a trusted referral software company that empowers brands to increase customers, referrals, and revenue by leveraging and scaling word of mouth.
Jeff Epstein

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