How small businesses can build and improve brand loyalty
Any company can tap into customer loyalty to grow its brand. Learn how you can use loyalty to expand your reach.
It’s easy to look at big brands like Starbucks and McDonalds and think that customer loyalty programs are out of reach for your small business. That doesn’t have to be true.
Sure, these companies have deep pockets and can afford to develop assets such as mobile apps, internal systems, and layers of legal protections. However, the idea that building brand loyalty needs to be complex and expensive is a myth.
Building brand loyalty is simple and mostly requires you to focus on the needs of your customers. You must create valuable experiences that keep customers coming back.
Small businesses should aim to establish long-lasting customer relationships—especially in today’s world. Consumers want to feel an emotional connection to your brand story.
To help businesses build brand loyalty and retain customers, we’ve put together a list of practical ideas that are easy and inexpensive to implement. We also answer basic questions about brand loyalty and explain why it matters.
What is brand loyalty?
Brand loyalty is when consumers are willing to keep buying from one brand repeatedly even though there are other alternatives in the market.
For example, Apple users, show their brand loyalty by standing in line for hours to get the latest iPhone release. They don’t consider an alternative company such as Samsung to get a new smartphone.
Brand loyalty at its core is all about getting customers to repeatedly buy from your business and become your brand advocates.
Why is brand loyalty important?
To stay healthy, every business needs a balance of new customers and regular customers, those that come back again and again.
For an average business, research shows loyal customers account for 20% of your entire customer base, but that 20% drives 80% of your business’s revenue.
Customer loyalty is so important that more than 90% of businesses have put in place some retention or reward program. All the while experts have found that a 5% increase in customer retention can increase sales by up to 95%.
Loyal customers spend more, are more likely to convert, and become brand advocates. Every business needs a healthy balance of new and repeat customers. If a business can’t convert new customers into repeat buyers, then it’s not offering a product or service that compels those buyers to come back. Similarly, if it only relies on its loyal fanbase without bringing in fresh business, there is no growth.
Ideally, a business would like for every customer who experiences their brand to return and become a regular customer. While that’s impossible in the real world, you can increase your chances that new customers come back and end up being your loyal brand fans.
How to build brand loyalty?
Small businesses vary by industry, products, and services offered, but the staples of good brand loyalty stay the same. Here are the five best and inexpensive practices to build brand loyalty.
1. Develop your brand purpose
Brand purpose is your brand’s reason for being beyond maximizing profit. A brand purpose isn’t a brand promise or social purpose. A brand’s purpose connects with consumers on an emotional level. To clarify further, a brand purpose is about product-led initiatives which strive to simultaneously achieve business and benefit society.
More and more consumers see brand purpose as an important factor when deciding to purchase a product or service. Studies show that 50% of consumers say they now buy based on a company’s brand values and impact. While 64% of consumers say they form a relationship with a brand based on a brand’s higher purpose.
Furthermore, 50% of consumers worldwide consider themselves to be belief-driven buyers and 67% bought a brand for the first time because they agreed with its position on a controversial topic.
Developing a purpose for your brand is a good place to start building brand loyalty. To gain loyal customers, you need more than a good product or service, you need to be able to connect with them emotionally. The best way to do this is by standing for something they care about and believe in.
2. Reward your customers
One of the best ways to make a positive impression with your customers is to offer them incentives as a way of thanking them for being your customers. You can do this by setting up a rewards program.
Any company can develop a customer loyalty rewards program, just go to your local restaurant or coffee shop. You will likely receive a card where if you buy certain items, you will get an extra free item or discount. This is building brand loyalty in its simplest form.
Rewarding your customers will help keep them loyal to your brand. Here are the best 3 ways of rewarding your customers.
- Offer current customers improved prices– offering current customers exclusive discounts to show your appreciation. This in turn will make them loyal and keep coming back for more. On top of that, your new customers will also want to be part of the exclusive group.
- Build a community for your customers– Create a digital community for your customers like LinkedIn or Facebook groups where they can all voice their thoughts about your brand and connect with each other. Customers will always trust their peers more than they trust your organization. So, become the middleman and build an environment that your customers can be part of.
- Celebrate customers– Every customer you have is a real person, and people like to be recognized for their contribution. Using your existing channels such as social media, website, or podcast, you can feature stories about your customer’s role in what you do. This recognition will a long way towards encouraging more customers to get more involved in your brand’s success.
3. Get social and connect with customers on their terms
One way to strengthen the bond between your brand and your customers is by engaging with them even if they aren’t at your place of business or using your product. Social media is a great medium to achieve this and build lasting brand loyalty.
Use social media to tell your customers about the developments within your company and ask them about their developments in their organizations or personal lives. Keep yourself informed so you can pro-actively participate in their updates.
What you can also do is, encourage customers to post about your brand to win a contest, or write a review on Google.
Social media allows you to constantly be in your customer’s raider. Post content tailored for them and let them know that they are your number one priority. This strategy is also great for reaching new customers, as the posts of your loyal fans will reach new eyes of potential new buyers.
4. Provide the best customer experience
Consumers love brands that prioritize the customer experience. Every interaction a consumer has with your brand shapes their experience. From the design of your website, the look of your store, to the attitude of your employees. Consumers are constantly forming an opinion on the experience that your brand delivers.
To ensure a superior customer experience, make sure every employee is friendly and offers the very best personalized service to customers. Attend to problems encountered by the customer quickly and do everything you can to resolve that problem.
Always be responsive to your customers when they get in touch and try your best to understand them in every way. You can use appropriate tools and technologies such as CRM systems and marketing platforms, to build up a profile of your customers’ preferences so you can keep improving their experience, from the start of the relationship and going forward.
5. Train your staff to connect effectively with customers
For consumers to be loyal to a brand they must feel important and valued by a company. This is achieved through great customer service. But the quality of customer service is dependent on your employees.
The path towards making your customers feel important and valued begins with your employees. They too want to feel important and valued. Happy and fulfilled employees are more productive and do their work with love.
Experts estimated that customer service will be more important than price and that 70% of the customer journey is based on how the customer feels like they are treated.
It pays to invest in employee training and building positive company culture. It plays a huge role in keeping your employees motivated and improves the service they deliver. Ensure your employees feel valued and always cared for. With the right staff that is willing to help, you can increase brand loyalty organically.
Build strong brand loyalty for your business
As you can see, you don’t need deep pockets to have big brand customer loyalty. Startups and small businesses can use smart, strategic tactics to create a superior customer experience that leads to strong brand loyalty.
The number one requirement for building brand loyalty is to focus on customer needs. On top of producing a great product and better service, make them feel valued. Show them that you appreciate them and give them the best customer experience they can’t get from your competitors. Do all this and you have all to yourself, loyal brand advocates.