True B2B customer loyalty is more than just someone who spends a lot with you. Here's what real customer loyalty looks like and how to win it.
Customer loyalty - it's a term that's bandied about in marketing teams and across the media, but what does it really mean? It's not just a business that spends a lot of money with you - true customer loyalty is far more than that, and it's much more difficult to win.
Here's what real customer loyalty looks like, as well as how you can win it via a B2B customer loyalty and rewards programme.
What is real customer loyalty?
There are three core characteristics that make up a truly loyal customer:
They are repeat customers over a long period of time.
They frequently return to you even when prices might be lower elsewhere.
They are a brand ambassador, recommending you to other businesses.
It all comes down to how much it costs to retain customers versus how much it costs to attract new ones.
Notice there's not anything in there about spending a lot of money with you. Obviously this is linked to being a repeat customer, but one company that spends a lot won't necessarily come back or recommend you to other businesses, and that's not a truly loyal customer.
There are objective ways of tracking customer loyalty - particularly whether a business is making repeat visits. If you know they are buying products or services that they can get cheaper elsewhere, that's also a good indication that they have loyalty to your brand. Likewise take a look at any social media or reviews you're getting to see if some people are recommending you a lot, and ask incoming customers how they heard about you, and whether it was due to referral.
Remember these characteristics need to be repeated over time. If someone comes to you three or four times a month consistently over three months, that's great, but does their loyalty continue after that, or is there a drop off because they've discovered other options?
Why do you want true customer loyalty?
It all comes down to how much it costs to retain customers versus how much it costs to attract new ones. Estimates differ about how much this is, but marketing company Invesp argues it can cost five times as much to attract a new customer than keep an existing one.
Meanwhile, it's common in marketing to refer to the 80-20 rule. This states that 80 per cent of your profits will come from just 20 per cent of your customers. These 20 per cent are the repeat, loyal customers described above.
So how do you win real loyalty?
Introducing a customer loyalty programme at your business is a great way to boost real loyalty. But it's not just enough to have a points per amount spent system that gets customers a tiny discount - this isn't really going to encourage them to return to you.
Instead, you need to ensure you're offering rewards that customers will genuinely value - and this means giving them a choice. Power2Motivate's exclusive rewards gallery gives customers access to thousands of different awards to choose from, and travel incentives will help to offer that little bit extra that your competitors can't.
Customer loyalty is highly sought after, but not everyone can get it. To find out more about creating a successful B2B customer loyalty programme at your organisation, contact the team at Power2Motivate, or request a demo today.