Customer loyalty in your company

Business town with customers

Many companies and managers often forget the importance of customer loyalty. Recently there have been a strong emphasis in the business world on innovation, both in products, but also regarding reaching new markets, which for the record there is nothing wrong with. But what can be a problem is, if managers and marketers forgets the importance of customer loyalty. Customer loyalty is not an easy discipline, which is why you need to think it into your strategy from the beginning. Jeppe Lau Hansen offers one view on how to make customers loyal to your company. 

Why is customer loyalty important.

Customer loyalty is important because of several factors, but most important for you company; they all support your bottom line in a beneficial way. All in all customer loyalty is a gold mine if handled correctly. Reasons for this is among others: Customer gold mine

  • It costs significantly less to keep existing customers than it does to acquire and create new customers.
  • Loyal customers are less likely to find alternatives to your company. It often takes more time and more thought whether to switch to another product or not, hence you will have a chance to make them stay even after a less good experience.
  • Loyal customers are more valuable than new customers for two reasons:
  • They usually have a higher consumption within this brand than non-loyal customers.
  • They are less price sensitive, hence there will be a smaller impact, if there is a small change in price for a product.

Perspectives on how to build customer loyalty

From above list it is clear that customer loyalty pays off. The question remaining is though how to build this loyalty. There are different views on how one can retain its customers and build customer loyalty. According to Jeppe Lau Hansen, this depends certainly on the industry you are running your business in. For example, he believes that in the financial sector service will play a major role in the future. Given that the products are more and more similar to each other, it is important that the service surrounding a product stands out. Therefore, this is according to him an area that you should focus on, when trying to build loyalty among your customers.

Others believe that customer loyalty can be found in the relationships that exist between the customer and the company. Thus, it is important to not just see the customer as an end-comsumer, but instead see the customer as a stakeholder, where it is essential to  establish a form of dialogue and relationship with. This perspective allows you to build a relationships that will help the customer to reinforce loyalty to a product or brand.

Overall customer loyalty is important and definitely an area where many managers can improve!

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