“On average, loyal customers are worth up to 10 times as much as their first purchase”. – White House Office of Consumer Affairs
The mistake, it would seem, that some smaller companies make is to believe that customer loyalty is not possible because of their crunched and miniscule budgets (as compared to the big companies). However, the fact is that no company, especially the smaller ones, can hope to survive without customer loyalty. It all comes down to meeting the customer’s expectations better and achieving this even on a small budget. Customer loyalty is the most potent ‘weapon’ that a company can possess and the market rule suggests that only 20% of customers are profitable, providing up to 80% of the company’s business! As per the statement above, it is obviously worth investing in creating customer loyalty. In addition, it is at least 7 times more expensive to attract a new customer as compared to the cost of retaining them. It is worth every investment to keep your current customers satisfied and for long – customer loyalty takes time to build.
Customers have begun to expect more from the brands and companies they associate with since they have so many options at their disposal. They demand the best and are willing to invest time to research the ‘options’ before zeroing on any one. It becomes even tougher to gain customer loyalty if a company is not customer focused and does not have robust strategies in place to exceed expectations. It takes consistent and relentless effort and is a time taking process to build and cement customer loyalty. It is a long arduous journey but when a company is able to achieve customer loyalty, the customers are happy advocates. This, for any company is cheaper and more effective option than any other promotional campaign. Big companies do not often face the challenge of a limited budget and hence are able to run loyalty programs and provide other benefits. Small companies on the other hand, given that they have a fund crunch, must resort to different approaches in order to gain the coveted customer loyalty.
Small companies can build their knowledge and expertise base and build a reputation of being subject matter experts. With such a reputation, customers are more likely to trust them and turn to them leading to customer engagement. This in turn leads to customer loyalty and profitability that brings the revenue and profits, thereby increasing the size and influence of a small business that works on a small budget.
Irrespective of size, every business’ customer base would be an intriguing mix of customers. Some would be happy with the company and are willing to tell others, some would be perpetually displeased, others would be the silent ones (both happy and dissatisfied) and yet others would be the disgruntled ones ready to tell others the ‘bad news’ whenever an opportunity presents itself. A small company must leverage its advantages and focus on increasing the first kind – the willing advocates. It must also present more situations for the silent happy ones to be delighted enough to join the first kind of customers. The more such customers a small company is able to gain and retain the more profitable and worth every investment will be. The focus must remain on gaining customer loyalty – which is the most cost effective method to run a company.
Small or large every company is bound to serve its customers. Ensuring that the customer service provided is easy, swift, effective and ubiquitous will lead to happy customers and over time to customer loyalty. Responding to customers swiftly and making it easy for them to conduct business with you does not require a big budget – only a mind-set and attitude of true and willing service. Studies reveal that if a company is able to resolve satisfactorily a customer’s problem, the chances of them providing repeat business is as high as 75% and if the resolution is instant then this figure rises to a whopping 96%. Imagine the power that such customers can add to your company!
With a small and limited budget, it becomes imperative for small companies to hire right. They must choose staff who would be motivated and enterprising people, who would be willing to provide the best service to customers and share the vision of the company. With the right staff in place and consistently training and coaching them, even a small company can provide the kind of stellar customer service that leads to customer loyalty and brand ambassadors. Customers that willingly speak about the great service they receive from even a small company would be able to influence a lot more people to become customers. The company would gain more customers without the added and humongous costs of promotions and marketing campaigns. In building customer loyalty, do not forget that even a small staff strength can do wonders – they just the right direction, support and guidance.
The important thing, for customers when doing business with a company irrespective of its size, is that the company offers them value and understands their emotional needs for buying. Even on a limited budget but with the right attitude, small companies can forge unshakeable relationships with their customers. The basic premise and understanding should be that no customer is like another and hence would need service in the manner that best appeals to them. Each customer expects to be treated as special and important and even a small company on a limited budget can achieve this.
As discussed above, loyalty programs are not the domain of the ‘big and large’. Even small companies can allow customers to accumulate points on every purchase and use those points to get a free something or a discount at their favourite store. The small things add up in a business and often go on to lend huge support to a company. A customer who has received the gift or discount is very likely to show this to friends and associates, garnering interest and curiosity for your company. Often these curiosities turn to genuine desire to conduct business – a new customer gained without too much fuss and with a limited budget. Of course, as your small business grows, you cannot skimp on the benefits and rewards you provide to your customers – that would have an adverse effect on your business.
Inexpensive but highly visible and powerful – social media! Networking and creating opportunities for business has found a new friend in the form of social media sites. Even the smallest companies must have their ‘pages’ on these sites simply because of the high visibility. One comment, a single update and whatever your company wishes to convey – is visible to a lot more people than only to the target audience. You never know which person might decide to become a customer after reading your posts and customer ‘interactions’. Given your company has a limited budget, discreet and clever use of social media sites can ensure that the existing and potential customers remain engaged and soon enough this translates to customer loyalty. Exciting news, smart updates, value-added information and brilliant content are just some ways by which your company can attract and arrest the customer’s attention and soon move this to customer loyalty.
All that we have mentioned, translates to one simple yet powerful rule – provide the customers with stellar customer service. Become their go-to company for everything – even it is beyond the scope and domain of your products and brand. Customers will love and trust you for this resulting in their loyalty and long-term business and powerful testimonials and referrals to their friends and associates. Amongst the most important things to remember is to continually acknowledge and thank your customers for their business and endorsements and do on your company’s website and the noticeable platforms of social media.
What matters at the end is that even on a limited budget, your company is able to increase and sustain customer loyalty and then enjoy all the methods customers employ to reward you!
