No matter what size or type of business you run, customers are essential; without them your business could not exist profitably.
Customers that are loyal will return more often, giving higher sales! However, a surprising number of businesses appear to just expect customers to arrive, and seem to do nothing to make them want to return.
This article looks at different ways in which you can help to keep customers loyal.
Why Is It Important To Have Loyal Customers?
(i) Repeat Sales
If your customers develop a loyalty to your business, they will be much more likely to choose you over your competitors in the future. Over the course of a year, the sales of one loyal customer can add up to a significant amount.
Something every business benefits from is a ‘customer for life’ – a customer who will always buy from your business where possible. If your business satisfies loyal customers every time, then hopefully many will become customers for life.
"80% of your business comes from 20% of your customers"
(ii) 80/20 Rule
Most businesses tend to find that 80% of their business comes from only 20% of their customers. These are the ‘customers for life’ and loyal customers who purchase regularly.
Although it is vital for any business to attract first time and occasional customers, it is usually much more beneficial to turn the ones you have into loyal customers.
This is especially true in fast moving markets, where customers may use your product on a daily/weekly/monthly basis.
If you have 1000 customers who buy 1 product each year, you will sell 1000 products a year.
or
If you have 100 customers who buy 10 products each year, you will still sell 1000 products a year.
(iii) Word of Mouth
This is the cheapest form of marketing, where your satisfied customers speak to their friends and family, effectively selling your business to them.
Loyal customers will be much more likely to tell their friends about your business than occasional visitors, even if the service given to both of them is great. Not only do loyal customers spend more, but they can also help bring in even more new customers.
Loyal customers can be especially useful in service businesses such as plumbing and electrical repairs, where most people use word of mouth recommendations to decide which business/person to use.
"it costs five times more to gain a new customer than keep an old one"
(iv) Cost
Probably the best reason for making (and keeping) your customers loyal is also the simplest: It is commonly stated that it costs five times more to gain a new customer than keep an old one.
Turning just 10% of your occasional customers into loyal customers could save you up to 8% of the costs of gaining customers (Such as: marketing, price offers, staff costs and time, etc…).
BizHelp24 – UK business and finance information, news, help and services for small businesses BizHelp24 is a UK business and finance resource providing Small Business Help, Start up Information, news and services; for individuals and Sole Traders. Comprehensively covering a wide range of key business, finance, and service topics. Employment and personal information includes Work Times and Break Entitlement, Body Language, employee Holiday Entitlement and Employment Contracts. Credit Policy information includes Letter of Credit, useful Credit Notes, Business Loans. and Cash Flow Control. Other information areas include Bankruptcy, Homeworking, Business Failure, Company House and Company Names,
The free content within this entire web site is for information only.
The content is believed to be accurate, but only in general terms. Specific advice is needed for individuals & businesses.
ROK Connect Limited (Registered in England No.3573320) t/a
Biz Help 24 is registered with the
Data Protection Act 1998 No.PZ7082780
