Importance of Customer Loyalty
Right now, it is important to pay attention to customer loyalty. With the increased competition from other corporations and businesses, customer loyalty has become a valuable asset for many businesses. That said, some companies are struggling with developing their long-term customer loyalty and satisfaction strategy.
She has been an organizational behavior expert for over 31 years, with a focus on helping business leaders develop strategies that create true long-term customer relationships through responsive leadership behaviors such as coaching and mentoring teams, as well as providing new information about how to use marketing resources to their advantage.
Importance of Customer Loyalty
According to Helen Lee Schifter, “Several decades ago, the importance of customer loyalty became a positive self-fulfilling prophecy. Many consumers had taken the ownership of their long-term needs and interests into their own hands by opting to purchase from companies that gave them what they wanted and valued.”
Within these companies, employees were accountable for developing loyalty through one-on-one conversations. Through effective face-to-face communication, businesses improve customer satisfaction, eventually leading them to reap the rewards of loyal consumers.
In today’s society, however, customers may no longer be inclined to do business with companies that offer little or no personal service or respond slowly in delivering goods. She indicates that “the explosion of technology and the fact that global companies now have easy access to information about their products and services has made it harder for local businesses to compete for customers.”
Because of this massive competition, companies have emphasized improving customer retention from those already in their database. However, despite these efforts, only 30% of customers who made a repeat purchase stayed with the same company. The remaining 70% opted to do business with another company or competitor. Hence, for a company to succeed, it must retain its current consumers and make new ones.
Effective retention strategies can be as simple as providing free products or services. For example, the Global Product Council is associated with more than $2 trillion in annual gross receipts from consumer packaged goods. Through its efforts to foster continued relationships with its customers and create brand loyalty within the group, this organization achieved an increase of 15% in repeat purchases over a year.
In addition to the Global Product Council, other successful businesses have taken on retention strategies such as keeping consumers informed of what is new and working on improving their product quality. She explains that “today’s customers want to know that they are not only being heard but also valued. For some, this means extra attention during slow times, while for others, it means visiting them when they are sick.”
These businesses have found success by showing consumers that they are important to the organization. Helen Lee Schifter advises, “when companies focus on delivering customer satisfaction and loyalty, employees feel more engaged in their work, customers remain loyal, and both parties benefit from their long-term relationship.
Customers are becoming more selective about where they choose to do business. While companies need to have a strong product or service, it is just as critical for them to have an excellent employee relationship. Not only does this create loyalty among customers, but it also shows that the company cares about the consumer’s needs, thus creating a win-win situation.