11 Dec The Art of Loyalty
Finding new members or customers is an important aspect to increasing your established client-base and companies are eager to try new lead generation ideas to find them. Yet even more critical (and sometimes overlooked) is maintaining and growing your existing customer and membership base. According to Harvard Business School, increasing customer retention rates by 5 percent can increase profits by 25 to 95 percent. Even a small return of customers can add a great value to your overall business.
Customer and membership loyalty can be evaluated and divided into four main facets: communication, selling, reciprocity, and support. The fact that customer profitability tends to increase over the life of a retained customer is added incentive for organizations to allocate further resources to develop customer retention strategies.
Communication. If your goal is to retain loyal customers or members, you need them to care about you. Customers and members alike, respond to organizations who stand for something, and if you do not express your standards it is easy to be ignored. But how do you get them to stop and care? Positive reinforcement. It is impossible to retain loyal customers if they are not paying attention to you. A study including 7,000+ consumers from across the United States found that of the consumers that cited they had a strong relationship with a brand, 64 percent claimed shared values as the primary reason. Despite what people admit, most people tend to like things that resemble them in some way. This is a cognitive bias coined as implicit egotism, and it is a useful tool to keep in mind when communicating with your members and customers. In order to attract the audience you want, you must carefully identify who they are and what they want. Then make sure that your brand message speaks to the ego of your target audience and captures their pains, goals and aspirations.
Selling. Selling to customers and members in a favorable way is an integral part of building loyalty. Not all words are created equal, and using words your audience loves to hear can elicit a major response. Customers show positive reactions to the words that imply promises, such as; free, new, and instantly. When your company or organization follows through with these promises, the customer will enjoy their purchases more than they would have otherwise. According to neuroeconomics experts, nearly a quarter of all buyers you will have to sell to, no matter the industry, will be conservative spenders. Incorporating bundles and reassuring words can help reframe your business and act as better strategies to sell to these conservative buyers.
Reciprocity. The premise is simple: if you go above and beyond for customers you will be rewarded with repeat business: the same goes for members. Giving back to your audience can be incredibly pricey, but it does not have to be. Embrace the art of the “wow” factor, by understanding that reciprocity is built even in small gestures. According to psychologist, Norbert Schwarz, as little as 10 cents can create reciprocity between two individuals. It really is the thought that counts, and customers will remember a business that put in the extra effort. For example, utilizing the element of surprise can have a powerful impression, regardless of what the gift is. Recall a time that someone did something nice for you unexpectedly; the gesture probably wasn’t all that unusual, but the fact that it came out of nowhere left a lasting impression on you.
Support. Exceptional customer service is the key element to keeping your members and customers coming back, time and time again. According to a study by the Gallup Group, customers were nine times more likely to be engaged with a brand when they evaluated the service as “courteous, willing, and helpful,” as opposed to the “speedy” evaluation, which only made customers six times more likely to be engaged. Quality matters more than speed and customers enjoy doing business with companies who know them. Behavioral psychology studies reveal that everyone views their service experience as more positive when they do not feel rushed or ignored. Spending the extra time with your customers and using attentive, productive and genuine actions positions your business as a positive option against competitors.
Customer relationship maintenance is much more than a to-do list item; keep personal tabs on customer satisfaction by collecting regular feedback. Regularly taking initiative to ask questions like “What would you like us to stop doing?” “What would you like us to start doing?” and “What should we continue doing?” can help gain exclusive insight that will provide a starting point for vast improvement. How you interact with customers is inevitably a reflection of how they will consistently engage with your business.
In addition, regardless of the type of organization you are, it plays a major role in providing exclusive opportunities to members and should recognize and and reward excellence. When your members feel loved, they are more loyal, they engage, and they are willing to give their time and energy to recommend the organization to other potential members. Membership loyalty is the driving force to ensuring the financial health and future of your organization. Repositioning your loyalty strategy and properly implementing these four aspects will bring support to trigger the results you need and increase your overall retention rates.