Customer Loyalty Definition


What Is Customer Loyalty?

Customer loyalty can be defined as an ongoing emotional relationship between a customer and a company. This emotional relationship is manifested through the customer’s willingness to engage in, return to or do recurring transactions with the company or brand.

Customer loyalty is thus a result of satisfied customers, positive customer experiences and the total value (incl. Goods and perceived emotions) the customers get from doing business with the company.

Customer loyalty and SEO

A common misconception is that the loyalty process starts the moment the customer makes their first purchase.

The process actually begins with the first interaction with the brand, which in 9 out of 10 cases takes place on Google’s search results page. After that, loyalty is built up step by step.

Customer loyalty and Google SEO thus go hand in hand.

Search engine optimization helps you increase your visibility, understand your customers, create content and user experiences that make them find your business and stay on the website.

Loyal customers in turn generate reviews, links and more organic traffic to your site.

Reduce customer losses

With the right insight and understanding, you can actually reduce customer loss for only a fraction of what it would cost to replace lost customers. By paying extra attention, you can also increase revenue from current consumers.

A survey conducted by American Express shows that 69,8% of consumers surveyed are willing to spend more with companies that they believe offer a phenomenal customer service.

Aside from the obvious benefits, such as greater revenue for lower costs, there are many other benefits to improving the relationship with your customers.

Loyal customers act as ambassadors for your brand and also provide useful feedback on which areas work, what needs to be improved and which direction you should take in the future.

As an end user of your product or service, it is in their best interest to provide honest and concrete feedback. In this way, it therefore becomes an invaluable tool for product development.

Strive to create loyal customers

One of the most common business goals is of course to grow and there are several ways to increase growth. Building a loyal customer base is one of the most effective strategies.

Here are some reasons why:

1. Tolerance

Sometimes problems and mistakes can occur. Loyal customers tend to be more tolerant when this happens and give you space to fix the problems.

If other customers start complaining, they may even start defending you.

2. Cost-effective

It’s more expensive to acquire new customers than to retain the ones you already have. Even if you get new customers, it will take time before you get a return on investment because they may be harder to convince.

In addition to the acquisition cost, new customers often require more support before they understand your business processes.

Loyal customers are usually already aware of your processes and thus do not need as much support.

3. Repeated purchases

Loyal customers spend more with your company. They follow your campaigns and take part in your news.

4. Buffer

When you have loyal customers, you can put less energy into worrying about your competitors. Your loyal customers already like what you offer and therefore do not look in the direction of your competitors.

This means that you do not have to resort to strategies such as price reductions to retain customers.

5. Recommendations

Loyal customers tend to share their experiences with others. These customers are therefore good when you want to run word-of-mouth campaigns.

It is also common for these types of customers to interact and engage with your content and even create their own content that promotes your brand.

6. Feedback

Customers who are loyal will give you quick and honest feedback that you can then use to improve your products and / or services.

New customers usually do not provide feedback.

Listen to your customers

Listening to your existing customers and increasing loyalty should be a key priority for any business.

By using effective surveys, you can gain the insight you need to implement crucial changes that benefit your sales.

What characterizes loyal customers?

Customers who are loyal to a specific brand are not as easily affected by availability or price. They are in fact willing to pay more to get the same product or service that they know and like.

Below are other characteristics that characterize a loyal customer:

  • They may consider buying other goods or services from the company.
  • They are more understanding when problems arise and trust the company to solve them.
  • They are happy to give feedback.
  • They make repeated purchases.
  • They are not actively looking for other companies and their similar products.
  • They are more willing to recommend the brand to friends and family.
  • They do not care about competing companies’ sales attempts.

Factors that affect customer loyalty:

1. Expectations

It is important to know the value of what your customers actually get out of your product or service. This includes the market value and the price.

Will the product or service match the expectations of what they paid for. Will you be able to solve a problem for your customers?

2. Service

This is the composite of the people behind the brand. Committed employees, whose role in customer loyalty is often underestimated, and a dedicated customer service.

This is usually where people will get the most value from their purchases. Good service comes from businesses that are customer-oriented.

Although the product itself is fantastic, a less good experience of customer service can unfortunately overthrow a loyal customer.

3. Values

Emotional engagement takes precedence over rational engagement, several studies seem to show. This means that customers judge brands based on how they match their own values

People prefer to buy or get involved in companies that match their personal values, such as social or environmental responsibility.

4. Commitment

No matter how good you may be, people may sometimes need to be reminded of what you have done for them. Customer engagement is about creating an ongoing relationship between customers and the brand.

Commitment is created and takes place through ongoing communication (social media, e-mail, newsletters), customer surveys where customers can comment and loyalty programs.

For example, for member organizations, social forums where customers can interact with each other are especially important.

Every moment of commitment is also a moment of loyalty-winning.

Every time someone opens an app, reads a post on Facebook or sees a newsletter in their email, there is another opportunity for an in-depth relationship.

This is how you can increase customer loyalty

There is no magic trick that is guaranteed to increase customer loyalty.

It’s something you have to work on all the time in different ways, but it’s basically based on your understanding of what the customer needs and wants.

Here are some examples of things you can do to increase customer loyalty, get your customers back and increase their lifetime value.

1. Engage customers

Even if you have the best content in the world, it does not mean that it will drive a lot of traffic to your site forever.

In this way, it’s not always just about creating content for the sake of creating content – it should be engaging.

Sometimes guides, announcements of competitions, shareable posts on social media, collaborations and opinion-related posts can attract engagement.

If you are constantly “top of mind”, the probability increases that customers will buy from you again.

2. Provide useful content

Many people use Google to find answers to their questions or find solutions to their problems. A good way to build trust and start a loyalty process is to produce content that answers Google’s questions and solves their problems.

Here, search engine optimization plays an important role.

By researching users ‘search behaviors, you can produce useful content based on users’ searches that provide them with the answers they are looking for.

In addition, if the content is designed in a way that adds value to your products, it can contribute to both increased brand awareness and increased customer loyalty.

High quality content based on real search behaviors also helps your site rank higher in search results.

3. Interact with customers

By interacting with your customers, you can create a sense of community and belonging, and make customers feel selected.

For example, you can use social media.

There you can inform customers about special offers, news and product releases. The more it feels like a conversation, the more engaged the users become.

4. Utilize user-generated content

It’s also a good idea to use user-generated content – especially reviews and ratings. Research has shown that approximately 84,7 percent of consumers trust online reviews as much as personal recommendations.

For this reason, it is important that you encourage your customers to write reviews, monitor the reviews and try to improve any negative reviews.

Not only does it make customers feel involved and heard, it also boosts your SEO. Google tends to promote sites with good user reviews and ratings.

If you want to give your site an extra push towards the top of Google, you can also implement aggregated reviews or review snippets.

It lets google users see your or your products’ ratings directly in the search results in the form of stars. The more stars, the higher the chance that they will click on to your site.

5. Have a working website

Whether you run an international e-commerce or a local farm shop, it is important that you have a functioning website. As previously mentioned, many people start their shopping journey online.

Websites that load slowly, are difficult to navigate and are not mobile-friendly rarely attract buyers.

6. Be consistent

Consistently delivering what you promise is the most important factor in building customer loyalty.

Customers trust companies and brands keep their promises every time, not just when it suits them.

In fact, if your company consistently delivers great products and services and keeps their promises no matter what part of the business, more customers will turn into loyal customers.

Conclusion

A digital transformation combined with huge new opportunities means that there is a new challenge for you every day. A clear direction and eagerness to do something valuable (for the customer) will never disappoint you.

Do not get caught up in lengthy meetings about strategy, which increases the risk that e-commerce ends up in a kind of management situation.

  • Constantly hungry for more.
  • Stick to your core values.
  • Think of every day at work as a battle against your competitors.

Sources

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https://europepmc.org/article/med/12140857

https://www.emerald.com/insight/content/doi/10.1108/07363769810235910/full/html

https://journals.sagepub.com/doi/abs/10.1177/0092070394222001

https://www.emerald.com/insight/content/doi/10.1108/09604520210451830/full/html

https://www.researchgate.net/profile/Pin-Luarn/publication/220437600_A_Customer_Loyalty_Model_for_E-Service_Context/links/557e88db08ae26eada8dc0ed/A-Customer-Loyalty-Model-for-E-Service-Context.pdf

https://link.springer.com/article/10.1007/s11747-011-0272-3

https://www.emerald.com/insight/content/doi/10.1108/03090560810891154/full/html?fullSc=1

Kevin

This article has been reviewed by our editorial board and has been approved for publication in accordance with our editorial policies.

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