Customer acquisition is not only expensive, but it’s also one of the hardest parts of running a business. While every company needs to acquire new customers, what makes a business grow and succeed is having loyal customers.
Focus More on Customer Loyalty than Customer Acquisition
Gaining customers’ trust and loyalty takes time. It’s a long-term investment, but once achieved, you’ll save money, enjoy higher and predictable revenue, and ultimately, build a sustainable business.
Data shows:
💰 It’s up to 16x more expensive to bring a new customer up to the same level of profitability as an old one.
💰 A 5% increase in customer retention yields more than a 25% increase in profit.
💰Loyal customers spend 31% more money than new ones.
Customer loyalty goes beyond customer retention. It also means having the same customers with larger contract sizes or for a longer period of time.
Moreover, when you strive to build and maintain customers for life, your loyal customers won’t just keep coming back:, they’ll also bring family and friends with them.
People are bombarded with tons of ads online. In a saturated market, recommendations from friends and families are more valuable than online reviews. Loyal customers can turn into brand advocates capable of attracting buyers outside your usual audience with a higher conversion rate than non-referral audiences.
Building Customer Loyalty through Process Improvement
When we think about building and increasing customer loyalty, we often relate it to improving customer experience (CX). And oftentimes, when we think of customer experience, we only look at the relationship between the customer and our client-facing employees. But a customer—as I’ve said in previous blogs—does not experience a department: a customer experiences a company. To successfully build a loyal customer base, you must improve all your processes throughout your organization.
While there’s a lot of CX involved in building and maintaining customer loyalty, achieving customer loyalty takes more than just a great customer experience design. It also means having a system to gather and implement new ideas to improve customer experience throughout the customer lifecycle. It’s having a process for process improvement.
In a process-based culture, it’s not an individual idea that matters. What makes the difference is not a new template or a new app. Your competitors can copy your ideas and implement them in their operations or in their customer experience design. What matters is how you get to your ideas. What gives you a competitive edge is when you are continuously coming up with ways to improve your processes to make the lives of the people who experience your processes better, both the customers and the employees.
Most organizations go about their day-to-day business, and it’s not until something goes wrong like when they lose legacy clients and A-players that they realize they need to change. But when you continuously improve your processes, particularly those that provide the most value to your customers, you are placing yourself in a better position to be proactive about preventing problems.
The Choice Is Yours
There’s a very clear choice here moving forward: a company can continue to do business with new customers, build that acquisition engine and start with new customers over and over again, or invest in the long game by incrementally improving processes over the entire customer lifecycle—creating loyal customers, predictable revenue and a sustainable business.
In love and respect,
Hilary Corna
