WHAT IS CUSTOMER LOYALTY?

Customer loyalty is when a person or organization does business with your brand on a repeat basis. Does that sound like something you can take for granted? Before you say “yes,” or even “I think so,” consider that the Havas Global Meaningful Brands Study of 2019 found that 77% of brands could vanish from the face of the Earth completely, and it would hardly be a blip on the radar of most consumers.

No matter how great your products or services are, or how many times a customer has bought from you in the past, their future purchases can never be taken for granted. 

But don’t panic. The challenge of earning customer loyalty is a healthy thing for a business, one that represents an opportunity to continually check in with your values, mission, and cross-departmental alignment. Let’s explore not just what is brand loyalty, but how to build this growth-sustaining phenomenon in authentic and meaningful ways.

What is the Meaning of Customer Loyalty?

Hey, wait, didn’t we just answer this question? Well, yes, we discussed the basic definition of customer loyalty. But when it comes to understanding the true meaning of customer loyalty, consulting the dictionary is just the beginning.

Customer loyalty means your customers trust you. Okay, that’s a pretty basic definition too. But in action it is anything but basic. Today’s customers are obligated to trust their vendors, providers, and consultants with not just their livelihood and well-being, but an increasing amount of sensitive data. Winning customer loyalty means you are honoring and valuing this trust, as well as earning it over again with every renewal or transaction.

For businesses, especially those serving other businesses (you know, B2B companies), achieving customer loyalty means you’ve managed a lot internally as well. It means from the top down, every one of your employees is committed to providing customers with a great experience. That includes a specific set of priorities and behaviors, each of which build trust:

  • Empathy: Whether your customers are happy as larks or extremely dissatisfied about a failure in service or products, they all still universally want empathy. Stepping into their shoes and understanding what they feel, need, and want is not just the key to resolving negative customer experiences, but also to conceiving of new service offerings or products that will grow customer loyalty.
  • Gratitude: Making customers feel special and valued for doing business with you is another behavior that drives loyalty. 68% of customers leave a business because they perceive the business is indifferent toward them. While discounts and promotions are one easy way to show gratitude, I encourage you to move beyond the discount mentality as well—more on this in a later section.
  • Conscientiousness: Lastly, customers want your business to behave as though you care about doing your work well. This might be part of your mission, vision, and values statements, but if every employee isn’t walking the walk, customers won’t be coming back.

A business where empathetic, grateful, and conscientious relationships are valued and rewarded will earn the loyalty of customers and employees alike. People want to feel seen, heard, and valued. 

What are the Types of Customer Loyalty?

In her book Keep Your Customers, Ali Cudby defines three types of customer loyalty:

  • Lazy Loyalty: These customers buy repeatedly out of convenience, plain and simple. If another brand becomes more convenient for them, they will leave yours without a backward glance. There is still only upside to treating these customers well but spending marketing dollars or investing other resources to retain them is often a lost cause. Consider the finding from Zodiac Metrics that 50-80% of customers are one-time buyers no matter how amazing a company is. If your lazy loyals keep coming back for more, that is itself something to celebrate.
  • Limited Loyalty: These customers are long-term repeat buyers who are somewhat interested in their relationship with you. But on the flip side, that doesn’t mean they necessarily love doing business with your brand. They might remain loyal due to a switching cost, a barrier to exit, or the simple fact that there is no better alternative. In these scenarios, you have won their long-term business, but not through emotional engagement and connection. In fact, their main interest in the relationship may be thinking about whether or not to continue it when a convenient opportunity to exit arises.
  • Lucrative Loyalty: These customers are those who are excited about the fact they get to work with your company. They not only purchase from you consistently themselves but also refer other customers to your business and leave you reviews on social media. Identifying and gathering feedback from this group can help you understand how limited loyals could become lucrative through messaging and offers. But those insights are usually better-applied to simply attract more lucrative loyal customers through product design and marketing that addresses the needs and values of this profile. 

Along the spectrum of “we are just looking for the best deal” to “we love your company and would never work with anyone else,” where do most of your customers fall? And who are you marketing to? Regardless of these answers, remember that any type of customer loyalty is never something to be taken for granted. It takes the average customer between 3-6 purchases to consider themselves loyal to a company, but it only takes one bad experience to send them back out into the market looking for another option.

How to Build Customer Loyalty

Now we come to the practical steps of how to build brand loyalty in B2B customers, though these strategies will work for B2C as well. But since B2B customers have a longer buying cycle and may buy less-often, it’s important to be extremely intentional about how you take these steps.

  • Gather Data: First, to build customer loyalty you need to know your customers. This means understanding what it is about your business that attracts their support. What you hear may align with one or two of the types of customer loyalty above, or you may meet customers along the whole spectrum of loyalty motivations. Aside from asking about your business, don’t forget to ask about them. What information do they want to learn? What are their pain points adjacent to your business?
  • Make a Plan: Once you have all the data, it’s time to translate it into actions that either enhance the benefits you discovered or remove the blockers to deeper loyalty. For instance, if a customer told you they only stay loyal to you because of price, they may also share insight about what they need beyond your current services. What are you going to do with that information?
  • Apply Your Purpose: Part of your plan should include how to make feedback from customers visible across the departments at your business. If marketing is able to collect great insights from a customer, but then the support or customer service team doesn’t get access to their feelings and perspectives, the customer might be confused or even alienated next time they reach out. This is called creating a holistic, intentional customer experience.
  • Giveaways and Discounts: Lastly, based on what you heard, you can probably think of some ways to offer add-on services or promotions to your existing and new customers. This is great insight! However, discounts don’t really build loyalty, and they won’t get you remembered. Have you opened the promotions tab on your email inbox lately? Rather than attracting and retaining customers who want more for less, consider other ways you can make them feel special with personalized outreach and clear, consistent, excellent service.

Define What Causes Brand Loyalty at Your Business with Alignmint Growth Strategies

Every business can find simple ways to upgrade the customer experience and build loyalty. But when these objectives historically haven’t been clear, the internal effort to get the whole team inspired and on the same page can be its own blocker to customer loyalty. 

Alignmint Growth Strategies specializes in consulting with B2B companies to build brand loyalty from the inside out. We not only pinpoint the trust and loyalty blockers happening in your customers, but also potentially your employees. We help devise back-end systems and structure unique to your business, rewarding the behaviors and outcomes you want. This leads to explosive growth, a more rewarding work environment, and more satisfied customers. 

Contact us today to learn more about how we can help you.