Businesses want customers. Repeat customers. Loyal customers.
But what are loyal customers?
They are drawn to our offers, they engage with us, they're happy with and what to share the outcome of that engagement, and because we've built trust they're willing to repeat that process over and over.
Loyal customers, though small in number, will spend more money more frequently and they will share their positive experience with their friends and colleagues.
They will become our evangelists.
How Loyal are the Most Loyal?
The Top 10% will Spend 3x More
Your top 10% will spend 3x more than the average customer and the top 1% will spend 5x more.
For companies who have an online presence, the ROI on returning and repeat customers is eye-opening and shows us why building a solid connection with existing customers is paramount.
• In the US, returning or repeat purchasers, who represent only 8% of your visitors generate 40% of your revenue.
• The revenue of 1 repeat purchaser is equal to that of 5 to 7 new shoppers.
• Repeat purchasers account for even more revenue during the holiday season and times of slow economic growth. (Adobe)
This is why cultivating the relationship with your existing customers is so important.
Emotional Connection = Greater Lifetime Value
An emotional connection is achieved when people can connect the dots of their values, wants, and ambitions to a brand and its offers. An emotional connection to a brand makes a consumer feel better.
If you are able to build an emotional connection with your customers you will see greater spending, increased lifetime value, and more brand advocacy as a result.
In fact, after a two-year study customers with an emotional connection were found to:
- Spend up to 2x or more with their preferred retailers
- Have a 306% higher lifetime value (LTV)
- Stay with a brand for an average of 5.1 years vs. 3.4 years
- Recommend brands at much higher rates: 30.2% vs. 7.6%
Customer Churn is Preventable
67% of customer churn is preventable if your customer service is on point. (thinkJar)
One way to ensure that you have the opportunity to intercept a customer on her way out is to be approachable and accessible to your customers.
If the customer already feels a connection they will be open to solutions rather than ready to flee from a bad experience.
This can make the difference between losing or keeping a loyal customer.
Brand Disappointments can be Overcome
47% of customers sever ties with a business after a brand disappointment. (Accenture)
No one is perfect and mistakes in business are inevitable. It's how you handle those missteps that will be the difference between keeping a customer and losing them to a competitor.
Being transparent with customers will go a long way in building the type of relationships that can survive a disappointment and move on from it.
There is plenty of research showing that loyalty can be developed by building trust and forging an authentic connection with your customers. Podcasting is a modern marketing tool that can do just that.