The A to Z of marketing is designed to give you a flavour of the multitude of components that need to be considered when marketing a business.
This week we look at L = Loyalty.
Loyalty is an important element of any marketing strategy for any business – and comes in various guises, depending on the type of business model you are operating.
How important are your clients to the continued success of your business? It seems like a ridiculous question, because it is obvious that clients are the lifeblood of any business. Without customers you simply do not have a business, just an expensive hobby that won’t last very long as you will eventually run out of money (unless you are Roman Abramovich).
Unfortunately, many businesses view marketing purely as a function that generates client interest and then feeds enquiries into the pipeline for the sales team to then convert. There is no doubt that this is one element of the role that marketing plays. However, once a prospect has been converted into client it doesn’t stop there. There should then be a huge marketing effort to build a relationship with that client in order to foster loyalty to your brand and company.
You may have heard before that it can cost 6-7 times more to attract a new client than to generate the same revenue from an existing client. What is more, maintaining an existing customer is much easier and requires less effort! The key is to making the customer feel like a valued client and then fostering brand loyalty within them.
This can be achieved in a variety of ways:
- Service excellence – create such an awesome customer experience that they will never desire to go anywhere else. This is an essential component whether it is a low value, regular purchase type of business or a high value, infrequent purchase.
- Loyalty rewards – this is financially incentivising the customer to stay loyal through schemes like loyalty cards or member schemes. If you are truly offering service excellence this method shouldn’t be needed but it works particularly well when trying to get your clients into an “autopilot” habit – i.e coffee shops, supermarkets, petrol stations etc.
- Price – offering existing clients a reduced renewal deal. Unfortunately most businesses get this wrong, such as insurance companies, financial services and utilities, offering the best prices for first time clients – and then putting the price up in year 2 (which then drives them away). Madness – a lesson in how not to foster loyalty.
- Recognition – purely showing clients’ that their custom is truly valued and appreciated.
Loyalty is the hidden goldmine of marketing. Your existing clients hold the business growth that your company is seeking and it is right under your nose.
If you can foster loyalty you will benefit from repeat purchases, frequency of purchases (potentially), added value purchases, cross selling of products and a solid foundation from which to base your marketing strategy.
What’s more, if they become true brand ambassadors (they really love you) they will do your marketing communications for you – which has become even easier and more powerful with the recent social media boom!
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