The importance of building customer loyalty

Customer loyalty is one of the many crucial elements to success for a small business. Check out these ways to earn repeat business and develop and build customer loyalty.

Customer loyalty is one of the many crucial elements to success for a small business. Check out these ways to earn repeat business and develop and build customer loyalty.

By Tim Dimoff

I’ve written quite a bit lately about retaining employees, but today I want to discuss the importance of building customer loyalty. It’s crucial for every business to build customer loyalty, no matter if it is a retail, manufacturing or a service business. The hard fact is that if you don’t have returning customers, your business will not survive. Studies have shown that returning customers spend around 65-70% more money on products when compared to first-time customers. And customer loyalty helps to bring in new customers through recommendations. 

You can measure customer loyalty by knowing how often you have repeat customers and determining why they are returning to do business with you. Repeat orders or purchases are an excellent indicator of customer loyalty and of their satisfaction level. Social media is another way to gauge customer loyalty. Check your online reviews and don’t hesitate to ask your customers to post reviews. If you find negative reviews, follow up with them. Just the act of following up shows you care, and that will go a long way to building loyalty. Don’t hesitate to address any problems or issues. 

Also, track your repeat purchase rate. This will help you to understand your best customers’ purchasing habits and provide you information for developing promotions or coupons. 

And lastly, use social media to your advantage by developing affiliate marketing with other businesses, bloggers, market sharing, etc. to send new customers to your business.

In addition to the importance of understanding customer loyalty, there are many steps you can take to help develop and build customer loyalty including:

Improve your customer experience. This is important whether their interaction with your business has been positive or negative. Tips for this include getting to know your customers by learning their names and their buying habits. Take the time to go above and beyond for your customers, pay attention and identify any areas you can improve on to keep their experience positive.

Create a customer loyalty program. A customer loyalty program both encourages and rewards loyal customers. This can be as simple as rewards or discounts based on purchasing such as a bonus program, points program, spending program where the rewards increase with the amount spent, VIP rewards program offering special perks for joining, etc. While many of these may seem structured for retail, they can be modified for other types of businesses.

Communicate with your customers. Frequent communication thru newsletters, emails, social media posts, phone calls, webchats, etc. is an inexpensive and highly effective way to build customer loyalty and improve on your customers’ experience. Develop what works best for your business and your customers.

Ask for feedback. A great way to improve and retain customer loyalty is by seeking out customer feedback. This can include surveys or asking questions on phone calls. The point here is to engage with your customers.

Be sensitive to your customers financial needs and restrictions. Consider offering payment options. This can include 30 days with no finance charges, taking credit cards or PayPal, a down payment program with financing, etc. 

Be mindful of how you come across in your communications. This includes written as well as verbal communications. Make sure your employees are always aware of their voice and tone—and that they use proper and respectful language. 

Give customers a reason to be loyal. You can accomplish this by making their experience positive in every way—from their initial contact thru the final sale. The interaction you offer can define whether you develop customer loyalty or become a one-and-done. 

The current business climate is highly and globally competitive. Ensuring a positive experience for your customers creates and strengthens your customer loyalty, which in turn creates a successful and profitable business for you.

Timothy A. Dimoff, CPP, president of SACS Consulting & Investigative Services, Inc., is a speaker, trainer and author and a leading authority in high-risk workplace and human resource security and crime issues. He is a Certified Protection Professional; a certified legal expert in corporate security procedures and training; a member of the Ohio and International Narcotic Associations; the Ohio and National Societies for Human Resource Managers; and the American Society for Industrial Security. He holds a B.S. in Sociology, with an emphasis in criminology, from Dennison University. Contact him at


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