What is Customer Loyalty?
Customer loyalty is the notion that customers are faithful, devoted and attached to specific products and companies that satisfy their needs. Loyalty is generated from attitudes and feelings customer’s associate with a particular product which then guides buying behaviors such as re-purchasing and advertising a product to others through word-of-mouth.
Building Sustainable Customer Loyalty Programs
Companies are constantly seeking ways to build customer loyalty. Good customer loyalty programs generally offer rebates, incentives and deals on products to ensure customers don’t take their business elsewhere. However, well designed customer loyalty programs that protect against customer erosion go beyond short-term incentives and focus on generating long-term business results. Customer loyalty is best created when customers feel they are an integral part of the product development process and your company’s first priority. Cultivating collaborative, reciprocal relationships with customers should be an organization’s main focus.
There are several signs that indicate your customer is becoming a “loyal customer”: they purchase in greater quantities and with increased frequency; and most importantly, they talk about your product often recommending it to others.
Customer Loyalty: Challenges Facing Businesses in 2011
“In today’s crowded marketplace, creating loyal, engaged customers is more important — and more challenging than ever.” – Mark Johnson, 360 Loyalty Marketing
Traditionally, companies looking to increase customer loyalty have focused all their marketing efforts on building long-lasting nurturing relationships with their customers. However, developing customer loyalty has become increasing more difficult for companies to manage. This is partly due to a continued shift in focus from seeing customers as passive players in the decision making process, to making them more active collaborative partners. Companies need to rethink their approach and create innovative ways to integrate customers into the product development process.
With this change in the customer management landscape how can companies effectively rise to the occasion and tackle customer loyalty issues head-on? In a recent article, Mark Johnson of 360 Loyalty Marketing outlines trends in customer loyalty marketing in 2011. Here are some key factors to consider:
“Voice of the customer programs are an important strategy for increasing customer loyalty.” According to Johnson, in 2011 we should expect to see more companies implementing “voice of the customer programs” as a key component of their corporate strategies. A recent IBM study that included over 1,500 CEO’s from different industries all across the world, identified that “getting closer to the customer” will be an important strategy and key focus for many businesses over the next 5 years.
Is your company listening to the “voice of the customer”? OneDesk offers Enterprise Voice of Customer Management solutions.
“Relevancy will be a key driving force of customer loyalty, and customer engagement.” Today’s customer thinks of a good loyalty program as something that is customized to their exact unique, individual needs. Customer data contains valuable information related to customer ideas and preferences needed to build relevancy and deliver exactly what your customer wants. Johnson stresses the need for “product managers to use the information they collect strategically to show customers they’re listening and to give them what they’re asking for.”
OneDesk believes that customer feedback is an essential component in the product development process. Identify, elaborate and incorporate your customer’s valuable feedback with OneDesk’s customer engagement solutions.
“The goal of customer loyalty initiatives will be to engage customers.” Marketers may understand the importance and recognize the value in tracking indicators such as “spending” or ”number of transactions’, but Johnson says that in 2011 more focus will be given to customer engagement when designing profitable loyalty programs. After all, as Johnson explains in his article: “with engagement comes loyalty, advocacy, trust and passion – the soft side of the customer relationships that directly impacts the bottom line.” Listen and engage with your customers through OneDesk’s customer portal.
Johnson’s main points highlight the challenges facing businesses in the next few years. Does your company have the right tools and resources to be successful in 2011?
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