Using CRM to build customer loyalty
What is customer loyalty?
Customer loyalty describes the positive relationship a shopper has with a business. When someone has a good experience and is pleased with your product or service, they’re more likely to continue choosing to shop with you.
Loyalty also needs an emotional connection; customers may love your product or service, but they also need to trust you and feel valued.
the percentage of loyal customers more likely to spend with you
profit increase, when increasing customer retention (loyalty) by just 5%
Why is loyalty important?
People that know and trust your brand create a loyal customer base. This leads to more sales, with shoppers more likely to buy from you than your competitors. This includes repeat sales from those who choose to shop with you even if it means paying slightly more.
Positive feedback from loyal customers, via word of mouth or online, also helps you reach new audiences and generates further sales.
The benefits of customer loyalty can vary from business to business. For example, for some, the value lies in the repeat sales it brings. For others, it’s the ability to reach new audiences through loyal customers’ referrals and recommendations.
How can CRM software help?
Shoppers expect a smooth, personalised shopping experience. Providing a great service goes a long way to building trust, strong relationships and a loyal customer base.
Given that just one instance of poor service makes 33% of customers consider shopping elsewhere, it’s important that you monitor every interaction with your customers and aim to make each one positive. Customer Relationship Management (CRM) software has a range of features, as outlined below, that can help you achieve this, and build customer loyalty.
Personalise loyalty programmes
Creating personalised loyalty campaigns is a great way to provide a unique customer experience and make people feel valued.
Use the sales data you hold to monitor purchasing patterns and establish loyalty trends, helping to:
- win new customers. Offer first-time customers discounts off their first 2 or 3 purchases to build early loyalty
- build medium term loyalty. Encourage repeat customers to come back by offering a discount off their next purchase
- reward long term loyalty. Make regular and long-term customers feel valued by recognising their loyalty, such as offering a members’ discount
Enable customers to share positive feedback
Responding to customers’ feedback and offering great service can contribute to making people feel valued and building loyalty. When they share these positive experiences, among family, friends and online review forums, for example, this can generate further sales.
CRM features provide the tools you need to create brand ambassadors out of your loyal customer base. These include:
- referral rewards. Enable customers to recommend your business to others, in return for receiving a ‘refer a friend’ discount voucher
- product reviews. Positive comments will increase engagement and generate more sales. This can either be on your website or, if you don’t have one, independent product review sites
- social media. Linking your website to your social media channels makes it easier for customers to share their positive experiences more widely. Once they follow you on social media, their friends then see your business; potentially introducing you to a whole new audience
Recognise diary dates
Marking special dates with an offer can help convert one-time or occasional customers into long-term, loyal supporters. Consider:
- recording when each customer first placed an order with you, or signed up to your loyalty programme, and send free loyalty points to mark the date
- rewarding your most loyal customers from the previous year with a discount code. Use your sales data to personalise it to customers’ preferences
- if you have customers who shop with you during specific seasons or months, time marketing around these dates to help secure future sales
It’s important to assess the success of all your promotions. This will give you clear insight into what works well and is worth repeating, and what might benefit from a different approach. There are various ways to measure loyalty, such as:
- tracking customer data. By tracking sales and interaction history, you can target your marketing according to, for example, each customer’s level of spend, what they buy and when they shop
- sending out customer satisfaction surveys. Offer a discount to all customers who complete a survey, which provides quick, honest feedback
- check in with an email. Ask loyal customers for feedback on what they like best about your company and what would make their experience even better. Offer them a free reward, such as loyalty points or a discount code, as a thank you for responding
- monitoring discount codes. Monitor the number of discount codes that have been cashed in. Compare them with the ones that haven’t and decide if you want to engage with these customers differently
The key to building loyalty is considering it a long-term, yet everyday goal. It’s about consistently providing positive customer experiences.
Over time, you can use the customer data your CRM software holds to help you identify the customer types that most benefit your business, and how you can best serve them. You can then target your marketing to most appeal to these specific audiences.
An important step is to measure the success of your activities and promotions, then build on the success of the most effective ones.
If loyalty is one of your business goals, think about which of the above methods best matches how you want to engage and reward your customers, and use CRM software to help you achieve this