Customer Loyalty: Five Steps to Become a Loyalty Leader

Sep 22, 2021 | Blog

Customer and Brand Loyalty

For the fifth year in a row, Amazon has been listed as the loyalty leader in the U.S.A. according to Brand Key’s annual loyalty rankings. The New York-based brand loyalty and customer engagement research consultancy examined 1,260 brands in 112 categories in 2021. Rounding out the top five were Apple, up two spots to #2 in smartphones; Netflix, down 1 spot to #3 in Video Streaming;  Domino’s Pizza, up one spot to #4 in Pizza; and Amazon again, down 1 spot to #5 in Video Streaming.

This is the customer loyalty league, and these brands were among the most likely to meet customer needs and expectations in their respective categories.  These companies are the loyalty leaders! They occupy top positions for consumer satisfaction because they value customer loyalty as more than a marketing term or KPI to be measured. It is an asset to be developed.

Why is Customer Loyalty Important?

Here are some good reasons why building customer loyalty is important.

  • Acquiring a new customer is more expensive than retaining an existing one
    • Loyal customers produce higher conversion rates
    • Loyal customers visit regularly and spend more
    • Operational costs (complaint handling etc.) of loyal customers are lower
    • Loyal customers are advocates of the brand and promote it to their friends and families for free.

All of these help drive revenue and growth in a healthy way so loyal customers become an asset on the company balance sheet.

Then the question becomes, What’s the right path to becoming a loyalty leader and building customer loyalty? Here you have 5 concrete steps:

5 Concrete steps to Build Customer Loyalty

Step 1: A clear business objective

You need to have a crystal clear understanding of your business objectives. Who are your customers, what are their segments, what are their expectations, and what type of experience do you want to deliver in order to secure their loyalty? These critical questions must be answered! Remember that your company has to be enthusiastic about delivering on promises in order to reach them. But first, make sure that your company is fully aligned and committed to the ultimate goals of securing customer and brand loyalty. Amazon seems to be very clear about the customer loyalty vision statement: “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

Step 2: Assess your current performance

No matter where or how you start, the journey begins with the acknowledgment that customer experience isn’t defined by you. It’s defined by your customers. You need to have an outside-in approach and assess yourself from the consumer’s point of view. Ask what they need and how you perform in a structured way. There are various metrics to measure the customer loyalty score, and the Net Promoter System (NPS) can be a good fit. Moreover, it would be better to build a Voice of Customer loyalty program to gather as much insight as possible and analyze feedback continuously. After listening to customers who say that they want to make a pizza order on the beach or at a game, Domino’s announced its plan to deliver pizza wherever their customers are. The brand listened to consumers and adapted service to suit demand – a smart CX move executed in a bold way.

Step 3: Develop a proper customer experience strategy

Customer Experience Strategy is an organization’s complete plan to enhance the experience of their customers both when they are interacting with the organization directly and when they are using its products and services.   CX strategy helps your organization conceive a better understanding of what resources are required to make this happen and guides the prioritization and allocation of determined activities.  Netflix’s personalization approach towards building customer loyalty is a good example because the level of personalization experienced by users is what keeps them coming back for more.

Step 4: Turn CX strategy into action – Design the moments that matter

Great experiences are hardly forgettable and occasionally remarkable.  We can be architects of the moments that matter! Your CX strategy guide should become a set of experience designs. These designs cover customer journey maps, “wow moments” and are consistent at all touchpoints. Customer experience, customer and brand loyalty during the whole customer life cycle are all that matter.  Apple is very clear about that. When you are inside an Apple Store, you can feel the brand value throughout their store design. (Please see our blog post about Experience Design!)

Step 5: Continuously improve customer experience

Being good enough is not good enough anymore, so you have to continuously improve your customer experience towards building customer loyalty. You might be happy with your customer loyalty score, but don’t become complacent. Continue to listen to the voice of your customers, measure and understand what’s missing, monitor the company level’s maturity, and cultivate a growth mindset. This attitude will guide you to identify the gaps to bridge for reaching your loyalty leader goal. Once you find the root causes which prevent your company from delivering better experiences, coordinate efforts around your commitment as described in step 1.

Conclusion

Cultivating loyal customers takes time, effort and energy.  Ongoing investment is what keeps the relationship afloat. There is one simple truth about customer loyalty: you cannot buy it; loyalty must be earned.  To improve loyalty, prioritize customer experience and do everything possible to build trust while making your customers’ lives easier. To do this, in today’s fast-changing CX environment it becomes a must to adopt tech-prone and fact-based decision-making processes. This is the only way that makes you a loyalty leader. Implementation of high-tech CX management systems enables you not only to think outside the box but act outside the box. Look into Alterna CX’s CX automation system powered by machine learning technology.

 

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