Building and retaining customer loyalty is an important strategy in a modern service-based organisation. Your loyal customers are highly valuable, and creating a strategy to retain them is an opportunity to add value to their interactions with your brand.
While retailers utilise some specific tools to build loyalty programs, customer loyalty strategies can be a little different for service businesses and organisations. Let’s take a look.
What is customer loyalty in a service-based business?
A customer can show loyalty in three ways: repeat purchases, spending more with your brand and making word-of-mouth recommendations1.
That’s why a customer loyalty program can be seen as a smart financial decision. In the latest Inside Australian Online Shopping Report, 80% of small and medium businesses said their loyalty program customers spent more than their regular customers.
But while a loyalty strategy is often summarised as those things a loyal customer can do for your business, at its heart loyalty is about relationships – and that’s good for both your brand and the people you serve. Customers want to feel appreciated, happy and valued in order to be loyal to a brand2, and service-based businesses are well-placed to deliver the relationship-building that creates this emotional loyalty.
That’s right: emotional loyalty. When you can create a connection between your brand and your customers, you increase the chances of retaining them2.
How to build an effective customer loyalty program
In order to become loyal to your business or brand, a customer is looking for both financial value and a great customer service experience1. Your role in this exchange is to not only create those experiences and value, but to clearly communicate them to your customers.
Here are some strategies you can use to help attract and retain loyal customers:
Enhance the value of your customer service offering. When it comes to great service, customers want a range of support: advice on the best ways to use the service you’re offering, knowledge about new services you’re launching, help to achieve a goal and an anticipation of their needs1. How can you build on your current service offering to ensure your customers are receiving the best possible support?
Create a customer loyalty program. For service businesses, a loyalty program can take a little more planning than for a retail business (after all, you can’t add a free sample to their next delivery). This, though, is an opportunity to build an offering that speaks to your customers.
Some of the loyalty program rewards that customers highly value are:
- exclusive members-only discounts
- special members-only services
- a premium level of customer service3
All three of which are relevant to customer loyalty programs for service businesses.