Building long term relationship with your customer is the single most important thing you can do for your business. Working in Customer Service myself, I don’t even need to pick a single company to demonstrated all the benefits for establishing customer loyalty. There are many factors involved in the process and you have to establish that customer service is not something a department does, every single person represent the company and in the digital age with were a single comment on twitter can end a career you have to be aware that everybody is on board. Creating a customer base is particularly important, but once your customer gets loyal, everything changes.
Let us first take a look at the main reasons, why building long-term customer relation is absolutely necessary to grow your business. First of all, in my opinion is the factor that it is 5-6 times more expensive to attract new customer, that delivering a good service to your existing once. Next is that your loyal customer will step up for your brand and evolve to a mighty influencer how then will spread the word up to eight people, if they are happy with your company.
There is a lot of competition out there today. How good your products or services might be, the probability that somebody is already trying to copy and improve is extremely high, if you are successful. Often the first step might be lowering the price, but there is the next profit from a loyal customer base. Your customers love your brand; this make them blind to see competitors. They are not so price sensitive like first time buyers, which often in the end make their decision on the price, instead of the company.
There are two companies coming into my mind right now, that are well known for their excellent customer relations: Starbucks and Apple!
There are a lot of competitors when we talking about our daily habits of getting a fresh brewed coffee. So why tend the majority of people end up in a queue at Starbucks on a regular basis? The coffee giant created a place, where you are known after your third visit. They make you feel welcome and if you take a closer look, they pay attention that their shops all look mostly identical all over the world, so that you feel like you have been there and just coming “home”. With their loyalty programs, they take care that you are not going elsewhere. You can prepay your beverage (which can let up to a 50% return visit, regarding to Starbucks), get points per visit (which drives 20% increase in visit frequency among regulars). Overall the brand has positioned itself at the best coffee brand in the market, by providing attractive stores designs, high quality coffee beans and (a big driver in the US) free WiFi.
Apple is also a fantastic example of long-term customer relationship. Have you ever tried to discuss the price politics of apple products with an Appel evangelist? They are totally immune and this is what drives the brands success, recording a huge 87% loyalty amongst their customers. Within this there are the true brand advocates who are always pre-ordering new Apple products and as there are so many people who are loyal, this influence other around them, with the attitude ‘If they love it so much, so will I’. In turn this leads to sales and business success.
There is a lot more underlining data out there, that proves how significant CRM (Customer Relations Management) is. The Gartner Group published a study a while back, that line out the 80% of your future profits will come from just 20% of your existing customers. The marketing expert Laura Lake declared in one of her studies that existing customer spend 33% more money than new customers. Now add the finding from Marketing Metrics, that existing customers are likely to buy a product or service from you with 60% to 70% while the probability of a new customer buying is at 5% to 20%.
The importance created his own market which assist companies with the right programs according to their business. The CRM market grew by 12.3 percent in 2015. This shows that if you want to grow a profitable business in any market today, you not only need fresh idea, you also need to take care of your customers from the first day, on all possible platforms.
CRM Market – https://en.wikipedia.org/wiki/Customer_relationship_management
Marketing expert Laura Lake – http://lauralake.com/
The Gartner Group – http://www.gartner.com/technology/home.jsp