Episode 9Customer Loyalty
The cost of acquiring new customers could up to 7 times higher than the cost of keeping existing customers. As such, customer loyalty is one of the most important considerations for any business. In this episode, we will take a look into the process of gaining customer loyalty, and how to take advantage of it.
Love Fish, a fish bar in Barangaroo, is a business that knows the value and challenges of acquiring customer loyalty. They first opened a local restaurant in Rozelle, Sydney in 2010, and now have opened a new restaurant in Barangaroo, Sydney. In their transition from a small local restaurant to a large international dining experience customer loyalty has played a key role and continues to do so.
Case Study Key Takeouts
- An enabler to generating customer loyalty is creating a great product that you believe in and having a strong ethos and core values around your business model.
- In order to generate customer loyalty, you need to be consistent in delivering a quality product or service
- Often you might not be able to look after each customer’s individual experience personally. Make sure to train your staff and get them to understand the core values of your brand to enable them to provide the positive experience you want your customers to have.
- Look for ways to personalise the experience of your customers. Love.fish, for example, utilises technology that allows them to record personal details about their patrons like their favourite table, wine, their children’s names and birthdays etc. This can be an incredibly powerful tool to connect with your customers and get them to keep coming back.
- Respond to your customers in real time, and try and reverse any bad experiences in the moment so as not to lose potentially loyal customers.
- Be present in your business. Even though you are undoubtedly very busy with running your business, customers appreciate having personal interaction with business owners and feel that they care about their experience.
Director of Strategy, Marketing and Innovation
Managing Director & Co-Founder
Panel Key Takeouts
- In todays hypercompetitive market, a business can no longer survive without loyal customers, as this drives a long term, successful business strategy
- One way to measure customer satisfaction is using Net Promoter Score (NPS) which measures the willingness of customers to recommend a company’s products or services. Regularly obtaining this metric and comparing it to previous periods can help you estimate the customer’s overall satisfaction and their loyalty to your brand.
- Improving your Net Promoter Score by 5% can yield greater returns anywhere from 25% to 95%.
- One way to gain loyal customers is to be transparent, especially when it comes to the price and hidden fees and charges.
- Another way is proactive customer service. Anticipate issues your customers might have with your product and service and step in to resolve them before the customer becomes frustrated by them.
- Go the extra mile to provide the customer with the ultimate experience where they get value for money. If done right, going the extramile is likely going to leave a good impression with them increasing chances for them to become loyal.
- Retaining existing customers is just as important trying to gain new customers. However, research has shown that it can cost anywhere from 5 to 25 times more to acquire new customers compared to retain existing ones.
- Keeping existing customers is also a great way to attract new ones. Often loyal customers are your greatest advocates and can bring in new customers through word-of-mouth and positive reviews or testimonials.
- Even though customers can now more easily than ever compare your products and offers to others in the market, the Internet has not destroyed customer loyalty. More likely, it has heightened transparency not only for consumers but also for brands. It allows you to more easily measure the interactions with your customers and respond in real time as well as adjust your product and service accordingly.
- You can use the Internet to create customer loyalty by embracing all digital channels where your customers are active and becoming an industry expert. This will allow you to break news about industry changes to your customers rather than have them find out via other sources.
- Keep in touch with your customers with interesting emails, letters, videos, social media posts that are of value to them and keep you front of mind.