The average retail customer spends about 67% of their money with brands and retailers with which they are already loyal. Customer loyalty is important for any business because it represents a long-term commitment from your customers, increasing the chance that they will stick with you for a longer period.
In addition to helping build trust between your business and customers, loyalty can also help increase repeat sales. Loyal customers are more likely to buy from you again because they have already established a relationship with your brand, which makes buying from you easier than going through the process of selecting another brand.
It is easier to upsell and cross-sell to loyal customers
It makes it easier to upsell and cross-sell. When customers trust a brand enough to buy from it again, they are much more likely to purchase other products/services from that brand too. Brands often offer discounts for both first-time buyers and repeat customers on their websites or through in-store promotions. It is easier for them to upsell and cross-sell to loyal customers because they know exactly who will be interested in those products/services based on their previous purchases. To know how your brand can increasing effeciency of your re-marketing campaigns, read this blog on the
Customer Loyalty decrease customer acquisition costs
Customer loyalty decreases customer acquisition costs because it reduces the need for advertising and marketing campaigns that would normally be required to bring in new customers. This means more money in your pocket!
When you are starting and trying to grow your business, one of the most difficult things is - getting new customers. Your marketing costs will be high, and you will need to invest in advertising to reach new customers.
If you have loyal customers who buy regularly from your store, then this reduces the cost of new customer acquisition because they already know about your products and services.
Not only do loyal customers help with cost reduction, but they also increase customer lifetime value (CLV). This means that each customer will spend more money with you over time than a new one would have done if they were not acquired by word-of-mouth or other marketing methods.
Loyalty means more word-of-mouth marketing and referrals
Word-of-mouth marketing is one of the most effective ways to promote your business. According to research conducted by Nielsen, 92% of consumers trust recommendations from friends and family above any other type of advertising. Loyal customers are more likely than non-loyal ones to refer their friends and family members to your business, so it pays off to keep them happy.
Loyal customers will be your biggest advocates if you deliver on your promises and give them the experience they expect and deserve. Loyalty means more word-of-mouth marketing and referrals. Customers who feel like they have a good experience with a business are more likely to tell their friends and family about it, which leads to increased sales.
Loyal customers spend more
Loyal customers are more likely to buy from you again, and they spend more when they do. A study by the Harvard Business Review found that loyal consumers spend significantly more than other consumers — an average of 77 percent more.
They buy more often, and they buy more expensive items. This is because they trust you, so they are willing to spend more money with you. They also have an incentive to buy from you, since they do not have to worry about getting their money's worth. In fact, according to a survey by American Express, 69% of consumers are willing to pay more for brands they trust, and 62% of consumers said they would pay more for products from companies that provide exceptional customer service.
They help you build a better product
The best way to know what your customers want is to listen to them. And loyal customers are the ones who will tell you the truth about your product or service. Loyal customers help you build a better product because they will spend more time using it and provide feedback about what you are doing right and wrong. They are also the ones who will stick with you during hard times.
The more often a customer visits, the more likely they are to give you feedback about what's working (or not working) with your business. And if someone comes back regularly, chances are good that they'll be honest with their feedback — which means that it'll probably be accurate as well! If something isn't up to par, your regular customers will let you know about it — so make sure you listen.
It's no secret that repeat purchases are the goal of any retail business. The most loyal customers are those who buy from you again and again. This is because they have built trust in your brand, which makes them more likely to shop with you than with other companies. And at a time when it is estimated that more than 50% of any brand's total revenue comes from repeat customers, building customer loyalty should be any brand's first focus.
To know more about how your brand can build customer loyalty and increase repeat sales by up to 180%, read this blog on the comprehensive guide to increasing repeat sales.