“The business goal is to find and retain customers.” – Peter Ducker.
Customers are the living source of the enterprise. If they can retain a large number of customers who are co-located, loving and loyal, they will always have resources to develop.
According to researches, the cost of having a new customer is 5-10 times higher than retaining an old customer. This mean that you have to spend 5 or 10 dollars to get a new customer while you only need 1 dollar to keep an old customer.
Let’s create loyal customers – People who continue to buy your products and services.
Are our customers really loyal?
In fact, many businesses has failed to build true loyal customers. Research shows that 80% of customers, who have responded business, switched to using another company’s products.
It’s easy to say that customers will leave the brand immediately when they are not satisfied. However, it is not sure that you have retained these customers even though you have met their needs.
Customers don’t decide to be loyal to the brand for the first time buying. Depend on each product/service, the conversion time from a first-time buyer to a loyal customer will be different. At the first time of buying, if they are satisfied with the product or service, the ability to return to purchase will be higher. And that is the opportunity to build & retain customers.
Why are customers loyal?
Customers are never loyal to the business – Customers are only loyal to the “Benefits” they receive. Maybe:
- Saving: A restaurant doesn’t have a delicious meal but still crowded because it is cheap.
- A shop is very expensive, the product is not special but still crowded with beautiful space.
The key to retaining customers is always providing customers with the “value” that their customers want: Tangible and Invisible.
Once customers have the trust and love with your brand, they tend to buy more products and more times.
Levels of customer loyalty
There are 4 different levels of satisfaction, each contains different meanings from which the business can predict customer’s behavior.
Level 1: Meeting customers’ needs.
“Well, this place is fine.” – Customers are in need of something to eat, and this restaurant cooks not badly.
Neutral emotions. However, with this level of satisfaction, customers are easy to convert when there is a better restaurant.
However, if your business does not meet customer’s need, it is sure to fail.
Level 2: Make customers happy
“This is a quite the place!”
Appealing positive emotions. You are at the level of meeting customers’ expectations, but you have not really made customers happy. At this level, the service/product may already exist but if you want to establish a position in the market you need to overcome customer expectations. There are differences and more prominent.
Level 3: Overcome customer expectations
“This meal is delicious!” – The restaurant has advanced one step further, impressed customers.
This means that you already caught the customer’s mind. The possibility of returning customers is higher. Besides having a good service/product, businesses need to show interest in customers.
Level 4: Making customers surprise – “Wow”
– “Wow, what an amazing place!”
At the highest loyalty level, businesses must create positive feelings across the entire journey of customers brand experience.
“Be so good that customers will come back with their friends” – Walt Disney Founder.
ASHAVI - Boost Business By Insights and Technologies