Business people have been talking about customer loyalty for years. However, considering how important it is and how much it is talked about, you rarely see it done well. And you rarely see SMEs that are putting real resource (money, time and effort) into it.

Let’s take five minutes to explore what customer loyalty really means and why you should put more resource into it. In my next blog, I explore some ideas for creating customer loyalty.


Customer Loyalty – a different definition

Most people will tell you that, ultimately, customer loyalty is about, “Getting existing customers to buy more from us”.

Kind of.

Actually, there are lots of customers who keep buying more from their suppliers even when they don’t want to.

Utility companies and banks spring to mind. They have vast numbers of customers who keep buying from them because it is easier than changing; customers who don’t have the time to find a new supplier; or it’s just an easy habit to keep that direct debit ticking over.

These customers keep buying more from these businesses but they are not necessarily “Loyal Customers”.

So, what is a loyal customer?

A Loyal Customer is a customer who, willingly, stays with, or keeps coming back to your organisation, so that you can keep helping them solve their problems. They are an advocate and tell people, whose needs you might be able to meet, about you.

Let’s break this down.

  • When you have a Loyal Customer, they return to you because they want to. They want to retain contact with you. It’s a conscious choice.
  • All organisations solve problems for their clients by supplying products or services that solve these issues (read my blog, Five Conversations to unlock your growth. Conversation #3. How are you solving their problems (Products). Your loyal customers return to you because you have satisfactorily helped solve some of their problems.
  • They stay with you or return because you can help them again.
  • Or, if you can’t solve their problems, they might want to use you as a trusted source of other advice and referrals. In other words, you are on their, “Go to” list and that is often a good place to be.
  • They are so pleased with how you have treated them that they tell other people about your product, service, organisation.

This can be summed up as: customers are loyal when they feel an emotional connection with your business. You are in a relationship with them.


Why we should all want loyal customers

Setting aside all the feel-good reasons about people being so pleased with what we offer that they want more or trust us to sign post them to the right place, there is a clear reason to have loyal customers:

Loyal customers make business sense.

Here is the journey that clients take before they choose to buy from you.

Buyers Journey – KMS Marketing version


Now let’s overlay on to that Buyer’s Journey your time. Now let’s add in your clients’ time.

How long did it take them to decide to choose your business? How much time did it take you to develop and nurture that relationship?

You’ve all invested time into them becoming a customer. Time is effort. Time is money.

Let’s move on to budget.

How much money did you spend on marketing and sales to help your customers reach the purchase point at adoption?

How much money does your, or your sales or marketing’s team, time cost?

Every time you gain a new customer you have to invest time and money to help them through the whole Buyer’s Journey.

Existing customers have already made that journey.

It is much more cost effective to keep them than go after the new.

Every year statistics come out around the cost of a new customer versus the cost of keeping a current one. Whatever the industry or however they do the research, the results are the same: it is more cost effective to retain an existing client than to win a new one.

It makes business sense to work at customer loyalty because loyal customers do your marketing for you. They tell people how pleased they are with your company. They recommend you when people are asking around. They become your advocates, and unpaid ones so they are trusted even more.


Next step: building customer loyalty

I am assuming here that your products or services delight your customers. If they don’t, fix that first.

If they do, and you want to keep these delighted people, then you need to put some decent resource in to it. Seriously. I have met so many Directors and owners in businesses who nod in agreement at everything in this blog. But they don’t give it the budget it deserves.

Rough rule of thumb, if your clients are making a considered purchase from your organisation, then budget the same amount for Customer Retention and Loyalty as you do for awareness marketing activities.

As it is a large topic, I have written a separate blog to help you generate ideas for building customer loyalty. Do head over and have a read.


Blog by Kara Stanford, an award-winning, incisive, methodical marketing professional who uses marketing to deliver results. With over 15 years’ experience as a marketing consultant, she understands the needs of SMEs, balancing marketing rigour with realism

Contact her to find out how she can help you.

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