Creating Customer Loyalty in a World of Change and Choice

Fifty years ago, consumers were fiercely loyal to products ranging from cars to colas. That loyalty was frequently baseless and often passed from one generation to the next. If I drove a Chevy, so would my offspring, and for years, the three U.S. automakers counted on it. When a variety of better-made, inexpensive imports arrived in the 1980s, GM, Ford, and Chrysler never saw them coming, because they never thought their customers would go elsewhere.

Loyalty to companies of every kind ended in the ‘80s, much to the chagrin of mom-and-pop video store owners who lost their loyal customers to Blockbuster, a company with deep pockets and a wider selection. By 2013, Blockbuster had lost their loyal customers to Netflix, a company offering streaming video and original content.

The lesson learned through the ‘80s and ‘90s was that consumers weren’t loyal to GM, mom, pop, or Blockbuster. By 2000, consumers had become smart, critical thinkers with many online options, no mindless loyalties, and no need for a salesperson to tell them what to buy.

This year, 58 percent of consumers of any given product or service will switch from their previous choice. Yet, customer loyalty is crucial to the success of any business. How is it possible to maintain a customer’s loyalty in a world of constant change and increasing choices? Here are three ways:

Help Your Customer

Ask a grocery store worker where the chili powder is, and they’ll give you the aisle number and on which side of the aisle it’s located. You’ll quickly find the chili powder and buy it. Customers arriving at your website should have the same, simple experience. Analyze the various paths consumers take to arrive at a completed sale, and which paths make customers abandon the site. Find ways to simplify the journey for online visitors. If you’re using Google AdWords, don’t have one general ad that leads to your homepage. Customize AdWords to show up in several specific searches that will take customers directly to what they’re looking for. A customer searching for a product should be able to click on your Google ad and be taken directly to the item they seek.

Listen to Customers

Customer service is a company’s lifeblood. Eighty-two percent of people stopped doing business with a company because of bad customer service, and 85 percent of those have warned others about doing business with the company. Often, those warnings were issued on social media. Responding quickly to customers’ needs, whether by phone, email, or social media, is the best way to keep a customer’s loyalty.

Offer a Customer Loyalty Program—Maybe

There are 3.3 billion loyalty memberships nationwide. The average household has membership in 29 loyalty programs. Of the 29 memberships held, the average household uses only 12. Offering members occasional discounts is no longer enough. Companies must find ways to interact with loyal members, like offering a tiered system for products and service giveaways depending on how much customers spend, or having occasional after-hour sales events for loyalty members. Don’t waste time and money on a loyalty program unless you have a unique way to reward members.

Studies show it costs six to seven times more to get a new customer than it does to keep a current one. If you’d like some strategies for keeping the customers you have, give McFadden/Gavender a call.