(taken from the first chapter, read the whole chapter at www.customerloyaltyplaybook.com)
- More profit, The first one or two purchases generally cover the customer acquisition costs. Only after these do you realize profit from this customer.
- More revenues, Loyal customers buy more.
- More referrals, They are so happy they can’t help it.
- Not as price sensitive, resulting in higher margins.
- Prompt payments, which provides you with cash flow.
- Creates an upward value spiral, Loyal customers interact with an engaged staff who then provide more reasons for loyalty – causing staff to love their jobs.
- Competitive advantage, Who can compete with your upward value spiral?
- Reduced servicing costs, Efficiencies are attained because loyal customers are already set up in your order entry systems, your delivery schedule, your financial records, your email list, your customer surveys. They know who to ask for and are familiar with your company’s process.
- More forgiving, If a mistake does happen, it’s less significant given the overall relationship. Your ‘fix’ is even more proof to sing your praises.
What if your customers were loyal and you were able to bring these savings to your bottom line. How much more profitable could your business be? Research says that it only takes a 5% increase in customer loyalty to bring an extra 25-100% profit to your bottom line.