The Importance of Customer Loyalty For Small Businesses

Too many small businesses focus all their attention on growing their customer base, thinking that expanding their customer base will facilitate business growth. This isn’t, in itself, a bad idea. However, when a focus on attracting new customers comes at the cost of existing customer loyalty, a small business can find itself in a whole lot of trouble. Customer loyalty is essential for any business but particularly, small businesses so looking into a customer loyalty program for them may be beneficial.

How to Build Loyalty

Every new customer that visits your website has likely reached you as a result of a range of different digital marketing practices. For example, a combination of search engine optimization, website design, and pay-per-click advertisements will have likely worked in combination to attract new visitors to your site. Once a first-time visitor is on your website, additional work is then required to ensure this visitor converts into a customer.

Messaging practices, especially SMS and email messaging, are some of the most effective ways of connecting to existing customers, and they are easy to do if you have the right software. Tatango has the perfect software solution that enables your small in-house marketing team to connect with your customers the right way, quickly and easily. Both SMS and email are much more cost-effective techniques than the marketing practices that are used to obtain new customers. However, why is customer loyalty important?

Loyal Customers Means More Sales

Research has found that loyal customers spend much more money than first-time customers. In fact, research from Gartner found that just 20% of your loyal customers generate 80% of your profits. This is because loyal customers are much more susceptible to your marketing efforts. Loyal customers have also been found to spend more money per purchase than first-time customers.

Loyal Customer Customers Support Small Business Growth

Establishing a base of loyal customers helps to support small business growth. This is because having a base of loyal customers provides you with a dependable stream of sales, revenue that is needed to support business expansion. Focusing on loyal customers also helps you to reduce spend on digital marketing campaigns needed to attract new customers. This again further frees up resources that you can use to support your small business growth.

Loyal Customers Benefit Your Brand

If you provide loyal customers with a high-quality customer experience, they are likely to reward your brand by promoting you on social media or talking about the experience to friends or family. This helps to organically increase brand awareness and grow your customer base. Essentially, this means that your loyal customers provide you with a free marketing opportunity. Not only is this form of marketing free, but it is also highly valuable. This is because online shoppers are more likely to trust personal recommendations than paid advertising.

Loyal Customers Require Less Attention From Your Staff

If you own a small business, then it is likely that you have a small team of employees. A small business that focuses on loyal customers is more likely to have staff available for tasks other than routine customer service demands. This is because loyal customers are likely to have fewer questions and therefore demand less attention. This means that your staff are free to focus on other tasks that promote small business growth.