Make new friends, but keep the old; those are silver, these are gold.
There’s a good chance composer Joseph Parry wasn’t thinking about marketing when he wrote those lyrics, but it’s great loyalty marketing advice.
Many people think of loyalty and marketing as two different strategies. Marketing is often focused on bringing in new customers, and loyalty is all about keeping those customers coming back again and again. There’s a lot of evidence that building brand loyalty by marketing to your current customers is a strategy more likely to yield long-term success.
According to Marketing Metrics, the probability of selling to an existing customer is 60-70 percent. The probability of selling to a new prospect is 5-20 percent.
Returning customers spend on average 67 percent more than first-time customers, according to research by Bain.
Forrester research shows it costs five times more to acquire new customers than is does to keep current ones.
But wait. There’s more. Loyal customers are not just repeat customers who choose your product or company without even considering other options. They will also frequently recommend your product or business to others. And that recommendation is powerful.
According to Nielson research, customers are 77 percent more likely to buy a product when learning about it from family and friends.
Trust is an important reason why recommendations are so effective. Nielsen research shows 92 percent of consumers around the world said they trust earned media, such as word-of-mouth or recommendations from friends and family, above all other forms of marketing.
In fact, according to McKinsey, word-of-mouth is the primary factor behind 20-50 percent of all purchasing decisions.
Those are some mighty compelling statistics. They probably have you wondering if you are doing enough to build brand loyalty with your customers. According to Nielson, 78 percent of consumers are not yet loyal to a particular brand. So what can you do to build loyalty with your customers?
Open as many paths to connecting with your customers as possible. Learn how they think, feel and behave toward your brand. Talk to them. Read their comments about your brand online. Interact with them on social media. Make it easy for them to tell you what they think. Consider formal research, informal research and daily interactions to determine who your customers are and what they care about. Use these insights to understand what it is about your product or service that brings your loyal customers back for more, and make sure those elements are consistently delivered across all brand touchpoints.
A successful marketing campaign may drive new customers through your doors, but if the brand experience doesn’t meet their expectations, they won’t return.
If you can find ways to make a simple transaction connect with a customer on an emotional level, you’re on the right track. Go the extra distance to meet and exceed customer expectations. Push to find more ways to make your customers’ lives easier and better. Make sure everyone in your organization understands their role in delivering a positive customer experience.
Consistency helps re-affirm your customers’ trust and credibility in your brand and helps clarify your differentiators. Plus, a consistent message helps you stand the test of time by keeping your brand top-of-mind.
Mistakes happen. When they do, over-deliver on fixing the error. Stay focused on meeting the needs and expectations of your customers. This is not the time to be overly corporate. Be human and real, and customers are more likely to give you another chance.
Composer Joseph Parry was right when he said old friends are gold, even if he wasn’t talking about marketing. Brand loyalty translates into intangible brand value as well as a quantifiable measure of your brand’s success. Get it right, and you’ll be singing a happy tune.
This article originally appeared in the Corridor Business Journal.