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Mastering Customer Retention: Four Best Practices for Creating Loyal Returning Customers

Going viral is great, but if you want to run a profitable business, advertising and social media shouldn’t be your priority. 🙅🏼‍♀️ It might feel great to gain new business, and fruitful businesses do require new customers. Nonetheless, loyal repeat customers are where the real treasure hides.


Studies show that creating and nurturing loyal repeat customers produces substantially more profit.



Why Repeat Customers Are Better Than New Customers


Because I don’t believe in vague statements without seeing hard evidence, here are some quick stats* on why leveraging repeat customers is more profitable than soliciting new ones:

  1. Repeat customers spend 67% more per transaction than new customers

  2. Your most loyal 10% of customers spend 3x more than the other 90%

  3. New customers cost 5-10x more to convert than repeat customers

  4. Repeat customers generate half of all referrals (aka free new business!)


Of course, you can’t have loyal customers without first attracting them, but by increasing your customer retention rate by 5%, you can expect an increase in profits by 25% - 95%!


So, let’s break down the four best practices to keep and create loyal returning customers.


Why People Stay Loyal to a Brand


Before we dig into best practices, let’s talk about why people stay loyal to a brand.


Loyalty is earned but it doesn’t necessarily have to be hard earned by you. 💪🏼 Creating loyal customers can come easy when we align your brand and business with what innately sparks loyalty! You’ll see what I mean in a bit.


Below are the top three reasons your customer base is likely to be loyal.


Customers Stay Loyal Because They Share Your Values


People are likely to be loyal to brands because they share values with them.

This has to do with what’s called “ingroup bias,” or their belief that your brand will further secure their chosen identity.


Be aware, people also choose to avoid brands because of "outgroup bias."


Take the Target drama, for example.


Target chose to represent a specific set of values. Because of this decision, those who believed that shopping at Target would now go against their chosen identity quickly kicked their beloved Target off of the errands list for good and Target’s annual online and in-store sales slipped by 7%.



You can and should hold and communicate values as a business. But it’s worth being aware how this will affect brand loyalty.


Customers Stay Loyal Because They are Satisfied and Had a Positive Experience


Sounds simple, right? Every consumer has different wants, needs and desires. ❤️ When we meet those wants, needs and desires better than our competitors do, we gain customer loyalty.


It may be the efficacy of your product, speed of delivery, access to FAQs, or communication that sets you apart. Every touch point with customers affects their experience and shifts the index of satisfaction.


An easy way to measure customer satisfaction is by asking “how likely are you to recommend our brand to others?” as part of your follow up process. If half or less than half don’t answer with “very” or “extremely”, you have some work to do!


We’ll talk about more specific ways to cultivate a positive experience in a bit.



Customers Stay Loyal Because They Have a Relationship With Your Brand


Customers are loyal to brands they trust and have an emotional attachment to. In other words, customers are loyal to you when you’ve invested in a personal relationship with them.


When you take the time to add a personal touch from your boutique business, remember their name when they walk through the door or set up automated birthday emails or cards (bonus for birthday discounts!), customers feel seen and important.


Transparency and clarity of brand attributes (or qualities & features) is also important. This ties into the "in-group bias" idea. Customers should know who you are, what you offer and that you walk the walk. They should feel confident in your integrity, character and ability to meet their expectations. We don’t want to come off as or operate in an untrustworthy way.



Depending on your business type, customers should also be willing to be vulnerable with you.


For example, if you sell products or services that aid in wellness, do you assure them that their information is completely secure throughout the process? Do you strike confidence in your ability to receive candid health information professionally? Do you continue to build trust in your expertise and encourage them to trust the process?


Just as we build trust and emotional attachments with friends and family, customers are loyal to brands that invest in relationships with them.


4 Ways to Create Loyal Repeat Customers



OK, here we go! It’s obvious that it’s worth creating and investing in loyal returning customers and now we know what turns the wheel. These practices will certainly set you apart as a business as well.


Most (>60%) of people feel the brands they are loyal to are not doing enough to reward their loyalty. Let’s be the exception.


Sow Seeds of Personal Relationship


In order to spark loyalty, ✨ think of sowing into a long-term relationship. It takes actual effort to sustain long-term relationships, even if that effort is simply ‘liking’ their posts on social media regularly.


What else can you do to vie for a long-term relationship? The same things we do for close friends and family.

  • Send a birthday note or gift - 50% off one service or package

  • Share funny, relatable things with them via social media - not just promotions and behind the scenes

  • Surprise them with unexpected offerings, a handwritten note or a ‘thinking of you’ message

One great way to cultivate long term relationships is by hosting ‘customer appreciation’ parties. Christmas 🎄, Summer, Galentine's, whatever it may be, spoil your most loyal customers with food, drinks, fun and exclusive specials.


If you don’t have a physical location, send a thank you video to your email list and offer an exclusive deal with the discount code THANKS or add a freebie to every order for one month of the year (customer appreciation month).



Incentivize and Reward Loyalty


I love loyalty programs. Not only as a marketing professional but as a consumer, I love the use of reciprocity to help simplify the decision making process. Afterall, I don’t really want to have to choose which coffee shop to go to. It’s exhausting. Give me a reason to choose you time and time again and I’ll happily give you my business!


Loyalty programs also allow you to market specifically to your most loyal customers and clients. With a loyalty program, you can offer benefits like double points or earned services or products when they take a desired action such as:

  • Create an Account

  • Subscribe to the Email List

  • Follow you on Social

  • REFERRALS

  • Write a Review

  • Tag you on Social Media

  • Purchase a Specific Product

Studies show that loyalists respond with double the transaction rates on campaigns highlighting new loyalty program benefits. So get strategizing on how to incentivize and reward those loyal customers.


Communicate Frequently


We have to continue to set and meet expectations as leaders in our communities and industries. Are you dedicated to using eco-friendly packaging? Communicate that value. Are you improving a service or product? Let us know all the details!


The best way to guarantee frequent communication is with a marketing calendar. If you want to know more about how to setup a clear, confident marketing calendar, look into my online program - the stress free strategy - where we go over every detail of crafting a profitable marketing plan (including a strategic content calendar.)


SIDE NOTE: please be stingy with the ‘one day sales’. Customers need time to know when a sale is going to happen, how much time they have to redeem the offer and maybe even a bonus last chance. Give them a minute and more than a few opportunities to take advantage of your offer. Even your most loyal customers need proficient communication.


Set Your Sights on Satisfaction


You’ve probably heard the term ‘underpromise and overdeliver’. That’s what we’re going for, here. Everything we’ve already discussed will help you reach new heights in terms of over delivering, as well.


A few things that also help:

  • Friendly staff

  • Great service

  • Easily accessible information

If you really want to get better at this, try thinking of some key performance indicators KPIs that you can measure, track and respond to as a business. It may be as simple as tracking reviews. Don’t be afraid to ask for feedback on how your customer experience could be improved and implement those solutions that have the greatest impact.



Final Thoughts


Not only does creating loyal repeat customers alleviate the pressure of drumming up new business but 20% of current customers will be responsible for 80% of future profits. By sowing into long-term relationships with your clients, you’re sowing into a fortunate future for your business.


I hope this was helpful in crafting some ideas to improve your small business! If you have any specific questions, contact me here. I'd love to help!


With Love,


Renee M Wells

BA, MBA, Cert. Business Analyst

Owner/Founder Bee Well Marketing



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