How to Increase Customer Loyalty Easily Using Your Customer Base

Jul 15, 2021 • 4 min read

Tips meningkatkan loyalitas pelanggan

In every business, customer loyalty is simply something that cannot be neglected. Establishing a strong and long-term relationship with your customers is more profitable for your business compared to attracting new customers.

As customer behavior keeps changing and competition among businesses toughens, having loyal customers in your customer base is very valuable. Do you want to know who your loyal customers are and how to have more of them in your business?

First, getting to know your loyal customers and customer base!

Who are your loyal customers? A loyal customer is a customer that sticks to your business and keeps coming back for your products and services. This stays true although you do not have any ongoing promotions or discounts.

They will also gladly recommend your business to their family and friends, bringing in new customers which may end up becoming your loyal customers too! They are your source of positive word-of-mouth that increases your business value.

Your loyal customers can be grouped to form your customer base. A customer base consists of your most engaged customers who consistently bring in revenue for your business. Remember that the Pareto principle states that 80% of business revenue comes from only 20% of your customers! These make up your customer base.

Every loyal customer is different, whether it is their shopping frequency, transaction value, and the length of their relationship with your business. All these factors contribute to their customer lifetime value. This score should be your sole focus in evaluating customer loyalty.

The relationship between loyal customers and customer lifetime value

Customer lifetime value (CLV) is the value a customer brings to your business throughout their lifetime. To calculate customer lifetime value, we can use this simple formula:

CLV = average value of a purchase X number of times the customer will buy each year X average length of the customer relationship (in years)

From this formula, it’s clear that loyal customers will have a higher CLV than regular ones. Those with high CLV are your most valuable customers and they are the most worth investing in.

The relationship between a loyal customer and customer acquisition 

Aside from CLV, another concept related to customer loyalty is customer acquisition. Customer acquisition is the actions or efforts taken by a business to attract or acquire new customers. Customer acquisition is more important for new businesses looking to grow their customer base. But did you know that you can increase customer acquisition with the help of loyal customers?

As discussed above, loyal customers are those who will happily be your advocates in front of their family and friends. Their positive experience with your business is much more credible than the use of ads or other promotional tools. That’s how a loyal customer can help increase customer acquisition. What’s even better is that new customers that are brought in by loyal customers may end up being 18% more loyal than regular customers!

How to increase loyalty in your customer base?

With the many benefits such as increasing customer lifetime value and customer acquisition, nurturing loyalty in your customer base is highly important. How can you do so? Here are some tips you can apply:

  1. Improve customer experience

    To increase customer loyalty, you need to provide an impressive experience for them. Always pay attention to your products’ and services’ quality, and be aware of trends and behaviors that affect your customers. Optimize their omnichannel experience in both your offline and online stores. Provide a simple and convenient way for them to do business with you so they won’t hesitate to keep returning.
  2. Create a loyalty program

    Most of the time, customers need an extra push to be more loyal to your business. You can give incentives such as limited offers, points, or rewards. All of this can be done easier if you have a loyalty program where customers can sign up and start earning points for their every visit. Such a system keeps them motivated to come back and enjoy the benefits that your business offers.
  3. Create a strong engagement

    Lastly, make customers feel that they are more than just your source of revenue by establishing a strong engagement with them. As an example, Starbucks once created an online forum for their loyal customers who love their seasonal productPumpkin Spice Latte. This forum creates a space for Starbucks to communicate and engage with its customers.
    At the same time, customers can meet other people with the same interests. By having a strong engagement, it’s also easier for you to obtain valuable feedback from customers that helps you improve your business.

Loyal customers determine the success of every business. Do not delay applying the tips above to grow your customer base! TADA is also happy to help you create the most suitable solution to increase your customer loyalty. Contact us and start your journey with us today!

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Nida Amalia

SEO and Content Marketing Specialist who loves art, music, and movie.