How to Build Customer Loyalty and Increase Revenue

A recent survey of retail loyalty by Colmar Brunton published in RetailWorld April 20th issue notes that “30% take advantage of their supermarket loyalty card but do not believe it adds value to their shop”!


To me this result rings alarm bells. Many of the people in this 30% group are not necessarily loyal and open to shopping at a competitor.  Why?

It is possible that they fall into the oft quoted statistic based on research that came out in 2006*:

67% of people cease trading with a business because of perceived indifference, i.e. they did not know if the business loved them or not!

Many businesses full into the trap of creating a loyalty or reward programme and primarily offering specials via a newsletter and other marketing.

Loyalty is about creating a strong relationship by getting to know customers and prospects.  It’s about acknowledging their achievements and events not necessarily just related to their purchasing behaviour.

In building customer loyalty and repeat sales a business confirms:

Rewards are often used as a way of acknowledging loyalty but more designed to drive buying behaviour.  “Present your membership card when buy 2 widgets and get 1 free”, price bundling are great examples of this.

But, if a business wants to create loyal customers and ensure they become repeat, profitable customers then they must do more than make purchase offers based on past purchases.

Prices don’t drive loyalty.  Perceived value drives loyalty.

A business should to ask itself 3 questions:

  • “What unique value does our product and service offer?”

  • “What do we need to do to ensure that our customer service and the benefits of our products deliver such unique value that they create loyal, repeat clients?”

  • “How do our prospects and customers want to communicate with us, about what, when and how often?”

Answering these questions will assist businesses to develop customer relationship development strategies that encourage loyalty through value rather through pricing and discounting.

Social media is also essential to enabling a business to get to know their customers and prospects better AND to better interact and communicate with them (subject to permissions).

Technology in the form of Customer Relationship Management (CRM) systems like Nimble is key to building loyal relationships. The collection of data, use of the knowledge gained from the data and the efficiencies in communication using technology not only increases revenues but reduce acquisition and sales costs.

If you want to build Customer Loyalty and Increase Revenue ensure that customers believe your business offers value for money and they “know that you love them”!

The author Ross Keating is a specialist “Client Orchardist” of more than 20 years helping established businesses to achieve revenue targets or grow revenue by farming customer, prospect and contact databases and implementing effective CRM strategies.

Call Ross on +61 416 629 609 or email [email protected] to book an 1on1 phone conversation to discuss how your business can build customer loyalty and increase revenue.