From the course: Small Business Secrets

The role of customer loyalty

From the course: Small Business Secrets

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The role of customer loyalty

- If you ask the average business person, how do you get more customers, odds are the answer's going to be something like, marketing or sales, but in small business, in particular, the answer is customer loyalty. That is the best way and the one that requires the least investment on your part. In fact, I consider it one of the secret weapons of how I built my business. I put more emphasis in customer loyalty than I put into marketing. It's so powerful because of three things that happen when you have loyal customers. Number one, you retain customers easier. That means they stay with you longer, and they buy more from you. Number two, you get more referrals from customers, meaning they're going to tell other people about what you do, which is a very cost effective way to get new customers. And third, they provide great reviews, and in a social media world, where everything you do as a small business is right there in the internet, you need great reviews from your customers. So, in this video I want to talk about three general aspects about customer loyalty that you want to consider. The first is the investment that you're willing to make. Now sometimes when we talk about an investment to get new customers, people are talking about how many hundreds or thousands of dollars we're going to put into advertising this month or quarter, but you also want to think about what your investment is going to be in customer loyalty. How much money are we going to spend on making our customers happy, on giving them gifts, on making improvements to the way in which we do business? By creating a customer loyalty budget, you'll find it easier and more comfortable for you to spend money on making customers happy. The second way to improve your customer loyalty is by developing savvy. By savvy I mean how well you know your customers. Do you really know what they care about and what they're interested in? The best way to get that information is ask. Maybe send them a survey or just ask them in person. What do you read? What are you interested in? What are your hobbies? What do you care about? We want to get to know this information because it's valuable for us when we come up with strategies to help them be more loyal to the business. And number three is we want to harmonize with the customers. Now I say harmonize because harmony means that we're not exactly doing things the same way that our customers are. We don't want to copy them or mimic them. We just want to complement them, and this is a great discussion to have with employees and people that work for you. You want to educate them about your customers and discuss how we can better serve them, better adapt the way that we naturally do things for our customers' needs. For example, one small business that I coached had an elderly customer base, but they hired employees who were teenagers or just out of college. They had a discussion as a company about how they could better harmonize the way that they acted and worked with their customer base. So, they needed to slow down a little bit, speak up a little bit more, and instead of sending a text message, make a phone call instead. Little changes that you make like that can increase your customer loyalty. Customer loyalty can be the secret weapon for your small business. Remember, three things happen when we build customer loyalty. We'll retain customers, we'll get more referrals, and we'll increase the quality of our reviews.

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