{"id":61796,"date":"2023-11-30T16:58:41","date_gmt":"2023-11-30T05:58:41","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=61796"},"modified":"2023-12-01T13:39:28","modified_gmt":"2023-12-01T02:39:28","slug":"building-brands-on-customer-loyalty","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/au\/blog\/building-brands-on-customer-loyalty\/","title":{"rendered":"How Customer Loyalty Turns SMEs Into Brands That Last"},"content":{"rendered":"\n

When it comes to long-term business success, customer loyalty is key. In today\u2019s global marketplace, customers have become digital-first<\/a> shoppers with thousands of suppliers at their fingertip. They can purchase any product imaginable in a heartbeat and being top of the shortlist when customers consider a purchase has never been more impactful, especially for SMEs. The key to making it there? Customer loyalty.<\/p>\n\n\n\n

What is customer loyalty and why is it important?<\/h2>\n\n\n\n

Customer loyalty epitomises how customers feel about your brand, how willing they are to make a repeat purchase and whether they would recommend you to others. In today\u2019s hyper-connected world, customer loyalty is much more important \u2013 and harder to earn. Customer expectation is at an all-time high and customers are more willing to switch brands<\/a> if they have a bad experience. They also share their experiences, good and bad, more frequently. In the trust-based economy what buyers tell their friends has become key, and business success balances on customer satisfaction more than ever before.<\/p>\n\n\n\n

Loyal customers are also the biggest spenders. In fact, a 5% increase in customer retention has the power to increase profit by five times that amount<\/a>. Just as significant, existing customers are 50% more likely to try new products and spend more on average than first-time buyers. Customer loyalty drives the bottom line and the digital economy has unlocked its impact.<\/p>\n\n\n\n

Quantifying loyalty<\/h2>\n\n\n\n

The way customers shop online today has also opened up new lines of communication. More customers interact with brands directly rather than buying via third-party channels and personalising these interactions is an opportunity to make customer relationships more meaningful and appealing. With the right tools, your SME can leverage this connection and gain valuable insight into existing customer loyalty. As a result, you\u2019ll also be able to develop tailored strategies to boost loyalty based on what your customers value most. <\/p>\n\n\n\n

The Net Promoter Score (NPS)<\/h2>\n\n\n\n

Actionable data \u2013 and lots of it, is key to understanding your customers and increasing loyalty. Many successful businesses use the Customer Retention Rate (CRR)<\/a> as a tool to gauge whether customers are choosing to stay with them. However, the CRR omits the human factor \u2013 how customers feel about your brand and your products. But a more complete picture can be obtained by using the Net Promoter Score (NPS)<\/a>,<\/strong> a simple, two-minute survey that transforms customer sentiment into an actionable metric.<\/p>\n\n\n\n

By asking customers how likely they are to recommend your brand to a friend on a scale of 0 to 10, the NPS<\/strong> subtracts the percentage of \u201cDetractors\u201d (scores of 6 and under) from the percentage of \u2018Promoters\u2019 (scores of 9 and above) to calculate a comparable loyalty benchmark.<\/p>\n\n\n\n

Simple, right? But the NPS is deceptively powerful, and high NPS scores are proven to correlate directly with growth. In fact, Harvard Business Review called the NPS the single best predictor of growth and the one number you need to grow<\/a> as a business.<\/p>\n\n\n\n

While it provides a strong benchmark, the NPS alone is not complex enough to understand where loyalty originates and how to improve it. To overcome this, consider adding an open-ended question to your survey like \u201chow can we improve your experience?\u201d, or \u201cwhat do you like most\/least about our product?\u201d By asking customers what matters most, you can develop a loyalty strategy that targets real needs, rather than blowing the budget on perks that don\u2019t rate. 
Something to keep in mind is that the NPS varies greatly across industries. For example, if you\u2019re in the car rental business, a score of 15 may be stellar \u2013 but in the streaming industry, the same score could be abysmal.<\/p>\n\n\n\n