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The term customer loyalty is a bit of a chicken-or-the-egg situation: Is it a customer remaining loyal to the company — or the company remaining loyal to its customers? Hmmm.

While that’s a bit of a conundrum, one thing is clear: In a world where your competitors are only a click away, customer service and loyalty programs have become the new marketing — especially for growing businesses. Consumers today have access to a seemingly endless amount of product information, and research shows they’ll drop you like you’re hot for another company that offers a bang-up customer experience.

Let’s look at some stats:

  • For every customer who lodges a complaint, nearly 26 others remain silent. (White House Office of Consumer Affairs)

  • 89% of customers have switched brands once or twice in the last year. (NewVoice)

  • 82% felt a service provider could have done something to prevent them from switching. (Accenture)

Loyalty breeds profitability.

Statistics like that prove that when customers don’t feel taken care of, they’ll flee. And since studies show it costs 6 to 7 times more to acquire a new customer than to keep an old one, outpacing your competition depends upon having a happy union between customers and companies. Surely by now you’ve taken great pains to make sure your user experience is excellent, but there’s more to keeping customers than making them happy through that very first sale. You’ve got to entice them to return — and that’s where loyalty programs and online communities come in. 

What is a customer loyalty program?

A customer loyalty program means different things to different businesses. At a basic level, it’s a relationship between a brand and customer. The company offers specific benefits to customers, and in return the customer becomes a steady consumer or brand promoter. It’s a one-on-one type of relationship with a goal of attracting the right customers and create a mutually beneficial, long-term partnership. Loyalty programs are a simple way to keep customers happy, foster engagement, and boost revenue. That engagement aspect is key.

What are online communities?

An online community is a great place for consumers to ask questions, help peers, and share resources. And for the company, online communities are a great way to improve customer relationships, secure honest feedback, and test new ideas. It’s a win-win for both sides, fostering open communications and strong relationships. Best of all, engaging with your customers at this level often takes them from consumer to loyal brand advocates — Yahtzee! As an added bonus, online communities often remove some of the strain from your customer service team, since many customers will turn to the community for answers and support.

But how do you measure loyalty?

Now that you know customer loyalty is worth its proverbial weight in gold, fanning the flames of consumer desire, it should be clear that *tracking* your customer relationships is just as important. A CRM or analytics tool can help you keep track of vital loyalty metrics to judge how your online communities and loyalty programs are performing, as well as let you know how your customers feel about your company overall. Stats like churn, response rates, retention rates, and customer lifetime value can keep you on the right track to stronger customer relationships — the kind that help your business grow (more on that here).

Now with your customer loyalty game on point, perhaps you’ll align with these happier stats:

  • 55% say easy access to information and support can make them fall in love with a brand. (Harris Interactive)

  • 50% use a company more frequently after a positive customer experience. (New Voice)

  • 70% of Americans spend an average of 13% more with companies they believe provide excellent customer service. (American Express)

  • A 10% increase in customer satisfaction score results in a 12% increase in trust from customers. (Institute of Customer Service)

  • Highly-engaged customers buy 90% more often and spend 60% more per transaction (Rosetta Consulting)

Want to learn more about how effective customer service leads to brand loyalty? Check out this free ebook, The Six Questions You Need to Ask When Scaling Your Customer Service.

Salesforce can help you find customers, win their businesses, and keep them happy so you can grow your business faster than ever. Learn more about our small business CRM solutions or join the conversation with #SalesforceGROW.