The 3 pillars of customer loyalty for small businesses: How to convert your customers into brand advocates

Posted on Oct. 23, 2015 by Canada Post in Marketing solutions

When customers return again and again, your business thrives. If they love you enough to talk you up and recommend you to friends, family and coworkers, you’re creating brand advocates – every marketer’s dream.

Brand advocates, according to studies, spend twice as much as your regular customers. And they go out of their way to recommend you, creating new sales and new customers. Another study that looked at the economics of loyalty found that increasing customer retention by just 5 per cent boosted profits between 25 and 95 per cent. So, what’s the secret to creating these super-fans?

READ ALSO: New neuromarketing study reveals brain's response to different marketing channels

Pillar 1: Exceptional customer service

Did you know that great service can trigger your customers’ brains to experience the same reactions as feeling loved, according to an American Express Service study? In the same way that people in love delight in talking about each other, customers can’t wait to tell others how amazing you are when you provide great service.

Do you make the effort to discover what your customers are really buying? Marketing trailblazer Ted Levitt believed that, “People don’t buy a quarter inch drill-bit, they buy a quarter inch hole. Study the hole, not the drill – the drill is just a solution for it.” If you know why your customer needs that hole, you can win their undying loyalty by providing a better solution than a drill-bit. If they’re looking for a way to join something together, glue might work better than a screw!

As a small business owner, you treasure your customers and you know what it takes to make them feel valued. But the rest of your team may not live up to your standards - yet. Time spent training your staff to deliver your personal level of service brings big payoffs in repeat business. If your customers get great service no matter who’s looking after them, they will remain loyal brand advocates

Tip. Empower your staff to resolve problems. An unhappy customer is having an emotional reaction, so it’s better if your staff can help at once. Maybe it’s accepting a return a few days past its deadline or removing a less-than-satisfactory entrée from a bill. What’s lost in immediate profit will have a long-term payoff in repeat business and referrals.

In fact, customers’ problems are an opportunity to win their loyalty and turn them into brand advocates, as long as they feel that you’ve listened respectfully and made a sincere effort to solve the problem.

Pillar 2: Unique customer experience

Small business owners who collect customer data know that people are increasingly comfortable with sharing their personal information and buying habits. A study by Accenture found the same thing – if they trust the brand, customers are willing to have their data tracked in exchange for an improved shopping experience. During the course of your relationship, they’ll expect you show you’ve been paying attention to their individual preferences with recommendations for items and services which interest them and offer targeted discounts.

Ask customers for their names – and use it. One of the sweetest sounds humans hear is our own names, according to research on brain activation. Do your best to use customers’ names. If they’ve ordered online, make sure your confirmation email’s subject line is something like this; “Karen, your order for a better cat brush has been placed.” If you market via direct mail or email, many studies show that putting a person’s name on it increases the opening rate – which increases your conversion rate.

Tip. Make it even more personal. Add your own name to any communications. Think about the difference between receiving an automated “Do not reply” email versus opening one from that says “Hi Leslie, thank you for choosing to shop at Small is Better! Let me know if there’s anything I can do for you. Alex.”

Any business can personalize customer interactions. An e-commerce store can create a positive personal touch by something as simple as a post-it note with a hand-written thank you inside the parcel. The yearly anniversary of a brick and mortar store is great opportunity to send a signed card inviting local customers to drop in and say hello.


Pillar 3: A loyalty program

A loyalty program helps sway the purchase decision in your favour AND it’s a great way to collect information to offer customers even more personalized interactions, strengthening the bond between you. If your loyalty program offers rewards that delight customers, it increases the emotional bond.

Canadians like loyalty programs:

  • 9 out of 10 of Canadians actively use at least one loyalty program.
  • The average Canadian has more than 6 loyalty cards in his wallet.
  • 63 per cent of Canadians say that they’re more likely to shop with a business that has a loyalty program.

Millennial Canadians like movies and books as rewards. While Millennials are the least likely age group to collect loyalty points, 2 of their favourite loyalty programs reward them with free movies and books rather than cash rewards, according to a survey by Abacus Data. They are far more likely to use a loyalty program that’s easy to access from a smart phone.

Small businesses may worry about the extra time or complexity of starting and maintaining a loyalty program. It can be as simple as stamp card or a discount once they’ve spent a certain amount of money.

Or, there are online tools that help small businesses run their loyalty programs, starting as low as $20 a month.

Small businesses can use this brain trick to make your loyalty program more powerful. We are more likely to finish something that’s already started, as proved by a recent consumer motivation study. Customers at a carwash were given 2 slightly different loyalty cards. While customers in both groups needed 8 stamped squares to qualify for a free carwash, one card only had 8 squares and the other card had 10 squares. Anyone who got a 10 squares card immediately received 2 “free” stamps (“Let me just get you started”). These customers were almost twice as likely to complete their loyalty card, compared to the people who received the empty 8 square loyalty card. Electronic loyalty programs also use this brain trick to increase customer engagement by handing out points just for signing up.

Never forget that loyalty is generated by emotion. It comes from how your customers feel about your business. It’s affected by how well you meet your customers’ desire to feel truly valued. Whether it’s a plumber showing he cares about your home by slipping clean covers over his boots at the door or a clothing store sending a mini-catalog with the reassurance that every item in it comes in the particular customer’s size, your customers want to feel that you know and care about them. In return, they’ll care about your business and, as brand advocates, make a point of spreading their love for you among their social networks, both face-to-face and digitally.

READ MORE: Retailers find print catalogues drive sales, online and in-store


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