Acquiring new business is no mean feat. It reportedly costs 500% more to entice a new customer to a brand than it does to keep existing ones on board.
Yet, if businesses compare how much of their efforts are spent on customer acquisition versus customer retention, where would the balance lie? Those that do focus on customer loyalty may notice an evolution. Where once loyalty schemes were considered a ‘card + points’ scheme, this is now being reimagined. Customer loyalty is earned by a business over time. To remain sustainable, it should be based on building an emotional connection, not a financial transaction, with the customer.
This infographic by West explores some of the psychological theories behind customer loyalty. Unexpected rewards play into the need to ‘surprise and delight’, which releases a dose of feel-good dopamine to the brain. Likewise, shared values and a common social identity play into the desire for customers to trust the brands they interact with, making a well-articulated purpose a valuable asset in the digital age.
Positive interactions are also defined by how quickly businesses respond to customer complaints and queries, as well as accessibility. More people are coming to expect the full gamut of contact options, from social media platforms to 24-hour instant messaging capabilities.
With a small decrease in customer churn signifying a potential spike in profit, how are you thinking smarter to maintain a bond with your customers?