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Customer Loyalty for Small Business

Mind-blowing economics of customer loyalty.

Here are two facts:

It costs 5 to 7 times more to acquire a new customer than to keep an old one.

A 5% increase in customer retention improves profits 25% to 95%.

With low customer loyalty, it’s hard to remain profitable. What do I mean by “low”? “Low” means your competitors’ customers are more loyal than yours. Three things are happening:

  • You’re more dependent on new customers than your competitors are.
  • Therefore, your cost of every sale is higher than your competitors.
  • Your customers are switching to competitors more than competitors’ customers are switching to you.

How would you feel about being in this hole?

I’ve been in it. It was frustrating and embarrassing. For a while, I was too proud to ask for help.

But, I got over the myth of the “self-made” business owner. Everyone in business needs help. I found good teachers.

And, I learned two very important things:

1) This hole is avoidable.

2) How to avoid it.

It started with this humbling reminder…

Customers don’t stay loyal for very long.

Research on customer loyalty reveals 80% of CEOs say they deliver a superior customer experience. But, only 8% of customers agree.

Customers’ preferences evolve. Their loyalty wanes without our attention.

What made customers satisfied yesterday is changing.

Expectations shift with innovations by competitors. They change through experiences with other industries. They evolve with advances in life stages.

We have to keep improving. None of us is indispensable to our customers. Customer loyalty is a moving target.

So, where do we start?

It starts with getting clear about what customer loyalty really means.

What’s love got to do with it?

We love our customers. We want our customers to love us back. Many do.

Customer loyalty is more.

What makes customers loyal is what they actually do.

Loyal customers do these four things.

Loyal customers,

repurchase, resubscribe and renew,

up-purchase, buy upgrades,

cross purchase services that they hadn’t bought before,

and refer others to your business.

Each of these behaviors increases your cash flow and profit.

There’s one thing you need to do to create customer loyalty…

In every service business, customer loyalty is built through one thing: communication.

We’ve boosted customer loyalty for dozens of service businesses. Clients include banks, psychotherapists, retail stores, healthcare practices, technology firms and utilities.

We did that through communication.

Not necessarily more communication. Too much of the wrong communication will drive customers out the door.

You create loyalty when you communicate when, where, why and about topics customers feel are valuable.

You have dozens of opportunities to do this one thing.

Here’s a starter set. These are the kinds of loyalty-building content we’ve produced since 2001.

Website content – We design content that converts visitors to subscribers and customers.

Lead pages – These are web pages used exclusively to sell, cross-sell or upsell services.

Lead magnets – Special content or benefits that subscribers receive by email when they sign up on a lead page.

Blog posts – New content updating subscribers on events, promotions and other happenings.

Service descriptions – Communicating through vivid descriptions of services, tangibles and benefits that distinguish your services.

Email campaigns – Most of our campaigns far exceed open and click through rates, according to email services (Mailchimp and ConstantContact).

Website information architecture – Redeploying content to create pathways that customers follow intuitively toward their goals.

News releases – Generating positive news coverage in reputable business publications.

Social media posts – Facebook, Twitter, Instagram and other social media contributions.

Videos – Scripting or outlining videos and posting them on websites and social media.

Billing statements – Showing customers how to increase satisfaction and decrease costs.

Service Reviews – Discussions to assure customers get the most value from your services.

Service recovery communications – Handled well, this is an opportunity to boost customer loyalty.

Business Proposals – To renew and expand the scope of service contracts.

These are just a few examples of content ideas you could use to increase your customer loyalty.

How much priority should you give customer loyalty?

Do lead generation and customer loyalty have equal priorities in your business?

Should they?

I said earlier that it costs five to seven times more to create a new customer than to keep a current customer. A dollar spent on customer loyalty goes pretty far.

I often discuss marketing budgets with clients. There’s no standard budget portion that goes to customer loyalty. But, I do have this general advice…

If you’re going to invest in acquiring new customers, make sure you have ways to keep them as loyal customers.


A small business case study in customer retention and referrals.

I’m going to talk about the business I’m most familiar with.

My own…Whyze Group.

When I started my marketing consultancy in 2001, I was a one-man shop. Competing against the big marketing agencies on their terms was impossible. I had to compete on mine.

So, I did, and turned one client into dozens of clients over the next few years.

Here’s how it happened…

Boost customer loyalty by communicating…differently.

Most big marketing agencies produced dense reports. These had hundreds of pages of charts and graphs. Clients spent weeks trying to figure out what it all meant.

In contrast, I produced short, scintillating reports. Most were only 40 pages long.

Clients appreciated that I told a story about their customers…what their customers’ goals were, what they experienced, what triggered their frustrations, how to delight them.

While clients gave me two hours for presentations, I usually finished in 30 minutes. I concluded with a summary of observations and recommended actions. Then, I invited managers to question my recommendations.

In the span of two hours, managers agreed on next steps to market their services more effectively.

And, it drove their loyalty to me through the roof.

That’s why my first clients referred me to other businesses.

Customer loyalty is a moving target.

I continued to find more ways of boosting customer loyalty with new content.

After winning a project, I’d engage clients in collaborating with us. This enhanced their sense of ownership in projects. I developed reusable collaboration templates that made the work easier for me and more fun for clients.

More opportunities evolved. These included unique project updates and workshops. The workshops shortened decision times from weeks to hours for my clients.

Producing these extended my days, of course. Those extra hours resulted in loyalty-creating content that has evolved to what I use today.

Many clients hire me repeatedly. They provide dozens of referrals to future clients. (You can see how I helped them increase customer loyalty on my linkedin page.)

Next steps for increasing your customer loyalty…

Loyal customers repurchase, up-purchase, cross-purchase and refer others.

Keeping customers loyal grows profit more efficiently than relying solely on acquiring new customers.

You have lots of options for creating loyalty-building communications.

We can help you find a starting point for building customer loyalty in your business.

I’d love to hear from you. Click here to email me.

2233 South Overlook Rd.
Cleveland, OH 44106

 (440) 785-0547


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