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Customer Loyalty

Customer Loyalty for Small Business

Customer loyalty is an essential source of profit to a small service business.

Here’s what we’ll cover. Click any link:

  • Mind-blowing economics of customer loyalty.
  • Customers don’t stay loyal on their own.
  • What’s love got to do with it?
  • Loyal customers do these four things.
  • There’s one thing you need to do to create customer loyalty.
  • You have dozens of opportunities to do this one thing.
  • How much priority should you give customer loyalty?
  • One small business case study in customer loyalty
  • Customer loyalty next steps for your 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%.

The sources of these data include Forbes and Harvard Business School.

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 the hole. It started with this humbling reminder…

Customers don’t stay loyal on their own.

Business owners are optimists. Who else would gamble our savings on starting businesses?

We believe our services are superior. But ultimately, it’s customers who decide. And, their preferences evolve.

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

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 means in the context of building a business.

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 do four things. Each of these behaviors increases your cash flow and profit:

Renew and repurchase. Loyal customers buy from you again and again. They renew subscriptions with you.

Up purchase. Loyal customers buy upgrades. They trust you and feel that upgrading is an even better deal.

Cross purchase. Loyal customers buy additional services.

Refer others. Loyal customers send other customers to you.

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 can drive customers out the door. (I fired a credit card company that pestered me two or three times a week with mailers.)

You create loyalty when you communicate only when, where, why and about what 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.

One small business case study in customer loyalty.

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. I was competing against multi-million dollar agencies.

Competing on their terms was impossible. I could, however, compete and win on mine.

When I started I had one client. I delivered marketing services that my client recognized as superior. It made them loyal.

The repeatedly bought from me, asked for additional services and referred me to other clients.

I turned this one client into dozens of clients over the years. Doing this was simple. I created more and more communications that my clients valued.

Here’s how.

Boosting customer loyalty by communicating…differently.

Most big agencies produced hundreds of tables and charts of marketing data. They bound these in thick reports. Their clients would spend days or weeks trying to figure out what it meant.

I produced a short, prioritized set of recommendations. The whole report was maybe 40 pages. It was highly visual. Underneath each image, I supplied pertinent facts.

I presented recommendations in an easy-to-follow story. It was common sense, really. Anyone unfamiliar with marketing strategies could understand it.

I usually finished my oral presentations in 30 minutes or less. Then, I invited questions. I even invited executives to poke holes in my analyses.

This resulted in building their trust in my conclusions. They knew exactly what their marketing opportunities were that same day. And, it drove their loyalty to me through the roof.

My client loved the speed and confidence with which his organization could take decisive action. As a result, my first client generated referrals to many other businesses.

Customer loyalty is a moving target.

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

After winning a project, I’d engage clients in planning our work. Clients trusted and enjoyed collaborating with us. We made projects fun and productive. I developed several pieces of reusable collaboration content just for this purpose.

I kept finding more opportunities to create additional persuasive content. These included project updates, emails to client team members, conference calls and workshops.

This extended my days far beyond the client work I was doing. I invested those extra hours in producing loyalty-creating content that was reusable.

By investing in customer loyalty, my clients hired me repeatedly. They bought additional services and provided dozens of referrals to future clients. (You can see how I helped them increase customer loyalty on my linkedin page.)

Customer loyalty next steps for your business

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

Customer loyalty can accelerate growth of your customer base faster than advertisements.

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

We can help you find a starting point. We’ll design an initial loyalty program that you’re comfortable with…meaning it fits into your budget and your work day.

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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