According to Phillip Kotler, a true entity when it comes to marketing and business, customers can be identified on four levels:
Loyal customers – always buy from the same brand;
Split customers – loyal, but fans of 2 to 3 different brands;
Fickle customers: they change brands all the time;
Unfaithful customers: they have no preference whatsoever;
Customer loyalty involves several factors, including another concept that is sometimes confused with the definition of a loyal customer, which is customer satisfaction .
Let's clarify these concepts?
What is customer loyalty?
Customer loyalty occurs when, at the customer's own request, there vp business development email lists is a repeat and consistent purchase of a product or service from the same brand/company. Furthermore, there must be a feeling of positive, satisfactory experience – this is where we consider customer satisfaction – and a perception of value in relation to what was purchased.
In other words, according to Kotler's definition, a loyal customer is a convinced customer who always buys from the same brand, regardless of the existence of cheaper or even better alternatives.
Customer loyalty vs. customer satisfaction
In the concept described above, it is clear that customer satisfaction is one of the issues that involve customer loyalty. Therefore, we are talking about different things, but they complement each other. Customer satisfaction is a metric used to measure and establish a level of satisfaction – as the name suggests – of a customer in relation to their interactions with a product, service or experience offered by a company.
A widespread way of measuring this satisfaction is through the NPS – Net Promoter Score -, in which, through surveys, it is possible to know whether, in fact, satisfaction is being achieved or not.
Customer loyalty strategies and tactics
Loyal customers exist for any type of company and any type of business. Some models allow the adoption of very robust and complete strategies, such as SaaS companies that implement the Customer Success methodology to retain, build loyalty and transform their customers into brand ambassadors.
However, it is possible to ensure this loyalty in other ways, through the updating and evolution of products/services, integrations with other solutions or even the creation and development of new products. One company that executes these tactics well is Apple.
Since the iPhone boom, the company has been trying to offer products and solutions so that its customers can always use its products and services. Currently, in addition to the iPhone, there is the iPad, the Apple Watch and several other gadgets that communicate and integrate with each other, and are also exclusive for the consumption of services such as Apple TV, Apple Music, Arcade and its own streaming service.
They try to “fence off” all the exits so that their customers always see them as the only solution they need.
Faced with a decline in iPhone sales, the company launched the Apple Card . It is an attempt to boost smartphone sales again and offer advantages and benefits for the acquisition of its other services and products through its card.
Sometimes, without even realizing it, customers end up becoming loyal to the brand because they have such easy access to the entire range of products offered.
Customer Retention vs. Customer Acquisition
A loyal customer to your brand or company can be up to five times cheaper than acquiring a new one. They can even account for up to 65% of all sales made in a business.
According to research conducted by Frederick Reichheld of Bain & Company – the creators of the Net Promoter Score ), by increasing customer retention by 5%, a company can increase its profits by between 25% and 95%.
How to retain customers
A proven and effective way to build customer loyalty is by adopting the Customer Success methodology . Some people still see this as the creation of a specific department within a company, but it is actually about creating a mindset in which the entire company and all its employees must adopt a Customer-centric culture .
The focus should be on ensuring that your customer achieves the success they desire with the product or service they purchased from your company. Whether it’s making more sales, better managing their maintenance operations, better controlling their finances, etc. The focus should be on ensuring that the objectives of the customer are achieved, maintained and evolved.
It is important to consider that every point of contact between a customer and your business must ensure a positive and satisfactory experience . Every relationship established should be seen as an opportunity to delight the customer.
The service and support offered must function as specialized consultancy on the product/service in question and must ensure that the customer obtains the maximum possible efficiency through the use or application of what was purchased.
All these practices, combined with a marketing strategy that is also focused on the customer, via the purchasing journey and the consumer journey, favor the emergence of effective upsell points, that is, improving and further enhancing the initial purchase made.
