Customer Loyalty

Not least because one already knows a lot more about existing customers and their purchase history than about any potential new customer, it is cheaper to increase customer loyalty and to encourage them to make additional purchases than it is to try and gain new customers.

Of course, there are products that can generally only be sold to a customer once in a lifetime, such as houses, swimming pools and other extremely durable, capital-intensive products. However, even with these products, one can supply customers with additional products or services at a later date, such as care products or renovations to maintain or increase the market value. With investment goods that wear out more quickly, such as cars, the customers can be offered additional products and services just as well. Furthermore, there is possibility of selling a new product to the customer as a replacement for their own aged product, such as a new car or a younger used car as a replacement for their own old car. And for consumer goods and everyday commodities, such as food or sanitary products, one generally does not need to wait too long to be able to sell the very same product to one’s customers once again Thus, there are enough possibilities to make more sales with existing customers.

Examples of measures to increase customer loyalty include:

  • Prior to purchase: Discounts or free gifts.
  • During the purchase: Preferential treatment, such as express delivery or a personal adviser.
  • After the purchase: Premiums, gifts, exclusive offers, customer magazines and electronic newsletters.

Here, a popular means of increasing customer loyalty during the past few years has been the customer card. In this way, companies have been able to access personal information about their customers in situations where it is generally not possible, such as details about purchasing behaviour in retail stores. This information can then be used for targeted advertising and direct marketing campaigns.

One also shouldn’t underestimate the potential to become regular customers of customers who make claims. On one hand, the customer’s claim provides the welcome opportunity to access information about how one can continue to improve one’s product or service. On the other hand, customers like to return to those businesses where they know, from their own experience, that they will not be abandoned with their problems.

With all customer loyalty measures, one should make sure that the good product and good service is provided before the customer loyalty measure is put into action, since only a satisfied customer will become a regular customer.

Author: Thomas Hainke