They say the success of our businesses often depends on the frequency at which we keep in touch with our customers. You may be wondering who “they” are, those mythical beings that impart wisdom on the rest of us. In this case, the identity of “they” is not as important – because “they” are right!
According to Jordan Media, “87% of businesses do not ask their customers for more business, yet your customers are 3 times more likely to do business with you.” That means existing customers are more profitable than new ones. That means you need to build brand loyalty among these customers.
Brand loyalty is not just about keeping in touch
The mortgage broker who helped my husband and me purchase our house kept us on his email and direct mailing lists for 2 years after the closing. He constantly sent us information about purchasing a home (which we had already done, and weren’t planning to do again for at least five years) and refinancing (at higher interest rates than we currently had). One day, I finally emailed him and asked to be removed from the lists.
Naturally, he asked if he had done something wrong. He hadn’t done anything wrong when we worked with him on our first home loan; but the information he was sending wasn’t useful to us, so I opted out.
You see, my mortgage broker wasn’t thinking about anything more than keeping in touch with the customer so that the next time we needed a home loan, he could help us. Keeping in touch doesn’t build brand loyalty on its own though. Instead, he should have thought about what we, as new home owners, needed. If his newsletter had been about home decorating, or resolving disputes with neighbors, or changes in home insurance policies for my area, I would have gladly stayed on the list.
Sometimes social media is the best, most unobtrusive way to stay connected to customers, as opposed to constantly emailing or direct mailing them, because they can opt-in. Sure, social media how lower response rates than email, but it’s a better vehicle for building relationships that could be more profitable in the long run.
We live in a world of happenstance, where we can’t constantly be monitoring everything relevant to us at all times. Social media is a better way to connect with customers because it keeps the brand at the top of their minds without bombarding them with so much information they opt out. Your fans may not purchase today, tomorrow, or even three months from now; but when they need the product or service you are offering, they will remember that you give lots of coupons, or have lots of people who like your updates, or share lots of useful and relevant information. They will come to you first.
Creating higher switching costs is an easy way to keep customers from going to a competitor, but make sure you do it right! The most notorious industry for high switching costs is the cell phone industry, with exorbitant contract cancellation fees.
I am not advocating that you take the same stance as the cell phone industry by any means. But I do think you can create high switching costs no matter what your product or service is.
For example, take Dan Schawbel. He is simply THE authority in personal branding. We’re friends, but even if we weren’t, I couldn’t stop following him on Twitter and Google Reader if I tried. He shares the best, most comprehensive content about personal branding today. Even if I only read a fraction of what he puts out, I’m fairly up-to-date on what I need to be doing to manage my career in the social age.
That’s a switching cost. It costs me energy to switch to another source for personal branding advice. How can you introduce switching costs to your personal brand?
One easy way to create brand loyalty is a customer reward program. The program doesn’t have to be anything fancy. Here are some ideas:
- sharing coupons with fans and followers on certain social media accounts
- emailing special promotion codes to customers who purchase a certain amount
- hosting giveaways specifically for repeat customers
- celebrating a holiday like Alice is doing with Earth Day
- providing a special free report in your subscriber footer
These programs also don’t have to be expensive. You can offer products and services you already have as incentives, as many companies do. And why not? True fans want more of what you already have.
In the book The Influentials, the authors explain why one American in ten tells the other nine how to vote, where to eat, and what to buy. Wouldn’t you like to get your products and services into the hands of these people?
Well, chances are, a percentage of your customers are already influencers in your category; you just need to find them and activate them. Your most loyal customers are your fan base, and often are the best people to share their experiences with your company. It’s not enough just to have influencers; you also need to give them a conversation starter and a place to have that conversation. For example, many companies offer brand loyalty incentives, such as a gift card when you refer a friend. By giving your loyal customers reasons to talk about you, you can create buzz and gain new customers.
When companies continuously give coupons to their loyal customers, it effectively lowers the price of the product. One retail chain in St. Louis put coupons for 15% off in the weekend paper, every single weekend. Their customers became accustomed to discounts, and stopped purchasing anything at full price!
Brand loyalty is not just about coupons, promotions, and discounts. It’s not just about giving everything away for free on your blog. Those are merely vehicles to get your fan base talking or give your fan base a reason to stop back. If you plan to use discounts to create brand loyalty, make sure your promotions are irregular and unpredictable. This even gives customers more incentive to follow you on social media outlets.
What tips about building brand loyalty would you add to this list?
Monica O’Brien is the author of Social Pollination: Escape the Hype of Social Media and Join the Companies Winning At It. She also serves as the Director of Digital at Fizz, a word of mouth marketing agency. You can also read Monica’s blog, Social Pollination.