Pay More Attention to Loyal Customers!

5 Feb

by Joel R. Evans and Barry Berman

Too many firms concentrate on how to woo new customers and, thus, they do not pay enough attention to what they can do to gain the loyalty and increased patronage of their repeat customers. For example, when was the last time that YOU ran a special sale just for current customers, communicated with your current customers via a phone call or direct mail piece, encouraged current customers to recommend new ones by giving the former a gift for doing so, sent birthday, anniversary, or holiday cards to current customers, offered extended shopping hours just for current customers, etc.? Unless you are actively engaged in all or most of these activities, you can do a better job in this area.

Why It Is Vital to Target Current Customers, as Well as New Ones

  • It is more efficient to serve repeat customers than to heavily promote to lure new ones.
  • Often, new customers are lured because of a special sale, buy goods that have a low markup to the company, and then switch to a competitor when it runs a sale event. Repeat customers are more apt to buy a full range of merchandise, not merely discounted items. This means that the firm can reach its profit margin goals.
  • Loyal, ongoing customers are the backbone of every business. And in today’s highly competitive environment, these shoppers cannot be ignored or else they may be won over by the competition.
  • Revenues can be increased (not just maintained) by placing greater attention on repeat customers. These people can be encouraged to shop more often and to purchase more on each trip to the store.

    Hints for Targeting Current Customers Better

  • Develop a database with the appropriate customer information. This could be done by giving your shoppers a small prize for filling out a short form and then updating the information periodically. Computerization is not necessary to do this, although it helps.
  • Set up some type of frequent-shopper program that can reward people for their continued patronage. The program does not have to be complex. For instance, many car washes give out punch cards (or a similar variation) whereby customers can earn free services based upon a certain number of washes.
  • Communicate with these customers on a regular basis. Mail (E-mail) them a letter at least quarterly. Call them at least once per year. Customers are often quite impressed when they receive “friendship” rather than “sales pitch” letters and calls. People like to feel appreciated.
  • Run special events for good customers. This also lets them know how important they are to the firm.
  • Offer extra services, such as free delivery or more liberal re turn policies, for good customers.
  • Do not reward your new customers at the expense of the current ones. Think carefully about having promotions that offer benefits to new customers that are not available to current ones, such as reduced credit terms for first-time car buyers. Try to run promotions in a way that also offers benefits to current customers, such as also having special trade-in terms for people who have bought their previous car from the same dealer.

16 Responses to “Pay More Attention to Loyal Customers!”

  1. Tom Morse February 5, 2015 at 12:16 pm #

    With more liberal return policies comes a greater threat of customers returning stolen or previously marked down merchandise. Liberal return policies should not imply that if a customer comes in with a product purchased at any time, he may return it for a full refund or exchange, no questions asked. Instead, there should be some limitations, as in after 30 days of purchase, store credit would be administered in place of a cash refund, all in order to protect the company.

  2. Lily Li February 5, 2015 at 5:04 pm #

    Showing appreciation for loyal customers will also deter them from being enticed to shop elsewhere when there are promotions, discounts, or more competitive prices. Offering new-customer promotions will often produce temporary results which means more effort and resources will be needed to bring them back.

  3. Raven Takach February 6, 2015 at 11:41 am #

    I completely agree with the notion that keeping repeated customers happy is just as, if not more, important than “wooing” new customers. As a sales associate of Express, we try to promote our Express Next cards: with every purchase, a customer gets points; when a certain amount of points is reached, that customer gets special discounts and rewards. Obviously the card can be purchased by customers new and old, but it only is effective for the shoppers who come to the store frequently. I think that kind of promotion and exclusiveness to loyal customers keeps them coming back, and I have noticed the good relationships we have with those customers we do recognize.

  4. Zan Sheikh February 8, 2015 at 6:45 pm #

    I work in a retail pharmacy and I find this information extremely useful. I feel that everyone is always so concerned with getting new customers to walk in but retaining your current customers is extremely important as well. I look forward to bringing up some of these points at work.

  5. run du February 8, 2015 at 8:00 pm #

    I think not any companies can have so stable loyal customers even like Apple and Jordan that have become spiritual symbols of people if they do not pay attention to their current customers. For some small businesses, there is no doubt that they should pay more attention on their current customers rather than new customers. The tips in this post are meaningful and useful. Following what the authors said, I think if a company has specific customer base, the company should cultivate the loyalty customer relationships based on the background of their customers. For example, a company sell healthcare products to elder people. There are a lot of elder people live alone, so that the company can send their young sales to visit these elder people by a fixed time or call them. Absolutely, these elder people need to talk with others and someone be a guest in their home. Therefore, the young sales can know the statement of their clients and sell right healthcare products. This kind of relationship can make these elder people be loyalty customers and make them feel comfortable when they buy products.

  6. Kevin Larrea February 8, 2015 at 8:34 pm #

    I totally agree with this article that loyal customers are the backbone of every business. They are the ones that consistently choose that one store over the others. They also market the business for free by recommending and talking good about it to co-wokers, friends, and family. I work at Applebees and keeping loyal customers is extremely hard with people having different tastes everyday. Deals such as 2 for 20 appeal to a practically everyone as who wouldnt want a good meal for cheap. Other deals like happy hour are catered more toward young adults. If businesses focus on keeping their loyal customers happy, they will indirectly see an increase in profit and more customers.

  7. kristinaweller February 8, 2015 at 9:35 pm #

    I used to work for a privately owned business and can agree that paying attention to loyal customers is just as important as targeting new ones. If you have a solid customer base, neglecting to satisfy their needs can and will result in them deciding to shop elsewhere, thus, hurting your business. There must be a healthy balance of attracting new customers, as well as rewarding and acknowledging loyal ones.

  8. Lindsay Levine February 9, 2015 at 6:30 pm #

    I agree with this article when they talk about loyal customers and maintaining a strong customer and employee relationship. When a store sends a customer an email or a phone call it shows that they value your business and to come back more by maintaining the relationship as well as giving discounts. My mom and I go to this jeweler every month because we have established a relationship over the years because he gives us discounts as well as has good customer service because over the years we have established a relationship with him and knows what we like and how to meet our needs. This is good because now we are loyal customers and we will always shop their because of the attention and great customer service he gives us.

  9. Adam Zuckerbrod February 10, 2015 at 12:39 pm #

    Maintaining loyal customers is essential to a solid customer base and in turn the success of a business. It is known as Good Will. Excellent customer relations creates a bond between buyer and seller and promotes brand loyalty. Creating positive experiences for a customer enables positive word of mouth to spread more quickly, and in turn, will actually bring about more customers. I had a positive experience with Nike when I was younger. When one of my pair of shoes was defective at an early stage they let me exchange my old pair for a new one free of charge. I have stayed loyal to Nike and refuse to buy any other sneaker brand. Additionally, I relate this story to others who have had less than par experiences with other shoe companies for similar reasons. My loyalty to Nike has kept me as a steadfast customer throughout the years, and has led to me purchasing many products.

  10. Anthony Macchiarulo February 12, 2015 at 9:14 am #

    I think that is is important to pay attention to loyal customers more than non loyal. The reason I say this is because If you pay attention and give incentives to loyal customers then they will come back more often and buy more products. On the other hand a customer that comes once and a while is not worth the satisfaction of giving to those customers. I also agree how it is more efficient to keep loyal customers coming back. Trying to lure in new customers can become expensive, with advertisements and other forms, keeping a loyal customer base is key.

  11. Carla February 12, 2015 at 2:51 pm #

    In my field of International Transportation I need to always stop by to see loyal customers, not only a phone call but face to face meetings.

    Many times the Transportation Managers are not hands on with the day to day activities, so I am also asking the Staff how my company is doing in terms of Customer Service and how we can improve our services.

    Making sure the Staff is happy is also part of paying attention to loyal customers because they can influence the decision to switch a provider.

    • julialentini February 12, 2015 at 4:58 pm #

      Having a loyal customer base is an important part of conducting a good business. Loyal customers should be rewarded because then they will go on and tell friends family, co workers etc. to go utilize this business. You also have to try and bring in new customers also. You can’t only focus on the loyal ones, you need to find the happy medium. But, as a customer I know that I am loyal to a few stores and some incentives I get are like extra discounts or invited to special promotions. Having a solid loyal customer base and attracting new customers is important to onesbusiness.

  12. Henan Hou (Hester) April 12, 2015 at 2:33 pm #

    Loyal customers are the foundation to establish brand image. And customers will get self-valued if corporations continuously show their gratitude for their businesses. The most effective way to advertise those products or services is not advertisement but words of mouths from current customers. And potential customers tend to trust their friends who are loyal customers.


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