The Importance of Customer Loyalty for Online Businesses

DISCLOSURE: This blog post may contain affiliate links and any purchase(s) made through such links will result in a small commission to HUSTLR (at no cost for you).

Table of Contents

Regardless of the type of business you own, you need to understand the power of customer loyalty. Your company’s continued survival depends on it.

Let’s get one thing clear:

The average cost of acquiring a new customer for online businesses is getting more expensive. Of course, the actual cost depends on your industry. However, cross-industry customer acquisition costs track the cost growth rate in key industries.

For instance, according to Entrepreneur magazine, in the travel industry, it costs a company like Priceline $7 to acquire a new customer while telecoms players like Sprint spend $315 on average to get a new customer.

And don’t think for a second that online marketing is going to reduce your acquisition cost for each new customer. It costs more and more money to advertise online.

PPC platform Wordstream reports that on Facebook, the average cost advertisers have to pay for each click coming from a US-based visitor is a whopping $1.72. Since it takes quite a number of clicks to convert visits to sales, it shouldn’t be a surprise if it costs the average online business $172 to generate a single sale or so-assuming your site visitors typically convert at the very conservative rate of 1%.

Given the realities above, it is CRUCIAL for online businesses to focus on customer loyalty. By getting your customers’ key reasons to come back again and again, you save a tremendous amount of money on new customer acquisition.

In fact, your customers might even become your greatest online evangelists and brand ambassadors. Best of all, they spread the word about your business on social media, blogs, and online comments for absolutely free.

Let’s run through the factors on why customer loyalty is important for your business :-

1. Your company remains relevant with your customers

When you develop a loyal community around your brand, you stay top of mind with your buyer base the next time they need your products or services.

They are also more likely to recommend your business to people in their social and professional networks should those people need the kind of merchandise or services you offer. You end up creating a self-sustaining ecosystem of business boosters.

2. Repeat business

Since your business remains top of mind with your loyal customer base, this translates to more repeat business. Your loyal fans seek you out first because they are already familiar with the kind of quality your business brings to the table. They don’t want to take a risk with a competitor.

How come? It all boils down to the fact that most people are creatures of habit. Once you convince them that your business is their best option and you satisfy them, they are less likely to switch providers. In their minds, it’s simply too risky to try and find another source or service provider. They’d rather stick to something they see as tried and proven.

3. Your company doesn’t have to compete based on price

Brand loyal customers are also less likely to be swayed by competing brands’ lower prices, new product offerings, or special promotions. In short, when your customers become loyal to your brand, you don’t have to engage in potentially financially fatal price wars. You just need to do a decent job in meeting the value proposition of your competitors for your existing customers to see no reason to do business with your competitors.

4. Loyal customers are more likely to give you feedback

Truly loyal customers are your best source of customer intelligence hands down! Since they have some sort of emotional investment in your brand, you can bet that they can give you feedback that can help you produce better products, offer superior products, or run more effective campaigns.

Indeed, using Facebook’s Lookalike Audience profiling system, you can ask your most loyal and active brand fans profiling questions. Plug these into Facebook’s Custom Audience system to target people who have a similar profile. While not guaranteed, profile-targeted marketing can help ensure that your marketing materials get in front of the eyeballs of people who are also likely to become loyal customers.

5. Loyal customers are more likely to share your marketing content

If you develop a solid mailing list that sends out truly effective ‘engagement’ content that educates your list members, your brand fans may be more likely to share this content. If they feel they get quite a bit of value from your content, don’t be surprised if they share your content all over the place. Here are just some ways a loyal customer base can spread the word about your brand:

• Facebook wall shares:
They post your email update’s content or blog link on their personal walls

• Facebook group post:
They might copy and paste your link in a reply comment or in the main post in a Facebook group they’re a member of

• Pinterest pins:
They might share some of your online catalogue’s high-quality photos on Pinterest and link it to your email update’s blog post

• Tweet about your brand:
They might tweet about their experiences with your brand by describing their latest purchase

• Post photos on Instagram:
They might post pictures of your products on Instagram with brand-specific tags

• Paste your content or link in a forum:
There are many niche-specific forums all over the Internet. Whether through a discussion thread or a reply in a thread, your brand fans can paste your content and mention your brand name or even post your link

Any of the activities above can make your brand gain even more visibility on the Internet. Even if your brand fans don’t post your company’s links all over the place, the mere mention of your company name or custom branded products is often enough to boost your site’s rankings for your keyword targets at search engines.

That’s right-thanks to the word of mouth organic marketing customer loyalty makes possible your site stands to enjoy both direct traffic and indirect search engine traffic.

6. Building up customer loyalty does not have to be impossible or expensive

What’s the best part of all of this? Building customer loyalty is not as hard as you think. Just as important, establishing and maintaining customer brand loyalty doesn’t have to cost you extra. Keep the following key pieces of advice as you come up with a loyalty-building framework for your online business.

The best part? It doesn’t matter if you are a tiny startup with absolutely no budget or you work for a large fast rising successful enterprise with a marketing budget of six to seven figures, these tips can help you formulate a winning set of customer loyalty strategies.

7. Knock the ball out of the park

Please understand that every sale you make to a new customer is a tryout. They are testing your business’:

• Commitment to quality
• Commitment to customer service
• Accessibility and ease of transactions
• Overall value

Think of each new customer sale as a ‘job interview’ for your company.

Just as you want to WOW your interviewers, you want to deliver that WOW FACTOR to your new customers. Granted, you can’t always deliver the lowest price. The good news is you don’t necessarily have to be the cheapest option to provide the BEST VALUE option to your customers. Compensate for your higher price with better customer support and after-sales support. You can also compensate with faster shipping or other features.

Regardless of how you do it, just do it! Under promise and over deliver. Get your customer to say WOW, your company is different.

8. Keep in long-term contact with your customers with a mailing list

I know, I know. You probably have heard the phrase “the money is in the list” so many times on affiliate marketing and online marketing forums, FB groups, and blog posts that you’re sick of it. Well, there’s one simple reason why you keep hearing this phrase: it works!

When someone enters their email address into your email collection form or squeeze page, they are giving you legal permission to talk to them. They are signaling to you that whatever it is you are offering is interesting or even valuable enough to them for them to want to stay in touch.

Whether you offered premium information or a free piece of software or an ebook to entice people who’ve visited your site to get on your list, they are giving you permission to contact them when you have an update. Compare this to a typical situation of people finding a site through search engines, checking out its pages, then leaving. Most will be gone for good never to return.

Every time you send an update to your mailing list, a certain percentage of your list members will go back to your site. Think about that for a second: you effectively RESURRECTED otherwise dead traffic! Remember, the vast majority of people who visit sites don’t come back. Thanks to your mailing list, you get to bring a sizable chunk of those visitors back to your site.

How does a mailing list build customer loyalty?

Through sheer familiarity, your brand gets to stay top of mind with your existing user base. When you get people on your list, you are visible to them. You are not an unknown quantity like your competitors. This sense of familiarity comes in handy when it comes time for you to run a special promo.

Please understand that you have to show your brand (and its content) to your prospects several times before they decide to get off the fence and buy from you. Called the “Rule of 7”, this phenomenon highlights the fact that people need to feel that they know you enough for them to be comfortable about doing business with your company.

Every time you send an update to your mailing list that lets your list members know what your company is up to, you remain relevant to your customers and they are again exposed to your brand, what you are about, what you offer, and what is different or distinctive about your brand.

Keep in mind that just because you put up a mailing list it doesn’t mean your customers will automatically become unshakably loyal to your brand. You have to run your mailing list the right way. Read the section below closely and very carefully

9. How to turbocharge your mailing list’s customer loyalty building effectiveness

• Send only highly relevant updates

All your email updates will take up your list members’ time. Don’t waste their time by making sure your updates are 100% related to the theme or purpose of your mailing list. Don’t give them the impression they are wasting their time reading your email updates. Example: if you are a baby shoe online retailer/dropshipper, make sure to send out email updates that link out to content that is solely about baby shoes or a topic that is closely related to baby shoes.

• Send out updates that match your list members’ expectations
There are 3 main reasons people join mailing lists: discounts, promo codes, and the latest news about your company. Every update you send must have something to do with the above. Otherwise, people on your list won’t develop brand loyalty. They would begin to feel that you are just wasting their time because you keep sending ‘off topic’ emails.

• Send out updates that REWARD your list members for staying on your list
Make it clear to people on your list that they are getting something your other site visitors aren’t getting. How? Offer EXCLUSIVE promo codes or special discounts which are available only to people who are members of your list. Make it clear to your recipients that they are getting a promo code that rewards them for their list membership.

• Send out exclusive promo codes and discounts that are WORTH IT
If you’re going to just give your list members a slightly better discount than regular visitors to your site, they might not think of joining your list or being loyal to your business is worth it. Why? You’re not giving them a clear and solid reason to be LOYAL to you.

• Poll your list members and mention them in your updates
People like to feel that they matter. They want to feel that their feedback matters to you. Nobody wants to be made to feel that they are just another face in the crowd. Use this fact to build loyalty to your brand.

When you conduct a poll or ask list members to email you back, actually pay attention to the results or feedback. Acknowledge the members who took the trouble of actually sending feedback.

Believe it or not, even the list members who didn’t send in feedback will be impressed by your company if you acknowledged other customers. This simple gesture brings home the message loud and clear: you actually take your customer base seriously! They aren’t just sales figures or random traffic statistics to you.

• Send content that clearly ‘explains’ the superiority of your offerings
Educate your list members about the value of the stuff you’re selling or the services you offer. Don’t automatically assume that just because they joined your list that they ‘already know’ your brand’s value.

Use your list to continuously educate your list members about what makes your offerings better. Please note: don’t compare your offerings to the competition! Instead, show how your offerings solve the key problems your list members have.

• Always remember that pictures are worth a thousand words
Educate your customer base through blog posts on your site. Don’t just bombard them with text in your newsletter’s email update. Instead, call them to action to click through to your blog post.

Once they land on your blog, hit them hard with pictures. Leverage the full power of graphics to communicate the full value of the products or services you are offering. Pro tip: when offering services, use diagrams and infographics.

• Offer instructional videos
To take your brand to the next level, include video links in your updates. Use these videos to show your list members how much you care about them by answering key ‘after sales support’ questions.

When people buy a product from you, it’s only natural that they would want to know how to properly clean it, store it, or some other related task. Show them how its down through your video series.

Your branded video series (your company’s watermark is prominently displayed in every frame), brings home the point that even though the video is not pushing a product to the viewer that your company cares about its customers. This is a big deal because most companies bend over backwards to get customers. But once they get the sale, you don’t hear from them again.

• Send personalized updates from time to time
Have you been to a restaurant where the owner goes out of his/her way to say hello to you? Assuming you were impressed by the quality of that restaurant’s food, this little extra ‘personal touch’ is probably enough to make you want to keep going back to that restaurant. You are ‘somebody’ in that restaurant.

The same dynamic applies to mailing lists. When you reach out to list members and give them a personal greeting and ask them to reply, they feel they matter. Directly engage with them. Don’t freak out, only a tiny percentage of people would respond. The good news is if you engage with the ones that do, they can quickly turn into your brand’s most vocal evangelists.

Keep the tips above in mind if you want to formulate a customer loyalty-building system for your business. By making excellent customer experiences the cornerstone of your business, you make it easy on yourself when it comes to building user loyalty!

The Importance of Customer Loyalty for Online Businesses

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