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The Science of Customer Loyalty

THE SCIENCE OF CUSTOMER LOYALTY WHY IS CUSTOMER LOYALTY So IMPORTANT? Loyal customers are usually a brand's most valuable asset, so it's important to focus on keeping them that way. THE FACTS +500% 16x +125% It costs 500% more to acquire new customers than it does to keep The cost of bringing a new customer up to the same level of Lowering your customer churn rate by 5% can increase your profitability by 25-125%. profitability as an old one is up to 16* more. current ones. 10x 1%= 40% On average, loyal customers are worth up to 10x as much as their 1% of a retail website's users generate as much as 40% of its revenue. first purchase. WHAT BRAND ADVOCATES SAY... 93% 84% 84% of brand advocates say they receive questions that shoppers would never consider asking a live sales associate. 93% of brand advocates believe they are a better marketing asset for brands than sales associates. SCIENTIFICALLY FOUNDED WAYS To IMPROVE CUSTOMER LOYALTY When looking to improve customer loyalty, behavioural theories can provide the key. There's science behind the approaches that get the best results, so incorporate some of these into your marketing strategy for a loyalty boost: МЕТНOD 1: DELIVER UNEXPECTED REWARDS THE SCIENCE Unexpected rewards produce a huge rush of dopamine in the brain, something that doesn't occur when we know a reward is on its way. WHY IT WORKS: Dopamine is a feel-good hormone, which is also responsible for habit forming behaviour. If your brand is responsible for dopamine production, customers will want more of that feeling and will therefore will want to keep coming back. How To The key is to ensure rewards are not predictable. Mix things up and try not to stick to patterns. Reward customers when they least expect it and you could reap the biggest rewards. METHOD 2: START & END STRONG THE SCIENCE The primacy & recency effect is a cognitive bias, our brains tend to focus on the first and last aspects of something rather than the middle. WHY IT WORKS: As the memory will focus on these aspects, making sure they are positive and strong will leave customers with a much better overall experience. How To Concentrate on the start and the end of any interaction with your brand, whether it's an email, phone call, social media interaction or face to face. Always start and end in the best possible way. METHOD 3: CREATE A SOCIAL IDENTITY THE SCIENCE Social identity theory shows us that when people feel part of an established in-group, they are more likely to stay loyal to that group. WHY IT WORKS: Shared traits are an important part of the way people define themselves, so if it's a part of their identity, they're less likely to leave the group behind. How To Help to foster this shared bond between customers, by giving them ways to get to know each other. Groups, events and forums can be helpful. Creating a common name or club can help create the sense of belonging, and distinguishing from the competition is also helpful. METHOD 4: LET CUSTOMERS SHARE REWARDS THE SCIENCE Customers may feel 'cognitive dissonance' when they make a purchase, due to inconsistency between their views on the world & their own personal feelings & actions. WHY IT WORKS: People are frequently motivated to do something because they feel good helping others, or they would like others to have a positive impression of them. Sharing rewards with another helps to relieve cognitive dissonance, allowing them to feel good about a purchase because someone else will benefit too. How To Instead of only offering a reward to your customer for a particular action, allow them to nominate a friend to share their rewards with. МЕТНOD 5: SHOW CUSTOMERS YOU SHARE THEIR VALUES THE SCIENCE Studies show that consumers state shared values as a reason behind their relationship with particular brands. WHY IT WORKS: Values are inherently important to people, more so than interests. When others honour the values that make you tick, you feel good and react positively towards them. How To Ensure brand beliefs and efforts at giving back are communicated to customers as well as employees. Show consumers the values you hold dear via social media or email campaigns. BUILDING LOYALTY WITH RESPONSIVE, EFFECTIVE CUSTOMER SERVICE 79% of customers would take their business to a competitor within a week of experiencing poor customer service. 79% This means offering. A variety of communication Quick response times. methods. And fast query resolution is key to building a loyal customer base. Specifically. TELEPHONE 50% of consumers expect a call to be answered within 5 minutes. EMAIL 35% expect a response to email within 24 hours. 15% expect a response to email within 2 hours. SOCIAL MEDIA The majority of consumers expect a response via social media within 1 hour, (although 18% are happy to wait up to 24 hours). INSTANT MESSAGING When contacting a company using an instant messaging service, 19% of consumers expect a response within a minute. CUSTOMERS ALSO VALUE... Being given the opportunity to feedback to the business on the Companies who provide Dealing with agents who have full details of the information that customers are looking for before they've customer's previous communication with the company. service they received. asked for it. WHAT ABOUT NEGATIVE EXPERIENCES? Most negative experiences can be turned into a positive - with something as simple as a phone call. 30.9% 18.7% 30.9% of consumers would be 18.7% would be more likely to more likely to be loyal to a business that followed up on recommend a business that followed up on negative negative feedback. feedback. Sources: magnetic north. info.magneticnorth.com blog.accessdevelopment.com www.socialannex.com www.spredfast.com magneticnorth.com

The Science of Customer Loyalty

shared by RFox91 on May 13
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Securing a new customer is a reason to celebrate, but research estimates that it costs around five times more to acquire a new customer than to keep one. Want to future proof your company? Try taking ...

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