How often does it happen that even though you get attractive deals and discounts from different brands, you still return to that one brand that you trust?
Brands are popping up everywhere like mushrooms, and the only way to stay ahead of the competition is by gaining users’ trust and ensuring that they keep returning to you for their needs. According to research, loyal users are 50% more likely to try a new product of your brand and spend 31% more than new customers.
And according to the Pareto principle, loyal customers constitute only 20% of any brand’s customer base but generate 80% of its revenue!
That is the power of Customer Loyalty!
Also, factor in the fact that acquiring new customers costs more than five times the cost of retaining existing ones, and you can see why having a customer loyalty program is a must for most brands.
But first, let’s define customer loyalty.
Customer Loyalty in 2023: What is it all about?
Customer loyalty is the willingness of customers to return to your business to make repeat purchases. Their willingness to shop more, pay more, and use more products. It’s about nurturing the relationship between the customer and the brand so that they trust the brand enough to purchase repeatedly.
Customer loyalty stems from an excellent brand relationship, delightful and remarkable brand and product experience, and the value the products add to the customers’ life.
One of the primary reasons to promote customer loyalty is that loyal customers help in increasing revenue and awareness more than your marketing and sales teams.
But there are many other reasons behind the importance of customer loyalty in 2023.
Let’s dive right into it.
Why is Customer Loyalty important in 2023?
1. Increase in customer trust.
Customer loyalty is akin to the bedrock of any business, with its foundations as strong as the trust users have in it.
Customer loyalty is based on the trust between a brand and its users. Due to this trust in the brand and its offerings, users choose to return to it frequently. The value users get out of this trusting relationship far outweighs any benefits they might get from a competitor.
Thus, brands must devise a strategy for customer loyalty in 2023 to foster their relationship with their users.
2. Loyal customers transform into brand advocates.
As we said earlier, acquiring new customers is much heavier on a brand’s purse than retaining existing ones. Loyal customers can be mobilized and activated to recruit new ones.
Marketers, salespeople, and customer success managers alike use this capability of loyal customers to transform them into brand evangelists. These customers participate in word-of-mouth marketing.
Data shows that over 90% of customers trust a brand a friend recommends, and approximately 84% of B2B buying stems from a referral.
Brand loyalty opens up invaluable marketing avenues for brands, like word-of-mouth, referral marketing, and social media. These are built on social proof and testimonials.
Also read: Top 3 gamification techniques to boost your loyalty program
3. Higher order value.
Customer loyalty in 2023 will directly reflect in customers’ share-of-wallet, i.e., the amount of money a customer is willing to spend on a business compared to its competitor. Higher customer loyalty translates to a higher order value and share-of-wallet.
Loyalty programs also boost profits, as more than 63% of users tend to maximize their spending on a brand to benefit from loyalty rewards. Brands also have a 60-70% chance of selling to loyal customers compared to a 5-20% chance of selling to a new one.
4. Better product reviews.
Before buying any item online, over 86% of customers check out its testimonials to ascertain how the product performs in real life and whether it is worth buying. People also check social media platforms to check video reviews and other people’s experiences using the product.
Positive reviews are a tried and tested marketing strategy for any business. Customer loyalty in 2023 will also contribute to this strategy, where loyal customers always return to give a positive star rating or detailed product review of a product they tried and loved.
Elated and loyal customers leave better reviews which help prospects in the research phase of their buying journey, and five-star reviews are a sure-shot way to get their attention.
Conclusion
Customer loyalty in 2023 will be directly tied to your business’s bottom line and will impact its retention and ability to grow quickly. It is much more than regular faces and people making repeat purchases but is about a trusting connection between users and the brand.
Brands must prioritize marketing strategies to foster this relationship and keep customer loyalty at the forefront to set themselves up for long-lasting success.
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