How prioritising loyalty over trial can boost your profitability tenfold!

In this week’s newsletter, we’ll look at how to turn your customers into loyal brand ambassadors.

Because, by focusing on customer loyalty instead of the exhausting chase for new clients, you can boost your brand value tenfold.

Sounds pretty good, right?

Then let’s dive in…

The leaky bucket

Have you ever heard of the concept of the leaky bucket?

The idea was introduced by Byron Sharp in How Brands Grow and became the immediate gospel for marketers.

The concept conveys that, just like a leaky bucket, your brand is constantly losing customers. And so, if you want to grow, you should focus on filling that bucket with more and more new customers.

You measure those metrics as:

More followers.

More impressions.

More buzz, more hype, more promotion…

Or, in other words, you constantly focus on the top of the funnel, getting more people into the bucket and hoping they won't "leak" out.

For commodity brands that position themselves on price, the idea makes sense: more promotions will lead to higher sales, less promotions to lower sales. The maths is simple.

Loyalty trumps trial

But for any brand that has a purpose and positioning beyond price (hopefully all of you reading this!), the idea of the leaky bucket is utterly misleading.

And the reason is acquiring new customers costs 5 to 10 times more than selling to a current customer!

The economic value of loyalty is therefore clear: it is far more profitable to retain customers than to acquire new ones.

And cherry on top, current customers spend 67% more on average than those who are new to your business, according to?BIA Advisory Services.

So here’s a novel idea: what if you fixed those leaky holes instead?

I can hear your mind whirring.

How do I do that?

Well, my friend, this is the magic of customer loyalty.

How to build customer loyalty

A surprising fact: your customers are also human beings - we sometimes forget this fundamental truth!

And human beings thrive on relationships built on trust, love and belonging.

So the secret to building customer loyalty is to build a meaningful relationship with your customers.

Just like in any relationship, it requires a few simple steps to build trust:

·????? Tell the truth – always

·????? Share your story – candidly and openly

·????? Show up consistenly – and keep your promises

·????? Delight your customers - as often as you can

·????? Show them you care – about them, about your employees, about the planet

It really is that simple.

But somehow, when it comes to brands, it seems easy to lose our way.

We stretch a claim to make it sound more sexy.

We omit to mention our sustainability challenges (or any other challenge for that matter).

We run out of energy or money and stop posting or advertising for a few weeks.

And most of all, we forget to be humble. We focus all our attention on how amazing the brand is and forget those who are actually buying it!

From clients to brand ambassadors

So here are some easy ways to think about nurturing your existing clients and turn them into your most valuable brand ambassadors.

1.??????? Make it personal

Personalised messages make customers feel valued. You may even consider handwritten notes or calls to your most valuable clients. According to research, simply adding personalisation to email subject lines can increase open rates by 26%.

Beauty brands such as Whind or online retail brand Nuvola both add personal handwritten notes to the packages they send out, whilst bigger brands use CRM systems to personalise messaging and make it relevant and valuable.

2.??????? Cultivate a sense of community

Your role as a brand is to bring people who have shared values and beliefs together and to create a sense of community. There are myriad ways to do this, from a simple newsletter, to online groups on social media, to full-out communities that come together at curated events.

Patagonia and Lego are great examples of brands that have created a strong sense of community by bringing people with shared values and interests together. They both offer online platforms and live events to foster this sense of community.

3.??????? Create superior value

Show your customers how much you value their loyalty. Think beyond the standard loyalty discounts to new ways of adding value and rewarding your loyal customers to build long-term relationships. Find out what’s important to them and make it a priority to offer that.

When I was working on haircare brand Sebastian Professional, we understood what motivated our creative stylists was being recognised for their craft. We therefore offered opportunities for them to publish their work, curate ideas for the brand and to be on stage at events.?

4.??????? Make your clients the heroes of the story

Make it easy for your clients to talk about your brand, share it with a friend and show them how they can contribute to your brand’s purpose. Helping your customers to make a difference in the world will guarantee a much more meaningful relationship that is sure to stand the test of time. You can discover the 4 ways and examples on how to do this is my previous article here .

The Recap?

To build meaningful connections as the foundation for your brand’s future, focus on the clients who love you, nurture them and make them your biggest brand ambassadors! Loyal customers not only tend to spend more, but they can market your brand for you. Brands with a purpose should therefore focus on building customer loyalty over customer acquisition.

To build loyalty, focus on creating meaningful relationships with your customers by:

1.??????? Making it personal

2.??????? Cultivating a sense of community

3.??????? Creating superior value

4.??????? Making your clients the heroes of the brand story

If you need any help creating a brand positioning which drives customer loyalty contact me to get on the waitlist for the “Build Your Purpose-Led Brand” program or email for personalised support: [email protected]

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