According to studies, the alternative of acquiring new customers still costs you five to seven times more than retaining existing ones. But customers today are fickle, instantly aware of every new alternative due to the Internet and social media, and not afraid to change.
Yet, as a business advisor, every entrepreneur I meet assumes that they are destined to become the next killer brand in their space, like Tesla is to all-electric vehicles, and Apple is to smart phones.
They don't realize how much it costs in time and money to get there, and how few large consumer product companies around the world have ever made it.
Despite the challenges, I encourage every business to really focus on achieving an exceptional brand image, because the payback is huge. In my experience, your first step should be to look beyond traditional marketing practices, per the following strategies:
Today's customers demand to be more than satisfied with your price to be loyal. They need to remember their "total experience" as one that stands out-- starting with how easy it was to find you, simplicity of the transaction, and superior service. They want to be your real advocate to others.
At a Ritz-Carlton, for example, employees are authorized to spend up to $2,000 per guest to solve a guest issue or improve a guest's stay. Believe me, if I experienced that kind of memorable attention at a hotel, both loyalty and advocacy would be easy to understand.
All the marketing and pricing in the world won't make your brand memorable if your employees don't live and communicate that feeling. You need to build and reward a highly motivated and engaged front line. They are your greatest resource for generating brand loyalty in your customers.
As an example, TOMS shoes donates a pair for every one sold, and maintains employee passion and loyalty by giving their most effective employees international trips to assist non-profit partners in distributing shoes in interesting places like Nepal and Honduras.
Focus on innovation in the design of your delivery and service, as well as your product. Visual appearance and taste still matter, whether it be food, clothing, or facilities. Make your customers pleased and excited when they think about your brand, and they will return often, bringing friends.
Smart marketers call this the "five senses" strategy for improving customer experience and loyalty. Find ways to let your customer touch, hear, see, smell and even taste your product, even if only virtually, by analogy, or by providing snacks or rewards.
Even digital and virtual interactions can feel like real relationships, if customers hear names, commitments, and follow-up, rather than rules and requirements. Be responsive on social media, as well as every physical interaction, so that every customer feels a special sensitivity and connection.
Businesses as potentially mundane as Apple Stores demonstrate the importance of a modern airy design, coupled with well-dressed and friendly salespeople who approach you with warm personalized welcome, and really listen to you without a sales pitch.
Certainly you need to listen to customer feedback, and fix existing problems, but the real challenge is to excite customer imaginations with products and services that they could not envision. Truly loyal customers are ones who trust you to lead them, rather than them having lead you.
Very few customers are likely to envision a new concept, such as combining a computer with your watch. You have to excite their imagination, and entice them through clear customer value. They will reward you with brand loyalty and line up for the next step.
Not every change you make is worthy of hype in your marketing. Customers become bored or immune to constant harping on your latest incremental change, special sales, and internal changes. Your challenge is to create special events and exciting changes that lead to customer loyalty.