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The Importance of Customer Longevity & Loyalty


Written by

Danielle Strouther



The Importance of Customer Longevity & Loyalty

We’re so focused on getting as many customers as possible through the door that we often neglect something important: customer longevity.

This is how long a customer stays with your company. Generally, the longer they stay with you, the more they’ll buy from you. That’s loyalty right there.

But customer longevity is about more than just increasing your sales. It also increases your ROI (Return On Investment) and gives you better overall profits.

In fact, just a 5% increase in customer retention can bring a 25%-95% increase in profits.

That’s an incredible amount. Just think about it – even the slightest increase will improve your profits by a minimum of 25%.

This alone shows why your business should be paying attention to customer longevity. But it’s also important to understand customer longevity ≠ customer loyalty.

There’s a lot of choices out there for consumers and it’s getting easier to switch. Longevity equates to staying with a business without a clear alternative or reason to change. Loyal customers stay through thick and thin. It’d be risky to hedge your bets on solely long-standing customers but you might not get the constructive feedback to improve with loyal customers either.

It’s all about balance. To illustrate that further, here are the top three reasons why customer longevity will grow your business and improve your profits.

The importance of building a customer base

For any thriving business, a solid customer base is important. But many companies can take theirs for granted. They do this by chasing new customers rather than prioritising their existing ones and that can reduce customer retention.

It boils down to customer retention vs. customer acquisition and the marketing stats are quite telling:

Here are some reasons why bolstering your client base is so crucial.

Repeat custom through active engagement

No matter how small your customer base is, you should always show you care for the ones who are loyal to your brand. Amazon, for example, often send emails if you leave items in your shopping cart to let you know they’re there or if there are any discounts.

They give recommendations based on browsed and previous purchases. This gives the impression they want your repeat custom and these little moments can make a big difference.

A loyal customer base will help spread your brand like wildfire through word-of-mouth (online and offline).

Mutual loyalty is contagious

It’s impossible to make everybody happy. You’re going to lose some customers at some stage. So it’s about managing expectations, and complaints handling where necessary. Those are important moments in the journey to customer retention, showing you’re loyal to them and, in turn, they can be loyal to you. Nobody wants to leave if they don’t have to so don’t give them a reason to shop elsewhere.

Customers are the best brand ambassadors you could ask for.

Customer feedback

Pay attention to customer data. If something isn’t selling or people seem to leave the funnel at the same place, find out why and make the fix. You can find this out based on their behaviours in Google Analytics metrics or from basic customer feedback.

All this information can help you adjust your direction and focus on what really matters to your customers. And let them know criticism is welcome.

Don’t be that manager who takes to a review site to tell an unhappy customer they were wrong. It never ends well.

Stand above your competitors

Chances are, you’ll have competition in your niche and you won’t be #1 for everything. But you have your customers. And by focussing your efforts on them a bit more, it’ll help bring in new ones who will see what loyalty has done for their peers.

In the US, American Express found 33% of customers would think of switching companies after a single example of poor customer service. Some customers are like that. But you don’t want repeat occurrences of bad service, you want repeat custom.

Why you should care about customer loyalty and longevity

Once you have that solid customer base, you’ve got to think about how to keep them. Here are some more reasons how to do that.

It Increases Your ROI

Focusing on customer longevity means selling your products and services to them.

Unlike new sales, these customers are already in your system.

That means you don’t need to spend money making them aware of your brand and services, building trust and converting them into customers.

They’re already there. They know your brand and they’re happy with your products. All you have to do is get them to purchase again.

What’s more, if they’re already happy with your brand, it will also be a lot easier to sell to them again. In fact, you have a 60-70% probability of selling to an existing customer compared to 5-30% for a new customer.

So, you’re making new sales while saving money – improving your ROI drastically.

You’ll Increase The Value Of Your Orders

Loyal customers aren’t just easier to sell to.

It’s also easier to increase the value of your customers and upsell them with newer or more expensive products.

For example, repeat customers are 50% more likely to buy new products and spend 33% more than new customers.

This is because they already have trust in your brand. They’ve had good experiences and know that your product works – so they generally don’t mind paying a little bit more for the same high-quality they already use.

So, they’ll spend more money with your company, which means better profits for you.

Image that shows tree's growing to show how much customers mean.

You’ll Increase Customer Lifetime Value

Lifetime value is fundamentally how much a customer will spend with you over their lifetime.

Generally, the better customer loyalty you have, the better their lifetime value will be.

Let’s say, on average, it costs about £50 to acquire a new customer.

If your customer just buys one £150 product and then leaves, you’re making a profit of £100.

On the other hand, you’ve got a repeat customer who spends £1000 with your company over the years. That gives your business a profit of £950 and shows a much better lifetime value than new customers.

Knowing, and increasing your lifetime value doesn’t just improve your profits. It also helps inform your marketing and advertising when getting new customers.

If your average customer lifetime value is £500 – how much are you willing to spend to acquire them? If your current budget can be increased, you’ll be more likely to get more, high-value clients through the door and watch your profits soar.

shows a seesaw that shows which is more important

You’ll Naturally Get More Customers

Happy, long-lasting customers are more likely to tell others about your business.

It’s not just a the odd few either. 60% of customers will tell friends and family about a brand if they feel loyalty to them.

Customer referrals can be a powerful thing for your business. In fact, 92% of people trust recommendations from family and friends more than other forms of marketing.

For some industries, referrals are key. For B2B businesses, 84% of decision-makers start their buying processes with a referral.

Once referred, people are 4x more likely to buy from your business.

This not only increases your sales but also widens your customer base without any extra expense to your marketing.

Top Tips To Increase Longevity

Increasing your customer longevity is fantastic for boosting your sales, increasing the lifetime value of your customer, getting more customer referrals and improving your ROI.

It really is a win-win situation.

There are many different things you can do to increase your customer longevity.

One of the core factors is to ensure that you’re always providing positive customer experiences and responding to your customers.

It’s a simple concept.

If they have a good experience, they’re more likely to stick to your brand. If they’ve had a bad one, they’ll go elsewhere.

You can also introduce schemes that reward their loyalty. This can include points systems that reward them the more they purchase with you – or special discounts or offers if they order through your company again.

You can also increase customer longevity through referral schemes. This scheme works in two ways for your business.

Firstly, you’re getting new customers and sales through your door with increased referrals.

Secondly, you’re increasing customer longevity by rewarding existing ones for their loyalty – giving them an incentive to carry on being a customer of yours.

Dropbox is still one of the best examples of the power of referral schemes. Back in 2008, they started offering free storage to anyone that referred new users to the company. This resulted in the business growing 3900% to 4 million registered users in just 15 months.

That’s an incredible amount of growth and something your business could benefit from investing in.

This is a image that shows loyalty earns rewards

Increase Your Profits With Better Customer Longevity

Your business will never stop still.

You’re never going to reach a certain amount of customers and think “that’s enough now! Let’s stop here!”.

You’re always going to widen your customer base and bring more people in.

But, by focusing on customer longevity – you’ll increase the lifetime value of your customers and be able to watch your profits soar.

The better your longevity, the more you can invest in acquiring new customers and the more likely they’ll become loyal customers.

And so the same cycle will start again, allowing your business to grow.

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