It is argued that by asking “How likely is it that you would recommend company X to a friend or colleague?”, an organisation is able to assess overall customer loyalty based on the customer’s intention to refer others. Although the question can give you an indication of loyalty during the customer journey it doesn’t actually give you any explanation of the root course or the cause of a low score. It only gives you a snippet of information even if you analysed the results against demographic details. For a brand/business, this is simply not enough.
In a nutshell, loyal customers mean they are more likely to:
- Interact positively with the brand on social networks including Twitter and Instagram
- Devote a high share of spending with the brand
- Promote the brand through word of mouth
- Provide constructive criticism where necessary to improve an aspect of the brand whether that is brand quality to customer service received.
All of these desired behaviours from the ‘loyal customer’ are expected to translate into consistent cash flows and increased revenue for the business. However, this requires formal customer experience programs that monitor performance and guide improvement efforts. Traditionalists would argue that it could be obtained through customer surveys that track measures such as satisfaction, repurchase intention and word-of-mouth intention.
However, I would like to recommend splitting customer loyalty into 3 areas:
- WHAT someone thinks about the brand
- HOW they purchase and communicate with the brand
- WHERE they purchase or provide feedback from
The below image shows you the overall snapshot of customer loyalty and how I personally think it could be. Having said that, I am not trying to say organisations have their customer loyalty programmes wrong, but many need ongoing refinements to keep up with consumer demands and the methods they communicate with others.
- Perks! Everyone like a reason to sign up or to purchase a product, whether that is points, discounts or free items for being a new customer. The could be the driver behind acquiring new customers.
- Re-inforcing – The perks and added-value propositions should not stop there. You want to treat your customers like they have only just signed up, to start a life-long customer relationship with them.
- If a customer is presented with opportunities to maximise their loyalty rewards and receives targeted communication via email, text or social media related to their individual needs, they are more likely to continue to support the company/brand. And this not only includes potentially spending more money on the brand but sharing their experiences through word of mouth.