5 Key Ways To Improve Customer Loyalty

5 Key Ways To Improve Customer Loyalty

Getting new customers is difficult, time-consuming, and expensive. In fact, it is 5 times more expensive than nurturing existing customers. So why not put more energy into keeping the customers you already have? You know them already. You know what they want. You know what they expect of you.

Or do you?

Your company is facing fierce competitors who build vibrant customer communities and who aggressively compete on price. Which means that you too must invest substantial energy and effort into maintaining your customer base. Providing a great product or service is crucial. But it is rarely enough by itself to keep your customers coming back for more. It’s the authenticity of your customer interactions that matter most, not the frequency. 

You need to create genuine customer loyalty.

You want loyal customers. But how can you measure loyalty? Loyal customers are much more likely to make a repeat purchase. In more concrete terms, loyalty can be measured by looking at your customer retention rate. According to research by Bain & Company, increasing customer retention rates by 5% increases profits by 25% to 95%.

It is tempting to concentrate on making new sales or pursuing bigger accounts. But paying attention to your existing customers, no matter how small they may be, is essential to maintain a thriving business. That being said, In order to reach the fabled exponential growth that all SMEs strive to reach, you must succeed in both maintaining existing customer relationships and creating new ones.

The secret to securing repeat business is to follow up in a way that has a positive effect on the customer. Effective follow-up begins right after the sale. Get in touch with customers to say thank you and again to find out whether they are pleased with your product or service. Everything begins with customer feedback. When problems arise, fix them – and then identify the root cause to make sure they never happen again.

But it doesn’t end there. You also have several other effective methods of engaging your customers.

1. Let Customers Know What You Are Doing For Them

This can take the form of a newsletter mailed to your customers, or it can be more informal, like a phone call. Whatever method you use, the key is to dramatically point out to customers what excellent services you are giving them.

If you never let customers know all the things you’re doing for them, they may not notice. So make a phone call to let them know they don’t have to worry about a given chore because you have already taken care of it—completed the paperwork, called the attorney, or double-checked the shipment. One less thing they have to worry about. While you are letting them know about what you are doing for them, this is a perfect opportunity to ask for feedback. What are you doing right? What can be improved? Etc.

What you’re doing here is closing the feedback loop. When you’ve gotten your customer’s feedback, it’s then important to let them know what you are going to do with that feedback. Does the paperwork have an error? We will make changes to our review process. The shipment was delayed? Let’s look into our shipping provider and check alternatives.

2. Take The Time To Write Handwritten Notes To Your Long-Time Customers. And Do It Often.

“I was just sitting down at my desk when your name popped into my head. Are you still having a great time flying all over the country? Let me know if you need another set of luggage. I can stop by with our latest models any time.”

Have you run into an old customer at an event? Follow up with a personal note: ”Great seeing you at the CDC Christmas party. It’s been a while. How about we do lunch soon? I’ll give you a call early in the new year to schedule something.”

In a world where digital communication dominates our personal and professional interactions. There’s something special about a handwritten note. When done correctly (with the right tone to the right customer), it’s shocking in the best possible way. Handwritten notes create that “wow” factor that can turn a neutral customer into a promoter. Or turn a disloyal customer into a loyal one.

3. Keep It Personal

Voicemail and email make it easy to communicate, and they’re important. But don’t treat these methods as the only legitimate way to follow up with your customers. You also want a more personal touch.

Don’t let the secretary barrier stop you. If you’re having trouble getting through, leave a voice-mail message saying that you want to talk to the person directly or that will stop by his or her office at a certain time.

When writing your handwritten thank-you notes, take that little extra bit of time to make it unique. Referencing a past conversation or asking how their family is doing.

Make sure everything is as personal as possible. That being said – it is very important to take the nature of your relationship and cultural norms into consideration! Asking about family may be acceptable for American customers but could be totally inappropriate for Japanese customers.

4. Remember Special Occasions.

Send regular customers birthday cards, anniversary cards, holiday cards or small Christmas gifts—you name it.

Gifts are a great way to follow up. Use your creativity to come up with interesting gift ideas that tie into your business, the customer’s business, or his recent purchase. A great idea is to send something that the customer can actually make use of. A branded necktie is not useful. A Moleskine notebook maybe. Use your imagination, but you don’t need to break the bank.

You don’t have to spend a fortune to show you care. And you’ll be amazed by the effect that this simple and thoughtful gesture has on your customers.

5. Pass On Information

If you read an article or hear about a book or organization that a customer may be interested in, drop them a note. Do not spam them with emails. Make your own judgment call on what you deem to be useful information to them.

Of course, you should also share any of your own materials that a customer may find useful. But don’t hesitate to point them to other resources as well. Your customer will appreciate it, and appreciation begets loyalty.

Linking NPS to financial performance

Linking NPS to financial performance

Trying to find the ROI behind customer experience investments might be a tricky time to time. Here is one approach that is based on vast studies about companies that excel in listening to their customers and taking that information back to their business to improve it.


Let’s start by analyzing the difference in value between your detractors and promoters. Here, NPS typically has a very high correlation with retention: the happier the customer, the more loyal they are and therefore the more revenue they generate for you during their customer lifetime.

You should look at your customer’s behavior in history. Of the promoters, which you had 1 year ago, how many of them have stayed? How many have left? Most likely these numbers are very different for the detractors.
When you have, based on the historical data, established a clear link between your customer experience metric and churn rate, you can immediately start to understand how big of a financial impact your X-point NPS increase has. A study done in London School of Economics in 2005 found that 7 point NPS increase led to an average 1% revenue increase.

But you shouldn’t assume industry averages apply to you directly.

There are huge industry-specific differences – in competitive industries, customer experience differences easily lead to a situation, where your customer decides to switch vendors. In industries, where consumers have very limited choice, they can stay as your customer for a long time even if they hate you. In B2B the user and buyer can be different persons and the decision-making dynamics therefore complex. Therefore, I warmly recommend knowing your own numbers.


Keep in mind that there are also other ways the customer experience improvement impacts your bottom line. Higher NPS typically correlates with higher advocacy, which brings you more customers and revenue. Your most loyal customers also typically buy more from you. You have a chance to up-sell and again increase your revenue.


The benefit can result from the cost savings as well. The higher your NPS, the smaller the number of customer complaints and returns. This can make you save in customer support and repair costs.


To summarize, there are some standard ways through which NPS improvement (or customer satisfaction increase) translates to financial value. You should quantify at least some of these for your company. Once you have done that, you have a good understanding of what is the financial value of one-point NPS increase – that makes it easy to assess, whether a particular action targeted to drive the NPS up, makes sense or not.

As conclusion, we could say that this model will give you a head start on how to see the financial benefits around NPS. Again not a comprehensive model but will help you out!

CXforum is born!

CXforum is born!

We believe that everyone deserves to be happy and get better quality experiences every day.

That is the reason why we created a center of excellence and global knowledge base around “The entire journey” which basically means that we had to create the largest global community of Customer experience and Employee experience professionals that helps each other to excel in creating the happiest customers and employees in the world.

Technology has changed the world so that 89% of companies compete purely on CX basis and what we noticed is that only 10% of companies invest enough in their customer experiences. 

This said, companies are not able to rely on sololy in investing high technology, even though that remains to be important, the only way to survive is to create exceptional experiences day after day. And who create those experiences? Well, your employees of course. This is another reason why we think that we need to concentrate on discussing and educating ourselves about the entire journey and not just one touchpoint.

Even though CX has taken its place in the professional community of marketers it still remains a very uneducated field of marketing. Very few universities adequately teach about customer experience, employee experience, customer journeys, and above all how to drive business benefit from them and create happier customers.

There is a lot of talks but few deeds – and this is where CXforum comes in. Our goal is to really revolutionize the world of marketing and CX.

At the moment we are building killer content for every CX professional (obviously) but also above that an educational system with certifications to really make sure we can create great CX professionals for companies. We also create CX professional directories for companies to find CX professionals easily. This is topped with the worlds biggest CX events ever made – so that you can have access to the best information out there.

CXforum is an independent network of Customer Experience and employee Experience professionals, companies, and people to bring knowledge and methods together to create better experience unconditionally.

The idea of CXforum was created during one single night when I happened to meet one single-minded CX professional from Melbourne. After a long night of chat, during the first hours of the morning, CXforum was set up and good to go!

Jaakko, Co-Founder of CXforum