Long-term Customer Loyalty Pays Off

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By Michael Alter

Have you ever wondered why almost every retailer has some variation of a customer loyalty program? The answer is rooted in countless research studies spanning decades that have proven time and again the value of keeping a client base loyal – loyal clients spend more and provide free word-of-mouth advertising. Research has shown clients will stay loyal to you and even pay more if you deliver great customer service. However, research has also shown clients can be fickle; give them one bad customer service experience, and there's a risk that 70 percent of them will stop doing business with you.

Customer service plays a huge role in client loyalty. The results from a 2012 customer satisfaction survey conducted by Oracle revealed why clients stay loyal versus why they move on to competitors. Surprisingly, 70 percent of the respondents indicated they would never again buy goods or services if they had a poor customer service experience, with 64 percent of respondents saying they would leave and take their business to competitors. The survey also revealed customer service is so important for clients that 81 percent indicated they were willing to pay more for a better customer experience. Keeping clients loyal long-term is going to require consistently excellent service.

Consider these tips and learn how to increase the likelihood of developing increased loyalty among your clients:

Give incredibly good customer service. Thoughtful, timely, and responsive customer service goes a long way. In a world filled with impersonal communication through e-mail and social sites like Twitter, conversing with clients versus forcing them through a phone system or voicemail matters greatly. 

Always over-deliver. At a bare minimum, meet the needs of your clients, then go the extra mile and deliver above and beyond their expectations. 

Do unto others. Clients long to be treated like human beings, not billable work. Lead by example. Teach your staff how to help and converse with clients in the way they would want to be helped. Communicate to your staff that you expect them to deliver a great client experience.

Be genuinely honest, transparent, and sincere. Clients appreciate honest communication. For example, if you believe something will not work well for them, say so and explain your reasoning. If you make an error, own up to it. If you're sincere and realistic, their trust in you will increase. They want to feel reassured that you're sincere, trusting you mean what you say.

Thank them; simple things matter. Doing something genuine like smiling when you greet a client or addressing the client in a personable way, such as "I really appreciate your time today Mr. Jones", goes a long way. Make it a habit to always say "hello" and "goodbye." 

Focus on clients who have stuck it out with you, through good times and bad. Do something considerate to thank your long-term loyal clients. A small gesture like sending a personalized thank-you card may be enough. Adding a small token of appreciation (e.g., a $5 gift card to a local coffee shop or bakery) may be something you do annually for clients who have reached a certain time line in your relationship (e.g., $5 after five years, $10 after ten years). 

Only offer what a client truly needs. Advising clients is a big responsibility; they trust you and you are obligated to serve them with their best interests in mind. Never sell them what they don't need. Be as authentic and genuine as you are transparent. Advising clients when a service isn't needed will go a long way in building loyalty and trust. 

Listen and take time to educate clients. As you listen and converse more, you'll learn more about each client. You'll likely begin to realize their needs perhaps long before they do. Rather than telling them what they need today or in the future, educate them and help them make decisions based on their expanded knowledge and understanding, versus relying on a sales tactic or pressure. 

Give referrals back. For clients who run a small business, helping them by referring new business will enhance their long-term loyalty. Ask small business clients for a few business cards and hand them out to your clients when it's appropriate.

Read more articles by Michael Alter.

About the author:

Michael Alter, payroll expert with an MBA from Harvard Business School, is a nationally recognized spokesperson providing thought leadership and sensible advice to help accounting and payroll professionals build deeper more profitable relationships with clients. Alter, president of SurePayroll, writes the Trade Secrets column on INC.com and is frequently published in Bloomberg TV, Wall Street Journal, and Entrepreneur Magazine.



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By Scott Heitland
Jun 26th 2015 01:11

Great piece here, Michael. In the world of customer service, providing good service and being polite about it is akin to clean dishes at a restaurant - it's a baseline customer expectation and doesn't earn you any extra points. You may end up with a satisfied customer, but that's not often sufficient to create a loyal customer. Going above and beyond is what it takes, and your tips offer some great ways to do just that.

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By Johana chaput
Jun 26th 2015 01:11

Great information and advice. I started my small business this year and I see how by using this information I can succeed. It just how I would like to be treated as I client, definitively!

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By Kingshuk
Jun 26th 2015 01:11

Thats a real good advice.. yes, customers loyality pays when we service them with satisfaction..

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By B Goodsell
Jun 26th 2015 01:11

I completely agree. I'd challenge some companies whether it is sensible to even split out the two depts formally. A good CS Rep understands her products and is used to dealing with customers both pre- and post-sale. She knows the importance of meeting customer's expectations and the horrors that come from NOT doing so better than a sales rep! Especially with the rise of social media, good customer service can make or break your company's bottom line these days. Thanks for the interesting article; I've forwarded to my team.

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