Regardless of whether you are an entrepreneur, investor, or a business professional, the concept of customer loyalty is a crucial one.
The fact is that 68% of customers leave because they feel brands do not care about them, and the cost of these lost customers can add up fast. It’s estimated that acquiring new customers is 500% more expensive than keeping old ones.
How can brands get customers to keep coming back, to avoid the problem of high churn?
The Science Behind Customer Loyalty
One way of looking at customer loyalty is to think about the underlying behavioral psychology.
Today’s infographic is from West, and it outlines some of psychological principles surrounding customer loyalty, and how they can be applied to help retain existing customers.
Retaining customers is vital to success, but achieving a low churn rate is never an easy task. After all, customers can be fickle, and brands already invest millions each year to make sure they can handle extremely high volumes of customer interactions.
How can brands lower their churn, while making the most out of their customer interactions?
Five Ways to Build Customer Loyalty
Here are some tried and true methods that help build customer loyalty, and why:
1. Deliver unexpected rewards
Unexpected rewards produce a huge rush of dopamine to the brain. By rewarding customers when they least expect it, brands can really make an impression.
2. Start and end strong
People tend to have cognitive biases towards the first and last things they experience. By making sure the customer experience is strong at both of these touch points, odds can be improved that they will come back.
3. Create a social identity
Social identity theory shows that when people feel a part of an established in-group, they are more likely to stay loyal to that group. Brands can help by creating or nurturing these channels, allowing customers to develop bonds with each other, as well as the company.
4. Let customers share rewards
People are frequently motivated by helping others, so giving customers the opportunity to share benefits or rewards can create a new facet to the customer relationship.
5. Show customers you share their values
Studies show that customers rate shared values as a key reason behind their relationships with brands. Make sure you communicate brand values loud and clear.