What is Customer Loyalty? Exploring the Most Direct Cause of Customer Loyalty

It has been said that it is cheaper to keep a current customer than obtain a new one. It might seem strange to spend time and money on existing customers who have already bought your products or services.  However, retaining loyal, long-term customers can have a significant impact on your business success. A loyal customer will buy from you, support you, and get you more customers!

What is customer loyalty?

Customer loyalty refers to the emotional and behavioral commitment a customer has toward a brand, company, or product. Loyal customers consistently choose a brand’s offerings over competitors, even when other options are available. They will also tend to make repeat purchases, recommend the brand to others, and exhibit trust in the brand.

Understanding the direct causes of customer loyalty will provide the mechanisms for measuring progress and customer satisfaction. These main factors are:

1. Delivering consistent quality
2. Providing excellent customer service
3. Engaging with customers regularly

A business needs consistent communication with customers regarding the benefits their company delivers. Snagit, a tool from TechSmith, can help your business build and maintain customer loyalty by improving communication and engagement. Capturing and sharing data, simple updates via video, and personalized customer communications are just a few easy ways Snagit can help in the pursuit of repeat business.

The most direct causes of customer loyalty

Understanding customer loyalty does not have to be a daunting proposition.   The vast amount of data on this topic can be simplified into three key components. These three steps can then be boiled down to one overarching theme: trust. When a customer trusts, they will be more likely to be loyal through the inevitable ups and downs of a business cycle. 

Delivering consistent quality

With so many options available to customers, it is imperative that your product or service is being delivered at a consistent and high level of quality. One of the best ways to gather customer feedback is through a survey. Obtaining information from your customers after an encounter is the best way to get just-in-time data that will help you adjust and improve your customer experience. 

Snagit provides a way to gather, compare, and track customer feedback visually. The video component of Snagit allows for communication between teams so the message is received once and understood by all. This allows for all departments to utilize the information and ensure product quality remains high. 

Don’t forget to acknowledge and communicate with those customers who may have constructive feedback or concerns. Customers can be forgiving when they know a business cares about their opinions.

Providing excellent customer service 

What is excellent customer service? You can apply the golden rule to answer this question. Treat your customers the way you want them to treat your business or products. When you think of the question in this light, what words come to mind? Empathy, understanding, positive experience, clear communication. These are the best ways to reinforce trust and loyalty and secure repeat business. 

According to Gartner, if customers receive value during a service interaction, there is: 

• 82% probability of repurchase or renewal when presenting the chance to switch
• 86% probability of increasing wallet share
• 97% probability of sharing positive word-of-mouth

Utilizing Snagit, excellent customer service can be facilitated through the creation of tutorials, screen recordings, and clear communication materials that enhance customer support. 

Engaging with customers regularly

Customers do not want to be thought of as a number or a dollar sign. Reaching out to customers only when their license is about to expire or there is a new offering to be purchased is a surefire way to lose customer loyalty. Regular and meaningful communication with a customer will keep them sticky with your business and develop an atmosphere of familiarity and trust. 

Engaging customers in a variety of ways will allow them to engage in a manner that best fits their needs. Traditional methods, such as only using the written word, have their place. However, tools such as Snagit allow for the capture and sharing of personalized content that enhances the customer experience, keeps customers engaged, and increases the likelihood of them opening future content. 

Why customer loyalty is important

Gaining customer loyalty and retaining repeat customers does take time, effort, and a long-term commitment. Understanding the why helps keep a business focused when other priorities may seem more pressing. 

Customer loyalty increases customer retention

Loyal customers are more likely to stick with a brand, reducing churn. They are also more likely to engage with your brand on social media, recommend your products to friends and family, and purchase new product offerings. According to a study by Bain & Company, increasing customer retention rates by 5% can increase profits by 25% to 95%. 

Retaining customers is capturing returning business, and Snagit can be used to create and share targeted content that drives repeat purchases. Capturing customer preferences will provide the information that will allow your business to create personalized marketing messages, targeted offers, and tailored recommendations all through the utilization of Snagit. 

Customer loyalty increases repeat business and a higher lifetime value

Long-term loyalty will increase a customer’s lifetime value. According to Business.com, returning customers spend 67 percent more than new customers.  

However, a one-time purchase does not equate to a customer for life. To obtain repeat purchases, a business must invest in marketing, customer loyalty programs, and other ways to create a happy customer who is engaged with the product or service.

A loyal customer base results in word-of-mouth

In this day and age of technology and media at our fingertips, word-of-mouth marketing is still vitally important in 2024. This is still one of the most effective ways to build trust in a cost-effective way. Collaborating with social media influencers, creating a referral program for family and friends, and positive reviews are all ways to generate brand advocates, driving new customer acquisitions. 

Snagit is a great way to capture and share content that amplifies positive customer experiences. 

How to build and maintain customer loyalty

Building customer loyalty is not a one-and-done proposition. Keeping the customer engaged over time is one of the best ways to maintain customer loyalty. There are a variety of elements and practices that can be applied. 

As discussed previously, providing exceptional customer service and personalized experiences will lead to the building of trust and appreciation for the care your business provides on an individual basis. This applies to all methods of service: telephone, chat, tickets, and website ease of use. 

Proactively asking for feedback is an excellent way to keep your finger on the pulse of the customer base. Just remember, it is not enough to engage with customers through surveys and programs– communication must be reciprocated when there is negative feedback or suggestions. 

A customer rewards program will go a long way to keeping customers engaged with your current products and future enhancements. Keep in mind that these programs are not only beneficial to current customers but are a great conduit for capturing family and friends. 

Whenever possible, personalize the communication with your customers. Use your database information to acknowledge past purchases, confirm current status, or show gratitude for being a loyal customer. Technology has made it very easy to ‘fake’ personalization—use the knowledge of your customers to let them know they are valuable to your business in a meaningful way. 

The ease of using Snagit makes it possible to build and maintain customer loyalty in such a way that the information and insights gained can be leveraged, updated, and modified for years to come. Snagit can be used to capture customer insights and create content that resonates with your customers. In addition, if capturing feedback, improving customer communication, or creating engaging content that fosters loyalty are on your list of to-dos, then Snagit is the right tool for you. 

If your business is not currently using Snagit, sign up for a free trial and see how it can transform your customer interactions. There are also numerous videos and tutorials where you can find how to leverage the tool to fit your needs. 

If you currently have a Snagit license and are unsure how to start, reach out to us and we will be happy to point you in the right direction. 

Want to learn more about how video helps build customer loyalty? Check out “How video helps Cravings Popcorn maintain a fiercely loyal fan base”.