Why is Customer Loyalty so Important?

Why is customer loyalty so important? Discover statistics highlighting the power of it and how to build successful customer retention strategies.

Why is Customer Loyalty so Important?

In today’s hyper-competitive business landscape, consumers have instant access to every brand in the world. With just a few clicks, they can compare features, price points and switch allegiances with brands in a heartbeat if their needs aren’t constantly met. 

Therefore, it’s no longer enough for companies to focus on providing great products and services. They need to build deep connections with audiences to ensure customers return and spread positive word-of-mouth reviews to attract new opportunities.

This article will explore why customer loyalty is fundamental to your brand’s success in the digital age and offer advice for cultivating a loyal customer base that spurs long-term growth. Read on to learn more.

Why is customer loyalty so important? Let’s look at the numbers

Fostering customer loyalty can profoundly impact your business’s profitability and reputation. The statistics speak for themselves:

  • Increased profitability: Research from Bain & Company reveals that a mere 5% improvement in customer retention can increase profits by as much as 25%.
  • Improved conversion rates: Companies are 60-70% more likely to convert an existing customer into a long-term customer. In contrast, the likelihood of converting a website visitor into a first-time customer is just 5-20%.
  • The 80/20 rule: Gartner found that 80% of a company’s future revenue comes from just 20% of its existing customers.
  • Retaining customers is more cost-effective: Acquiring a new customer costs five to 25 times more than retaining an existing one. Retained customers also spend more with their favourite brands and shop more frequently.

The evidence is irrefutable: increasing customer loyalty is a great business strategy. But what does boosting customer loyalty specifically entail? How can companies maximise customer retention and capitalise on loyal fans to raise their brand’s profile?

Winning customer loyalty strategies

The first step to increasing brand loyalty is to examine your customer touchpoints – everything from website and app experiences to post-purchase communications – and look for ways to enhance these interactions. Here are some ideas to get you started:

Personalising pre-purchase experiences boost engagement

From the moment a potential customer first encounters your brand, provide them with content relevant to their specific needs. Think product recommendations, targeted promotions and text/visuals that address their queries.

According to Google, 59% of people expect brands to personalise their experiences based on their favourite items. Brands can analyse website/app data to track browsing behaviours and craft a compelling customer journey that positions their visitors’ unique preferences front and centre.

Frictionless user experiences increase conversions

According to Forrester's research, user-friendly websites and app designs can increase conversion rates by as much as 400%. Clean, uncluttered interfaces, intuitive navigation, and lightning-fast loading speeds all contribute to a great user experience (UX).

However, on a simpler level, clear product information, high-quality visual content, and simple site search functionalities encourage website visitors to spend more time on your site/app and approach your brand again in the future.

An omnichannel presence encourages brand interaction

A Salesforce survey found that 75% of customers expect brand consistency across all brand websites, apps, social media profiles and brick-and-mortar stores, with 73% of respondents admitting they would switch to a rival brand if they don’t get this experience.

In the digital age, integrating all customer touchpoints to enable customers to reach you at all times on all devices has never been more critical. Seamlessly connecting all communication channels helps companies build trust and customer satisfaction, ultimately increasing loyalty.

Proactive support improves customer satisfaction

Proactive customer support is a key loyalty driver. 71% of customers crave it, and 72% of respondents who receive it report higher customer satisfaction scores. The secret to elevating your support provisions is anticipating customer needs and demonstrating genuine empathy.

Proactive customer service comes in many forms, from smooth on-site checkout experiences to live chat support and clear FAQs. Over half (57%) of consumers feel more loyal to brands that deliver outstanding customer service, with 52% going out of their way to buy from their favourite brands – even if they can find the same product cheaper elsewhere.

Rewarding customer loyalty secures trust

Designing a loyalty programme within your website, app or store can increase your company’s revenue by as much as 25% annually. The key to making your loyalty scheme a success is to be as generous as possible with your discounts, as increased sales can lead to higher profits.

From a web and app design perspective, our work with Virgin Active demonstrates that creating a visually appealing points tracking and rewards hierarchy system makes the customer experience (CX) engaging and easy to understand. Additionally, we leveraged the brand’s distinctive design elements (i.e., logos, colours and fonts) to foster a sense of trust and familiarity within the app, encouraging more repeat business and long-term customer loyalty.

Future Platforms: Crafting loyalty-building digital experiences

If your company is looking to craft compelling digital experiences that draw in lifelong customers, Future Platforms can help. We’re website and app development experts with a wealth of experience creating groundbreaking digital assets for a wide range of businesses. We like to stay ahead of the tech curve while ensuring our innovative digital products remain accessible and perfectly tailored to your users’ needs.

We collaborate closely with your brand to understand the nuances of your market and your overall company goals before creating an actionable project roadmap that incorporates prototype development, product design, user testing, validation and project refinement. We help your company harness digital design as a strategic asset, so if you would like to learn more about how Future Platforms can help you build brand loyalty and boost your bottom line, contact our team today.