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15 Reasons Your Customer Loyalty is Plummeting and How to Fix it

15 Reasons Your Customer Loyalty is Plummeting and How to Fix it

Customer Loyalty Will Likely Fall When This Happens. Here's Why and How to Fix It.

The customer loyalty landscape has changed dramatically in the last few years. With the advent of social media, customers have more power than ever before to voice their opinions about companies and products. And they're not afraid to use that power. 

 As a result, businesses are finding it increasingly difficult to keep customers loyal. According to a recent study by CallMiner, U.S. companies hemorrhage $136.8 billion each year due to avoidable consumer switching. These are customers that would happily continue to purchase from their current provider if only the service was up to their expectations. Customer loyalty will likely fall when you ignore the signs of discontent. 

 With so many choices in the market today, loyal customers are becoming harder to find. When things don't go their way, it's easy to jump ship and try a competitor. This puts pressure on business owners to find ways of improving their customer experiences and creating an emotional connection with customers. 

 When customer loyalty falls valuable customers are lost to your competition. This is damaging even if you swap customer for customer with another company. That's because a new customer is less valuable than a loyal customer that makes regular purchases.  (Try these strategies to win back lost customers.)

 Marketing Metrics recently reported that organizations are 14 times more likely to sell to an existing customer than a new one. Another study by Bain & Company and Harvard Business School found that "increasing customer retention rates by 5% increases profits by 25% to 95%." These statistics illustrate both the value of existing customers and the losses you're likely to face if you aren't retaining them. 

 Customer loyalty will likely fall when any of the following conditions are present. Let's first learn what affects customer loyalty. With that base, we'll be able to craft a strategy for increasing customer satisfaction so that we can build customer loyalty that lasts.

A man screaming into his telephone.

Customer Loyalty Will Likely Fall When These Conditions Are Present

The quickest way to destroy customer loyalty is to provide a terrible customer experience. But most companies aren't offending clients this blatantly. Instead, they're usually making a lot of little mistakes that compound until customers move on. There are many reasons why customer loyalty might falter. Here are a few of the most common:

The Company Isn’t Meeting Customer Needs

This is perhaps the most obvious reason why customers might take their business elsewhere. If a company isn't providing the products or services that customers want, they're not going to stick around for long. And the more competition you face in the market, the faster customer loyalty will likely fall when you continue to miss the mark. 

 Imagine you buy lunch at the same spot each day, but recently their food quality has suffered. If you only have one or two other lunch options, you're more likely to forgive these declines. But if your favorite spot is surrounded by a bevy of other vendors, you're likely to expand your horizons fairly rapidly. 

 Of course, you don't want any customers to fall away, so you should always assume that every customer is on the verge of leaving, and provide the stellar service required to keep them loyal. To do this, businesses need to constantly be evaluating what their customers wants and needs to make sure they're meeting them. This can be done through surveys, customer interviews, and other research methods.

The Company Is Too Expensive

Many customers are price-conscious, and many businesses have responded by offering rock-bottom prices. However, this approach can backfire, as customers may view low prices as indicative of low quality or poor customer service. Instead, businesses should focus on competing based on the overall value they offer their customers. Otherwise, customer loyalty will likely fall when you ignore the importance of price. 

 That said, not all customers are value shoppers. Some focus entirely on price and will go for the lowest possible price. These aren't customers you should work to keep, as they're unstable. All it takes for them to leave is a slightly better price elsewhere, and you have no control over your competitor's pricing. 

 A better strategy is to balance your price against the benefits it brings your customers. Most consumers are happy to pay a fair price as long as it's commensurate with the value it delivers. You can make customers happy with a higher price as long as they get more for it. But if you're too expensive, and your higher price doesn't deliver extra value, you'll find yourself shedding customers at an alarming rate.

An angry customer staring at the camera.

The Company Doesn’t Keep Its Promises

If a business makes a promise to a customer and then fails to deliver, that customer is going to be very disappointed. This could be anything from promising a product will be delivered by a certain date and then not meeting that deadline, to broken promises about features or benefits. 

 Good customer service requires that you do what you say you will because resilient relationships are based on trust. If a customer can't trust that you'll do what you say you will, they'll never feel confident in your product or service. Customer loyalty will likely fall when you repeatedly break your word. 

 To avoid this issue, companies need to be very clear about what they're able to deliver and communicate with customers throughout the process to ensure that expectations are being managed. Customer loyalty will likely fall when break your promises.

The Company Isn't Responsive or Engaged

Customers want their voices to be heard, and when businesses ignore them or don't engage with them in meaningful ways, they're likely to lose their loyalty. This could be in the form of poor customer service or simply a failure to respond to feedback and complaints. Customer loyalty will likely fall when you ignore them. 

 This is more true today than ever before. Social media has made it extremely easy for businesses to keep in contact with their customers, and customers know it. They're far less likely to be forgiving of a non-responsive business than in years past, which means if you aren't availing yourself of the opportunities for engagement that exist, your customer base will shrink. 

 To improve this, businesses need to make customer engagement a priority, whether that means actively soliciting feedback through surveys and other methods or simply being more responsive to customers when they reach out.

The Company Doesn't Show Appreciation

Customers like to feel appreciated, and when they don't, they're more likely to take their business elsewhere. Can you blame them? Consider all the business they've given you. They could have gone elsewhere, but they didn't. Showing appreciation is a good method for increasing customer loyalty that doesn't cost a thing. Just say, "Thanks!" 

 There are many simple ways to show appreciation, but one of the most effective, and affordable, is automated handwritten cards. With Simply Noted, you can send one-off thank you notes, or full-scale customer blitzes with the warmth and authenticity you only get with handwritten cards. Our handwriting machines are the most advanced on the market, perfectly recreating the subtleties of real handwriting to create a convincing illusion. 

 Gratitude creates a positive feedback loop. First you let your customers know how much you appreciate them and their business. This creates feelings of goodwill and camaraderie; in turn your customers will feel more grateful for the products and services you offer. The end result is increased customer loyalty. 

 You should work to minimize the opposite situation. Customer loyalty will likely fall when you stop paying them back with gratefulness for their continued business.

A loyal customer making an order on her computer.

How to Build Loyal Customers

If your customer loyalty is falling, don't despair. There are steps you can take to get it back on track and improve your relationship with your customers. Here are a few strategies to consider.

Invest in Customer Engagement and Feedback

One of the most important things you can do to rebuild customer loyalty is to actively solicit feedback from your customers. This can be done through regular surveys, focus groups, and other methods. By getting a better understanding of what your customers want and need, you can tailor your product or service offerings to meet those needs, improving their experience with your business.

Focus on Quality and Customer Service

Your customers should always be your top priority, and that means providing them with the best possible product or service you can. In addition to ensuring the quality of your offering, you also need to focus on delivering excellent customer service. This includes being responsive to customer complaints and feedback, going above and beyond to solve problems, and offering quick and efficient service.

A smiling business owner in her store.

Show Your Appreciation for Their Business

One of the primary reasons that customer loyalty falls is because businesses fail to show appreciation for the business they've received from customers. This can be done through simple gestures like sending handwritten thank you cards, offering rewards or discounts, or providing other perks to loyal customers. By showing your customers that you appreciate their business, you can increase the likelihood of them remaining loyal to your brand.

Keep Your Promises and Follow Through on Commitments

Another key reason customer loyalty falls is because businesses make promises they can't or don't keep. This could be anything from promising a new product or service by a certain date and not delivering, to making grandiose claims about your business that don't hold up in reality. No matter what it is, if you make a promise to your customers, you need to follow through. Otherwise, they'll quickly lose faith in your brand. This applies to your most valuable customers and new customers equally. 

 If you think you might miss an expectation, check in and set customer expectations early. If they feel you're keeping them apprised of the situation and staying in contact throughout, they'll likely forgive you.

A customer smiling as she shops for groceries.

Create a Customer Loyalty Program

If you really want to boost customer loyalty and keep it from dropping in the first place, consider creating a customer loyalty program. This can include anything from offering discounts or freebies based on how much a customer spends or how often they shop with your business, to providing rewards points that customers can redeem for valuable rewards like free products or services. By building a loyalty program that truly connects with your customers and provides them with value, you can create an ongoing relationship that will help keep customer loyalty high. Rewards programs that offer valuable rewards are usually more successful than less generous programs, but you also have to watch your bottom line.

Be Authentic and Transparent

A loyalty program gives your customers a financial incentive to stay with you, but to build lasting trust, you need to be authentic and transparent in your dealings with them. This includes being honest about your products and services, as well as your company's policies and practices. It also means being upfront about any mistakes or issues that may occur. By being authentic and transparent, you can show your customers that you're a trustworthy business they can rely on.

Respect Your Customers' Time and Attention

With the proliferation of digital channels and the ever-increasing amount of information available, it's more important than ever to respect your customers' time and attention. This means being selective about the messages you send them, and ensuring that they're easy to understand and relevant. It also means sending only what's necessary, avoiding spammy marketing tactics like email blasts and unwanted phone calls.

Foster Strong Relationships With Your Customers

Ultimately, customer loyalty comes down to the relationship you have with your customers – or lack thereof. If you want to maintain customer loyalty, you need to foster strong relationships with your customers based on trust, respect, and appreciation. By doing so, you can create a loyal customer base that will stick with you through thick and thin.

A woman handling a customer complaint on the phone.

Handle Customer Complaints Promptly and Effectively

No business is perfect, and there will inevitably be times when customers are unhappy with your products or services. It's important to handle customer complaints promptly and effectively, in order to maintain their loyalty. This means responding to complaints in a timely manner, investigating the issue, and taking appropriate action to resolve the problem. It also means being transparent about the situation and keeping the customer updated on your progress.

Monitor Your Customer Satisfaction Levels

It's important to regularly measure customer loyalty levels in order to identify any potential issues early on. This can be done through customer surveys, focus groups, or other research methods. By monitoring your customer satisfaction levels, you can quickly address any problems that arise and prevent them from impacting your business down the line. 

 By following these tips, you can maintain customer loyalty and keep your business thriving for years to come.

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