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7 Ways to Keep Customers (Really) Loyal

Make sure people do business with you because they want to, not for lack of another option.
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Customer loyalty is critical to a business. Not only does it help control marketing costs, as you're less dependent on constant customer acquisition, but there's a pleasure in dealing with regulars, as you build true relationships with people.

You might think that return business helps you know that you're doing something right, but that may not be the case. As The Consumerist noted, there are reasons that people buy from companies they hate. They may love the products but hate management, have no practical viable alternative, or competitors may be no better.

Loyalty is a tricky thing. You want it, but it has to come in the right way. Here are seven things you can do to improve the good type of loyalty and minimize people holding their noses while doing business with you.

Listen to customers

Remember the old saying that the customer is always right? Even more important is that the customer is actually there. One of the biggest insults you can deliver to people is to act as though they don't exist. It's a way of saying that someone has absolutely no importance or meaning. A company does this when it fails to respond to customer communications or even when it requires them to explain a problem time after time to different people. Invest in a CRM system and have people take notes. Make someone responsible for responding to emails, letters, and phone calls. Even if you don't ultimately agree with a customer's position, acting as though that customer exists means you've said that person matters, and the person will appreciate and remember it.

Connect with customers

People like to deal with those that make them feel comfortable. Some entrepreneurs do business in and around where they're from, so they can develop natural connections. If you're working with a more diverse customer base, you'll have to try harder to have that rapport. Don't pretend to be like them: It's insulting, creepy, and obvious. Instead, have your people find common ground. We are all more alike than we'd care to think. Look for those similarities rather than focusing on differences. As you show interest in who they are, you'll find they open up more and begin to relate to you, as well.

Be professional

No matter how difficult you find a customer, focus yourself and staff on being the consummate professionals. Although you've undoubtedly had experiences with people who have been rude or inappropriate, one of the best examples of how not to respond to customers is Amy's Baking Company. It parlayed a disastrous reality-television appearance into a complete social-media fiasco. Anytime you're about to talk to someone, think of how you'd respond if someone spoke to you the same way.

Communicate your value

It's easy for customers to take you for granted. There may be a veritable world of activity that goes on at your business to make their lives better and easier. But how will they know unless you tell them? Don't brag, but do inform people about the business processes and systems working for them. That helps customers appreciate what they get from doing business with you.

Have a plan

This and the following two ideas come from conversations I've recently had with experts in loyalty programs. You want to engage people and give them reasons to continue doing business with you. Don't do it on the fly. Think through issues such as what you can offer, how to avoid effectively bribing customers, and the logistics of tracking customer activity and tallying what they receive as a result. This can get far more complicated than a simple punch card that someone uses for a free cup of coffee, but the potential to benefit the business is much higher.

Use data

You accumulate data as people do business with you. Make use of it. What things go together? What are the signs that someone could become a bigger customer for you? Can you begin to anticipate what people will want so you can delight them unexpectedly? The better you know customers though their actions, the more effectively you can understand what they value and make doing business with you even more worthwhile.

Don't be boring

The cardinal sin in customer loyalty program upkeep is for companies to put plans into place and then never change them. When everything keeps going the same way, people tune out. Keep evolving your plans to increase customer loyalty.

Last updated: Aug 11, 2014

ERIK SHERMAN | Columnist

Erik Sherman's work has appeared in such publications as The Wall Street Journal, The New York Times Magazine, and Fortune. He also blogs for CBS MoneyWatch.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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