5 Good Reasons to Build Customer Loyalty
11 June 2014
Read by 3194 persons
Developing a customer loyalty program within your company means defining the creation of customer value as the heart of your activity, which will lead to increased profit: As a result, everyone wins.
Consequence: Customer loyalty reliably demonstrates the value provided by the company: customers buy again or, conversely, leave for the competition.
1st Reason: Increased Turnover and Market Share
Customer loyalty leads to an increase in the company's turnover and market share, which gradually improves with the arrival of better customers, which invariably leads to purchase recommendations (free advertising through genuine positive word-of-mouth - also called buzz).
Since the offer provides greater added value (because the creation of customer value is at the heart of the company's activity), the company can afford to be more selective about acquiring new consumers, focusing its efforts on the most profitable prospects with the highest potential for loyalty, which, by definition, will guarantee constant growth.
2nd Reason: Loyalty of High-Potential Employees
Constant growth allows the company to recruit and, above all, retain high-potential employees. Given that the company provides more value to customers, they will always be more satisfied with the products or services offered and will speak positively about them.
Thus, employees will have more pride in working for a company that prioritizes its customers and will be even more loyal. When you know the acquisition and training costs of an employee, keeping the best becomes paramount. Imagine a bank that advises its clients on their investments. The departure of an employee who knows the files very well and his replacement by a new one who has to relearn everything can turn out to be a very bad operation, even leading to the departure of certain customers that the former employee had made loyal to him or simply because the new one is not immediately as good as the former (personal knowledge of the customer, etc.). In addition, an employee who knows a customer very well will always be able to advise him better and bring him more value, which is what we all seek as customers.
3rd Reason: Increased Productivity and Reduced Operating Costs
Proud, stable, and loyal employees learn on their own to improve their work processes and tools in order to always gain productivity and reduce operating costs, while improving quality, which further increases the value brought to the customer. Productivity gains can be used wisely: salary increases, acquisition of better tools, improved training offers, which strengthens productivity, loyalty, and employee satisfaction.
4th Reason: Reduced Competition
Having loyal customers (therefore loyal) strengthens productivity and efficiency, as we have seen, thus leading to a cost advantage that is difficult for the competition to match. This advantage linked to the constant growth of loyal customers generates significant added value for the company. The largest companies, listed on the stock exchange, offer their shareholders excellent profits and maintain stable shareholding.
5th Reason: Shareholder Loyalty
Loyal, they more easily behave as partners rather than speculators. Thus, they stabilize the system, reduce the cost of capital and, above all, ensure that the company always has sufficient funds to finance investments which, inevitably, will further increase the creation of value for the customer (and return to point No. 1).
In conclusion, profit should not be the driving force behind the company's development, but it is nevertheless fundamental because it allows the company to improve its value creation and build loyalty among employees, shareholders, and customers in the long term.
Philippe Montant
Consequence: Customer loyalty reliably demonstrates the value provided by the company: customers buy again or, conversely, leave for the competition.
1st Reason: Increased Turnover and Market Share
Customer loyalty leads to an increase in the company's turnover and market share, which gradually improves with the arrival of better customers, which invariably leads to purchase recommendations (free advertising through genuine positive word-of-mouth - also called buzz).
Since the offer provides greater added value (because the creation of customer value is at the heart of the company's activity), the company can afford to be more selective about acquiring new consumers, focusing its efforts on the most profitable prospects with the highest potential for loyalty, which, by definition, will guarantee constant growth.
2nd Reason: Loyalty of High-Potential Employees
Constant growth allows the company to recruit and, above all, retain high-potential employees. Given that the company provides more value to customers, they will always be more satisfied with the products or services offered and will speak positively about them.
Thus, employees will have more pride in working for a company that prioritizes its customers and will be even more loyal. When you know the acquisition and training costs of an employee, keeping the best becomes paramount. Imagine a bank that advises its clients on their investments. The departure of an employee who knows the files very well and his replacement by a new one who has to relearn everything can turn out to be a very bad operation, even leading to the departure of certain customers that the former employee had made loyal to him or simply because the new one is not immediately as good as the former (personal knowledge of the customer, etc.). In addition, an employee who knows a customer very well will always be able to advise him better and bring him more value, which is what we all seek as customers.
3rd Reason: Increased Productivity and Reduced Operating Costs
Proud, stable, and loyal employees learn on their own to improve their work processes and tools in order to always gain productivity and reduce operating costs, while improving quality, which further increases the value brought to the customer. Productivity gains can be used wisely: salary increases, acquisition of better tools, improved training offers, which strengthens productivity, loyalty, and employee satisfaction.
4th Reason: Reduced Competition
Having loyal customers (therefore loyal) strengthens productivity and efficiency, as we have seen, thus leading to a cost advantage that is difficult for the competition to match. This advantage linked to the constant growth of loyal customers generates significant added value for the company. The largest companies, listed on the stock exchange, offer their shareholders excellent profits and maintain stable shareholding.
5th Reason: Shareholder Loyalty
Loyal, they more easily behave as partners rather than speculators. Thus, they stabilize the system, reduce the cost of capital and, above all, ensure that the company always has sufficient funds to finance investments which, inevitably, will further increase the creation of value for the customer (and return to point No. 1).
In conclusion, profit should not be the driving force behind the company's development, but it is nevertheless fundamental because it allows the company to improve its value creation and build loyalty among employees, shareholders, and customers in the long term.
Philippe Montant
