5 Good Reasons to Build Customer Loyalty
10 July 2015
Read by 5289 persons
Developing a customer loyalty model within your company means defining creating value for the customer as the core of your activity, which will lead to increased profit: Everyone wins. As a result, customer loyalty reliably demonstrates the value provided by the company: customers either buy again or leave for the competition.First reason: increased turnover and market share Customer loyalty leads to an increase in turnover and market share for the company, which gradually improves with the arrival of better clients, inevitably leading to purchase recommendations (free advertising through genuine positive word-of-mouth - also called buzz).
Because the offer provides greater added value (because creating value for the customer is at the heart of the company's activity), the company can afford to be more selective in acquiring new consumers, focusing its efforts on the most profitable prospects with the highest potential for loyalty, which, by definition, will guarantee constant growth.Second reason: increased loyalty of high-potential employees Constant growth allows the company to recruit and, above all, retain high-potential employees. Given that the company brings more value to customers, customers 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.
Knowing the costs of acquiring and training an employee, keeping the best becomes paramount. Imagine a banking company that advises its clients on their investments. The departure of an employee who knows the files very well and their replacement by a new employee who has to relearn everything can be a very bad operation, even leading to the departure of certain clients that the former employee had made loyal to them or simply because the new employee is not immediately as good as the former one (personal knowledge of the client, etc.).
Furthermore, an employee who knows a client very well can always advise them better and bring them more value, which is what we all look for as customers.Third 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 in 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 employee productivity, loyalty, and satisfaction.Fourth reason: reduced competition Having loyal customers 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 publicly traded companies offer excellent profits to their shareholders and maintain stable shareholding.Fifth reason: shareholder loyaltyLoyal shareholders are more likely to act 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, necessarily, will further increase value creation for the customer (and back 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 CEO ExeKutive.biz
Because the offer provides greater added value (because creating value for the customer is at the heart of the company's activity), the company can afford to be more selective in acquiring new consumers, focusing its efforts on the most profitable prospects with the highest potential for loyalty, which, by definition, will guarantee constant growth.Second reason: increased loyalty of high-potential employees Constant growth allows the company to recruit and, above all, retain high-potential employees. Given that the company brings more value to customers, customers 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.
Knowing the costs of acquiring and training an employee, keeping the best becomes paramount. Imagine a banking company that advises its clients on their investments. The departure of an employee who knows the files very well and their replacement by a new employee who has to relearn everything can be a very bad operation, even leading to the departure of certain clients that the former employee had made loyal to them or simply because the new employee is not immediately as good as the former one (personal knowledge of the client, etc.).
Furthermore, an employee who knows a client very well can always advise them better and bring them more value, which is what we all look for as customers.Third 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 in 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 employee productivity, loyalty, and satisfaction.Fourth reason: reduced competition Having loyal customers 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 publicly traded companies offer excellent profits to their shareholders and maintain stable shareholding.Fifth reason: shareholder loyaltyLoyal shareholders are more likely to act 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, necessarily, will further increase value creation for the customer (and back 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 CEO ExeKutive.biz
