The global economy is facing a difficult period due to the lingering effects of the pandemic and ongoing tensions between Russia and Ukraine. Businesses worldwide feel the pinch as inflation rises, wages fall, and consumer spending declines.
Many brands struggle to survive in the face of inflation. Some pass down costs to customers through a price hike to mitigate increased expenses. Others cut down prices, which can give their sales a jolt.
However, brands must invest in customer marketing to keep customers, allowing the business to go beyond merely surviving.
Why customer loyalty matters
Establishing customer loyalty is an essential part of any successful business. Loyal customers are the lifeblood of your brand, providing repeat purchases and support for your products or services. The probability of sales with new customers is only 5 to 20%, while it leaps to 60 to 70% with them.
Your regular customers bring new ones through their word-of-mouth marketing, helping increase your sales. And the longer they stick with your brand, the stronger your relationship with them.
With these in mind, understanding why customer loyalty matters, how to best cultivate it, and customer-centric marketing practices should be top priorities to succeed in today’s competitive market.
While price hikes bring in more from each sale and lower prices boost total sales, with both tactics reducing the impact of inflation, they are only temporary solutions. On the other hand, when you inspire customer loyalty, pricing is not necessarily the decisive factor in whether they will buy your products.
Bringing down prices will have you earn less for something they will buy either way, and any price increase that needs to take effect will not necessarily drive them away. Research findings suggest that almost 40% of loyal customers will stick to your brand even if cheaper ones are available.
Besides, other ways to boost sales do not require increasing the prices of your customers’ regular purchases. For example, you can create a line of products with premium or upscale branding and price each item higher than your standard selection. Your regulars may opt for those products even if they are more expensive, especially if they love your brand.
Ultimately, it comes down to not just making any customer buy from you but executing the right loyal customer marketing to keep these valuable customers while boosting your sales and expanding your customer base.
How to boost sales while keeping customer loyalty
Maintain quality, build and keep trust
Maintaining product quality is essential to ensuring customer loyalty. Keeping products at a high standard of excellence helps build trust between customers and your brand, as they know they can rely on receiving reliable goods or services that meet their expectations.
Cutting costs affecting product quality may save your business some money now but can drive away a regular customer for life. Instead of a stopgap solution to keep the cash flowing in, keep the quality to keep the customers.
Loyal customers are willing to pay for brands they already trust. So build on what you have already gained instead of risking it. What you can do instead is to come up with a price strategically while maintaining the quality that makes your customers happy and satisfied.
For example, you can keep the price instead of lowering it or, if necessary, implement a price increase. Keep honest communication with your customers in whatever direction you take so they feel involved in your decision-making process.
You can also throw in perks, like a freebie with a specified purchase total or conditional free shipping. Conditional free shipping, free shipping offered to customers who meet a minimum amount or purchase specific items, encourages them to shop more and reduces the cart abandonment rate. This type of promotion can be highly effective in boosting sales, as it incentivizes customers to make larger purchases and helps increase customer loyalty.
“Give back” to loyal customers
One of the best ways to show appreciation for your customer’s loyalty is by giving back somehow. You can give back to your patrons in many ways, from discounts and rewards programs to loyalty gifts.
Doing this shows appreciation and creates more opportunities for repeat business and recommendations to other potential customers.
Offer subscriptions or memberships
Subscriptions and memberships give customers access to exclusive products, services, discounts, rewards, and other benefits unavailable to non-members.
These perks and incentives can encourage customers to keep coming back and make more purchases over time, making the offering relevant to all customers. It can also be an easy way to turn new customers into loyal ones, as they experience the benefits of being a member and see the quality of your product or service.
Additionally, subscription plans create recurring revenue streams, which can be used to reinvest in the business’s growth.
Automation & process improvement
Automation helps streamline processes, reduce costs, and improve efficiency, maximizing operational performance. One popular example of automation in the e-commerce context is automated order processing.
Automated order processing allows your online store to process orders automatically as they are placed, saving time and money by reducing manual labor. This automation ensures that orders are fulfilled quickly and efficiently, improving customer satisfaction.
Moreover, automated order processing can reduce errors associated with manual order entry and help streamline the entire order fulfillment process.
Keep your brand strong through a strong customer relationship
Cutting costs and boosting cash flow does not have to mean sacrificing your frequent customers. You can find ways to reduce expenses through the customer-centric marketing practices mentioned above while still providing a great customer experience.
Learn more about boosting your business cash flow while keeping your customers loyal and happy with your brand. Get your FREE copy of the Shopify Plus Commerce Trends 2023. Download now and learn how to be a strong brand despite inflation.