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It’s no secret that satisfying your customers builds long-term loyalty, long-term sales and long-term revenues. Strong customer loyalty is the single biggest factor that gives you a competitive edge.
Many people use the words "customer retention" and "customer loyalty" interchangeably rather than in tandem. At its most basic level, customer loyalty means a customer comes back and buys again. In effect you’ve "retained" that customer.
Your goal should be to develop one or more of the five types of customer listed here. Some, however, are easier to achieve than others.
The problem with purchased loyalty is that it can be pilfered. Say you have a frequent flier account with a particular airline. If the only thing that keeps you flying with them is the points system, you’ll quickly switch when another airline offers you a better deal. In a purchased loyalty situation the customer is loyal to the system, not to the company. Every company wants a sustainable competitive advantage, and a purchased loyalty program can provide one. Even so, purchased loyalty is a tough advantage to maintain.
Convenience loyalty applies in an online setting too. For example, if you have the right real estate product on a home page or portal, you may create loyalty through convenience. But the advantage is fleeting. In fact, the Internet has largely eliminated the power of convenience loyalty, both online and offline.
When customers don't have options they have little choice but to be loyal. Constraints create loyalty. Restricted loyalty is great for a business, if you can get and maintain it.
If you believe you are missing the mark where loyalty is concerned, you can do something about it. Try these solutions:
Finally, remember that the key to developing true loyalty is to always put the customer first. A well-treated individual will come back, even without expensive advertising and deep discounts. In almost every market and industry, in fact, customer loyalty is the best form of competitive advantage your company can possess.