Customer Loyalty - Why its Important to Build Customer Loyalty   by Patricia Lotich

According to Answer.com, companies spend $412 billion dollars every year on advertising and trying to attract new customers. Marketing and advertising draws in new consumers but a loyal customer base will grow organically. Organizations that are successful in keeping current clients have the ability to grow the company when those loyal customers bring their friends. The combined efforts of a strong marketing strategy and development of a loyal consumer base can help to facilitate business growth.

Loyal customers are developed by delivering quality products and services as well as a consistent effort to meet and exceed expectations. Organizations that solicit feedback have the opportunity to identify unmet expectations and put plans in place to meet expectations.

It is important to have a specific service strategy to help initiate and monitor the customer experience. Comment cards and satisfaction surveys are just a few of the tools used to solicit feedback. Combined with targeted improvement plans can create the environment for a loyal customer base.

When consumers are loyal to a business, they are more likely to do one of three things:

Increase Their Purchases

Satisfied customers come back and repurchase but are also more likely to increase their purchases. For example, a restaurant that has a loyal customer base may increase business because their patrons come back to enjoy their product.

Stay With The Company

When consumers are satisfied with an organization, they will be loyal and not jump ship with the newest company, fad or deal. There are many people who are loyal to organizations who have done a good job of meeting their needs and exceeding expectations. These are the consumers who are committed to sticking around for the long term.

Tell Others About Their Experience

Customers who have great experiences tend to want others to share in the same great experience. They do this by telling their friends about the great product or service experience they had. Word-of-mouth advertising is known to be one of the most effective ways to attract new customers.

Satisfying consumers is the right thing to do because they are paying for the service or product. But another great way to capitalize on satisfied customers is to leverage that loyalty to grow the business. Monitoring customer satisfaction over time can provide the data that can be used to leverage loyal consumers.

The advantage of having very satisfied or "wow" customers is that the data can then be used as a marketing tool. I'm sure you've heard advertisements boasting "#1 in satisfaction" or "best at". When customer satisfaction data is available, it can be used as a marketing tool. What better advertisement than to boast a 95% satisfaction rating.