How to Build Customer Loyalty in the Digital Age

How to Build Customer Loyalty in the Digital Age

This post was authored by Matthew Draper and originally appeared here on Liferay.com

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The age of digital transformation has helped companies better understand and connect with their target audiences, with everything from dynamic content to page behavior insights helping to create a better picture of how individuals interact with companies. However, it has also greatly affected how loyal customers are to any given company.

Studies show that customers are more likely than ever to jump to competitors when they become dissatisfied with their current services, no matter how long they may have had a relationship with a company. Research from Vision Critical has found that 42 percent of Americans will stop shopping with a brand after only two bad experiences, making consistent high-quality customer experience critical in customer retention. While that lack of loyalty may mean ample opportunities for companies looking to expand their clientele, Harvard Business Review research shows that it costs approximately seven times more to gain a new customer than it does to retain one. As such, cultivating customer loyalty has both reputational and financial benefits.

But the question remains, how does a company improve customer loyalty in an age where loyalty is in short supply?

Encouraging Customer Loyalty Through Good Customer Experience

Changes in modern customer loyalty can be seen as an outcome of digital transformation, with more services than ever made convenient and easily accessible online. However, today’s customer often takes greater advantage of these online opportunities than the companies themselves, leading to today’s drop in customer loyalty. One of the largest factors in constantly shifting customer loyalty in the digital age is customer experience. Studies show that while pricing and quality of products may play a part in why a customer chooses one company over another, customer experience (CX) is the most important aspect in his or her choice.

The term customer experience can be applied to any interaction that a potential client has with your company, but there are several specific areas that can have the largest impact on loyalty. Brands can fight back against the waning tide of customer loyalty and its impact on client retention by improving the following areas of customer experience.

Ease of Access

Existing and potential clients should have the ability to quickly and completely reach your company’s services whenever and wherever they want. Today, customers expect to find and receive the online services they want without complications or delays. Without true brand loyalty, making your services easily accessible can make a major difference during a potential customer’s split-second choice between your company or a competitor.

Pre-existing loyalty may cause an existing client to go to you first, but not being able to quickly find/receive the services they want will easily send them to your competitor. Companies should consider how to implement omnichannel experiences in their services. In doing so, target audiences can smoothly and quickly interact online in both desktop and mobile, as well as in person, for a seamless experience that pushes them consistently and naturally toward closing a sale.

Supply Helpful Customer Service

The field of customer service is one of the most memorable interactions between your business and its customers. Customer service can include free shipping on items, customer loyalty rewards programs, return policies, promotional offers and customer support with issues concerning a product. According to research from Harris Interactive, 62% of U.S. consumers have switched brands in the past year due to a poor customer service experience. Good customer service not only reinforces to clients that your company cares about them, but prevents one of the biggest reasons for customer drop-off.

No matter the industry, customer service plays a crucial role in representing your brand in what are often the most decision-influencing interactions in any customer journey. Successfully demonstrating your dependability during these times can have a major positive effect on customer loyalty.

Distinguishing Your Brand Identity

Customers will tie your brand to the customer experience you provide. Should you offer a great experience, customers will attach positive feelings to your brand, but provide poor experiences and these failings will be tied to the brand instead. As such, it’s crucial that customer experiences align with your company’s larger goals so that good experiences not only gives clients a positive memory, but improve your brand’s standing in the public consciousness. For example, Amazon Dash buttons, which allow customers to reorder a product with the single push of a button, distinctly feature the brand of the company. In doing so, customers tie the brand to the simple, successful and satisfying experience they have had in using the button.

Forrester’s Customer Experience Index has found that a customer’s emotional connection with a brand has some of the strongest influence on loyalty. Cultivating that emotional connection and making it a positive one will yield short- and long-term loyalty in an age that has more competitors than ever before. In a sea of products and services from more brands than ever, having a positive emotional tie will help your brand distinguish itself from the crowd and feel less replaceable to clients.

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