Who would say no to landing a new customer in this economy? The answer is, nobody. We all want new customers, new sources of income, and new ways in which we can sustain our businesses, pay salaries and ensure growth.
There again, using conventional means, it costs up to five times as much to land a new client compared to retaining an existing one. In addition, when we consider that the probability of selling to an existing customer is 60% to 70%, while the probability of converting a new prospect is between 5% and 20% , it’s clear that we need more focus on retaining customers and optimising their lifetime value to show real growth.
So, what is it that makes a customer stay with you and ignore competitors all vying for their attention?
A lower price may work for commodity goods, but it is no guarantee of customer loyalty; in fact, competing on price is almost a guarantee that your customer will go elsewhere as soon as the opportunity to save money arises.
The answer lies in your brand. When customers buy into your brand, they are far more likely to stay. This is because a well-defined brand addresses all points of value, not just price and quality. It also focuses on how customers experience the brand and the potential emotional connections that can be created.
Research shows that 89% of companies see customer experience as a key factor in boosting customer loyalty and retention. Moreover, Gartner found that companies that prioritise customer experience generate 60% higher profits than their competitors. The same study says that 80% of your future profits will come from just 20% of your existing customers .
A consistent and distinctive customer experience is often heavily reliant on interpersonal interactions with employees. Therefore, ensuring that your brand culture aligns with your customers’ experience of the brand is critical. This relates back to the full brand lifecycle: your brand culture impacts and energises your employees, who in turn impact and energise your customers, who become brand ambassadors without even thinking about what they are doing because of the holistic brand culture they are invested in.
When your customer experience and brand culture are aligned, you improve your ability to win customer loyalty with intangibles that can’t be copied or easily beaten by lower pricing.
When you consider that an increased customer retention rate of only 5% can boost your profitability by anywhere from 25% up to 90% , customer loyalty becomes a critical aspect of a successful business and the ultimate goal of your brand engineering. And customer loyalty can’t be bought or manufactured, it is only obtained through a consistent, authentic and believable brand culture that stands for and represents the values and ideals your customers hold dear.
 “Leading on the Edge of Chaos”, Emmett C. Murphy and Mark A. Murphy