We all know that loyal customers are better than non-returning customers.
But how do you earn customer loyalty?
What are the principles of customer loyalty?
1. Positioning – communicate your brand values clearly and strongly
This sounds good in the abstract, and it makes sense for giant companies like Apple and Harley-Davidson. But what if you’re just a small mom-and-pop store?
It’s still very important. A customer walking past your store should be able to tell, in an instant, what your business is “about”.
You might be selling ice cream, coffee, or even groceries. But what kind of grocery store is it?
Is it a place that’s cheaper than everywhere else? Does it have the best service? Does it have the most pleasant shopping experience? The most helpful staff?
You don’t need to be perfect in every area – and you shouldn’t try to be. Rather, you should figure out what exactly you’re about, and communicate that as effectively and consistently as you can.
You’ll earn loyalty from the specific type of customer who’s looking for your specific type of store. So be clear about what that is.
2. Trust – be consistent and reliable
Lots of people know that they can get better coffee somewhere other than Starbucks, and better food somewhere other than McDonald’s – and yet they patronize those places over and over again. Why? Because it’s consistent and reliable. You know that a Frappucino or a Big Mac is going to taste and cost pretty much the same, wherever in the world you buy it.
As consumers, we’re all overwhelmed with information every single day. We have too many decisions to make about too many things. And so we often satisfice by going with what we know is “good enough”.
One simple and effective way to reassure would-be patrons and earn their confidence is by having a return policy. If you’re an F&B outlet, this could come in the form of a “We’ll make your drink/dish again, no questions asked” policy.
3. Surprise – delight your customers whenever you get the chance
Everybody loves free stuff. And we love it even more when it’s unexpected.
(Of course, sometimes you’re going to get truly unreasonable customers. You don’t want those people to come back. Still, be firm and polite. In the Facebook era, every small business has a chance of being thrown into the media frenzy of international news because of a customer feedback issue.)
4. Treat them well when things go wrong
Lifelong customers can switch loyalties when something bad happens, and then the response is fudged. You do want to minimize the odds of bad things happening (especially catastrophically bad stuff like food safety, faulty products and so on). But you also need to know that something will inevitably go wrong, and some of your customers will be disappointed. One of your crew is going to spill a drink on a customer. You need to be prepared for this.
Make it up to them. Be sincere in your apology. Give them free stuff, and not a derisory amount (like a 10% coupon or something). It might seem costly in the moment, but the positive word-of-mouth you’ll get from this sort of thing is very worth it.
5. Keep your employees happy
Unless your brand is all about grumpy staff, you’ll want to keep your staff happy. They are the stewards of your brand.
Zappos is one of the famous examples of a brand that’s known to delight its own employees. Virgin is another.
“It should go without saying, if the person who works at your company is 100 percent proud of the brand and you give them the tools to do a good job and they are treated well, they’re going to be happy.” – Richard Branson, to Inc
6. Build a community
Every great brand has a loyal following, and that following becomes a community.
Host little events in your business space, if you can. I’m particularly partial to live music. Lululemon turns some of its stores into yoga studios after hours.
Here are some of the most popular ones we’ve found.
1. La Caféothèque de Paris
Not just about atmosphere (which you can get everywhere in Paris, because it’s… Paris), La Caféothèque has an incredible collection of beans from all over the world.
2. Cafe Tortoni, Buenos Aires
Cafe Tortoni is Argentina’s oldest cafe, opened in 1858. The specialty is chocolate con churros, crunchy fried dough dipped into thick hot chocolate. And apparently they have live tango from time to time!
3. To keep track of todo lists and general information – Trello
4. Also for tracking projects – Asana
5. Google Apps – for shared calendars and timesheets
6. QuoteWerks – make impressive-looking customized quotes and invoices
7. Dialpad – $20 a month for business lines to avoid mixing up work with your personal line
8. Mailchimp – for email newsletters and drip campaigns
9. Streak – CRM in your Gmail inbox
11. Candybar Loyalty (that’s us!)
Ever tried running a loyalty program? In the past, you had to do this with loyalty punch cards. This is often a tedious process – we’ve heard from our retailers that they spend too much money paying for the printing of the cards, and that customers get frustrated when they realize they’ve misplaced or forgotten their cards.
That’s why we made CandyBar – a modern loyalty program app for small businesses. No download necessary.
Hiring and managing employees is one of the hairiest, most frustrating parts of being a small business owner. But it can also be one of the most fulfilling things, if you do it right. So let’s talk about it.
“Great employees are not born, they are developed in a business atmosphere where training is stressed, individuality is encouraged and personalities are respected. Word travels about the work environment in all sizes of stores. The key to recruiting quality employees is promoting and possessing a positive work environment no matter how large or small you are.” – Anne M. Obarski, customer service expert
1. Hire with purpose
You’re busy, but you cannot afford to be vague when it comes to hiring employees. You’re asking somebody to spend their time working for you – you want to make sure that it’s worthwhile for everybody involved.
Before you even hire someone, be clear about what exactly the job is. What are you going to be hiring people to do? What tasks need to get done? What are the specific demands of the job? What are the commitments and obligations? What are the expectations?
Hiring is something you never want to compromise on, if you can. In particular, you want to make sure that whoever you hire fits well in the culture of your company. An unskilled worker can be trained, but one with a poor attitude will be toxic for the rest of your working environment.
2. Make training a priority
Once you’ve hired somebody decent, you can kick back and let them run the show, right?
Of course not.
It’s unlikely that you’re going to find somebody who’s able to perfectly perform all of the tasks that you require of them. Anybody who’s so amazingly qualified for your role is probably looking for something bigger and better.
So you’re going to have to train them. You need to spend time and energy coaching your employees to get better at their jobs. As a minimum, you should have an ‘onboarding’ process where you walk them through everything they’ll have to do.
3. Keep your staff motivated
Once you have employees, your business now becomes ‘a place to work’. And whatever your business goals are, you’ll want your business to be a good place to work.
You can vary in terms of how obsessive and particular you want to be about this, but you want to be on the positive side of this. The moment your place becomes a bad place to work, the whole operation begins to get toxic. Your employees are less likely to treat your customers well.
You want to develop a practice of recognizing good work. Thank them when they do things right. Listen to their feedback.
Creating a great work environment is something to be proud about as an end in itself. And it has so many benefits. Employees will want to refer their friends to work at your store. They will treat your customers better.
We’ll be honest. We’ve always felt a little guilty about not allowing customers to cancel a stamp request once they’ve started one. When other apps do this to us, we always have some choice words for them.
So you want to set up a loyalty program for your business. What are the do’s and don’ts?
1. Use Artificial Advancement to motivate customers to keep coming back
As HelpScout pointed out in their blogpost about loyalty programs, studies have shown that artificial advancement encourage people to participate more:
In other words, starting your loyalty program with “3 stickers, 7 to go” is more effective than “1 sticker, 7 to go”.
2. Keep it simple – avoid tedious terms and conditions
One o the most frustrating experiences is to have a loyalty card of some kind, hang on to it for months, and then find out that you can’t use it anymore because of some small-print (or worse, not-in-print) expiry date.
Forte Consultancy pointed out in their blogpost that JetBlue’s TrueBlue program had frequent flier miles that expired within a calendar year – meaning that most program members could never redeem their miles.
You never want your loyalty program to frustrate your customers.
3. Make it as easy as possible to use
This is where modern apps like CandyBar can make a big difference.
Nobody wants to have to scrounge through their bags and wallets looking for physical punchcards, and nobody wants to remember a bunch of extraneous logins and passwords.
With CandyBar, all your customers need to remember is their own phone numbers – and they can get loyalty stickers instantly!
What does this mean for small business owners and marketers?
1. Even if you’re only selling your products and services offline, you have to think about having digital channels.
“The early days of ecommerce were about getting stuff online. Now it’s building brands. We’re seeing things like pop-up stores to capture specific markets, or concept flagship stores merging into the offline. There’s a move from plain ecommerce to brand building.” – Michiel Kotting, Accel VC
People are going to look for your business on Google, Facebook and Instagram before heading down to your retail venue.
2. It’s better to get the basics right across the major channels, rather than spend tonnes of resources over-optimizing a single channel.
If somebody offers to build an elaborate website for your little shop for thousands of dollars, run away!
3. Don’t overextend yourself though – it does make sense to still have one primary channel.
You want to go to where your customers are.
If you’re selling food, you’re going to do well on Facebook and Instagram. If you’re selling fashion, Instagram and Pinterest will likely be your mainstays. If you’re a roving food truck, Twitter can come in handy.
So focus on getting reviews from your customers. Share your menu, your opening hours, and all of the details that your customers want.
“As consumers become increasingly channel agnostic, retailers need to ensure content seamlessly follows consumers on their cross-channel journey – providing the right information and incentives to maximize the purchase decision-making process at each and every point.” – Crsten Thoma, Hybris COO
Of course, at the end of the day, your business fundamentals are what matters most.
You don’t need an elaborate Instagram strategy, but it makes sense to have a hashtag so that your customers can tag themselves enjoying your product.
You don’t need to post on Facebook everyday. but it makes sense to post your opening hours and some basic information on a Facebook page. (And login to that page on your phone so that you can reply to any customers who might message you!)
Entrepreneurs are fundamentally optimistic people who believe that they can succeed where others have failed. This is a useful trait to have when building a business. But it can also be a liability if you’re not careful.
The challenge is to ground your optimism in reality.
Lesson: Do your market research before your take the leap. Before you put down the payment for rent, make sure that ordinary people are eager and willing to pay for the product that you’re selling.
2. Mismanaging finances: running out of money = death
Kongō Gumi, a Japanese construction company, was once the oldest business of all time, dating back to the year 578. It had a good run for over 1,400 years, but ultimately failed because… it ran out of money.
Finances are the lifeblood of every business, both big and small. If you have money, you’re still in the game and you can play another round. If you don’t, you’re out.
Lesson: Never let yourself get sloppy about money. You want to make sure that you’re always able to make payroll for your team.
3. Lack of marketing – a great product that nobody knows or cares about
Sometimes professional craftsmen start up small businesses because they know they’re really good at making what they make – whether it’s a great meal or a beautiful product.
But when opening day comes, hardly anybody knows about the store. There’s barely any walk-in traffic. Nobody knows about the business, and so it flounders.
Have you ever heard of Contour? It was a strong competitor of GoPro’s, even getting better reviews from serious enthusiasts.
Lesson: No matter how good you are, you want to make sure that you’re telling people about your business. Build up some hype before you even launch your business. Talk to the press. Talk to influencers.
4. An underwhelming customer experience – if your customers aren’t happy, your bottom line won’t be either
Lots of things have been digitized and automated, making it easier than ever to run many different parts of a small business out of your phone.
But if there’s one thing that’s still unchanged for thousands of years, it’s the fundamental nature of customer service.
The absolute best of the best might be able to get away with being gruff and unpleasant towards their customers (think Seinfeld’s No Soup For You!), but normal people are going to have to make good service a part of their business offering.
Nobody really thinks that Starbucks serves incredible coffee. They go there because they have an expectation of a reliable threshold of service and consistency.