THE IMPORTANCE OF BRAND LOYALTY IN A TRICKY ECONOMIC CLIMATE
We’ve all heard of the 80:20 rule. 80 percent of your business comes from 20 percent of your customers. But how many businesses really take the care to ensure they look after those customers?
It’s easy to get carried away in the drive for new business and to seek new sources of income. But with the current economic climate and constant predictions for more doom and gloom, now is the time to focus on looking after those loyal customers that bring in the bulk of your business.
Did you know that poor customer engagement is reported to cause up to 75% of lost sales, and that loyal customers buy more, and will often pay more for better service? And did you know that a good increase in customer retention can boost profit by up to 100%?
In the past two or three decades, brand loyalty has decreased with today’s average consumer only being around 75-85% as loyal s they were in the 1970’s or 80’s. This decline is resulting from several factors including:
Wider brand / product choice creating higher competition.
Own brand and me too offerings.
With the increase in new media, consumers are barraged with a huge quantity of advertising on a daily basis compared to previous decades.
Today’s consumer is often more savvy in their purchases and will research many similar brands / products.
Information to facilitate this research is much more readily available through the Internet, consumer magazines and national press.
Price competition has increased.
Each of these factors needs to be considered in each company or product’s brand development strategy. `There is no point spending marketing budgets on building new business and brand awareness if on winning that business, customers never repeat their business with you.
To increase brand loyalty and make your brand or product number once choice repeatedly is a difficult thing. Loyalty schemes are by far the most effective way of making your brand or product, number once choice, securing repeat purchases.
To help secure a businesses future through a difficult economic climate businesses should look at their best customers and how they can secure repeat custom from these. If you can hold onto these customers through economic uncertainty, your core business can remain largely unaffected.
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