Most business owners understand the importance of customer loyalty. When customers are loyal to a business, they are more likely to return time and again, refer friends and family members, and provide valuable feedback.
What grows revenue in your company faster—repeat customer loyalty or securing and selling to new customers you haven’t met? The data shows average companies tend to lose 50% of their customers in 5 years and 50% of their employees in 4 years (The Loyalty Effect, Reichheld). What do you think even a slight improvement in client loyalty would do for your revenue?
Prefer to watch a video introduction? This one is 9 minutes long, so buckle up:
Let’s ask another question on the same front. What would help you secure better clients—your best clients advocating for you among their peers, or a marketing team that promotes you to strangers? Even when beginning new marketing campaigns to increase sales, businesses are three times more likely to sell a product to an existing customer than to a new prospect (Marketing Metrics), and ahead of all other trust metrics, 83% say they completely or somewhat trust the recommendations of friends and family (Nielsen).
In this article, we will explore what builds client loyalty. I use the word client interchangeably in this article because in the advisory business it is more appropriate. We will also explore ways to convert existing customers into loyal customers, and then into customer advocates. If you are a financial advisor, then you will be converting loyal clients into client advocates!
When I first sat down with Marty, I was very impressed with his accomplishments. He was a respected commercial developer who specialized in creating residential communities that helped families thrive. He gave great attention to building a unique, family-first environment in each development. His team was committed to promoting a positive culture among tenants and the neighborhoods they were integrating with. So why had he reached out to a business advisor? What was the challenge?
Over a brainstorming session together, I began to understand that the key challenge for his business was not just winning and retaining great tenants--it was also winning and retaining great investors. Aha!
We began to map, step by step, the investor experience with his firm from start to finish. This included how he came to meet potential investors and how they were engaged along the way. Sometimes these relationships took months, if not years, to develop. In this process of review and reflection, we created a list of investors who were already engaged at some level with his development projects. Some were brand new. Some had been around for years. Many had already invested in previous projects. This is where our conversation about client loyalty and client advocacy began to take shape.
One of the weak spots in the investor's experience was a lack of social interaction with his team and with one another. Their team decided to launch a kind of partner appreciation event where all these people could come together and meet one another in a relaxed atmosphere. The decision was made to avoid all manner of pitching or selling. They also decided to avoid the common instinct to turn the event into a financial reporting event. There were going to be no prospectus deliveries.
Instead, we decided to address the thing that was missing most: sharing stories about the heart and meaningfulness of their work together. This focus can lead to an amazing event and amazing results.
Marty prepared stories from his childhood that revealed his own values and what drove him toward these kinds of projects. Other investors were asked to share their stories of how investing in these developments connected to their own life passions. The immediate result was a wonderful series of open conversations and personal stories that the whole group enjoyed. Later on, people would reflect on the event with enthusiasm, and they were very thankful for a time to connect on the stuff that mattered most to them.
The event also focused on the questions the investors were interested in. These questions sounded like: "I wonder how this next project would help me make an impact in the community?" "I wonder if I am part of something that is bigger than just the financial return?"
The final outcome?
The team was able to secure millions of dollars worth of investment for the next project in record time. Old investors were inspired to go even bigger. This immediately increased customer lifetime value.
They introduced new investors they thought would love the mission of their next project. This led to growing new customers.
New investors were able to make decisions much faster. This was a natural byproduct of building better customer relationship. And, in his words, "It was easier than anything we have ever done."
All of this was the result of focusing on the client's experience.
It converted loyal clients into client advocates.
It is not about you.
It has always been about them.
How Do You Build Client Loyalty?
Most people-first businesses rely on client loyalty to succeed. When clients are loyal, they are more likely to return and do business with you again in the future. They may also refer your business to their friends and family. This always leads to the right kind of growth.
There are several things you can do to build client loyalty. First, make sure you provide excellent customer service. Go above and beyond to meet your clients' needs and make them feel valued. Second, be a strong advocate for your clients. Put their needs and passions ahead of your own. Fight for them when they need it, and always have their best interests at heart. Finally, building heart-level connections with your clients is critical. This goes beyond just repetitious advertising. It is certainly more than continual "asks." Keeping them informed about what is going on is sometimes as simple as creating ways to share your stories about what matters most in friendly, social spaces.
Have you put your customer loyalty strategy into a plan? If you can provide these things, your clients will be more likely to stick with you through thick and thin. This is fundamental to customer retention. And that's what it takes to build a successful business - strong client relationships that last.
Benefits of Client loyalty
When it comes to business, customer loyalty is key. If you can keep your customers happy and satisfied, they're more likely to stick with you through thick and thin. Here are some reasons why you should care about customer loyalty:
1. Increased profits - Happy, loyal clients are more likely to spend more money with you. They're also more likely to refer you to their friends and family, which can result in even more business for you. This leads to new customers. This, in essence, is a native referral program.
2. Improved customer service - When existing customers are loyal, they're more likely to give you feedback and suggestions on how to improve your customer service. This can help you provide a better experience for all of your clients.
3. Brand recognition - When clients are loyal to your business, they're more likely to recommend your products or services to others. Customer loyalty is brand loyalty. Brand loyalty is the goal of brand recognition, and it will increase your market share over time.
4. Improved employee satisfaction - When employees know that their company really values client loyalty, they're more likely to be motivated and satisfied at work. This can lead to improved productivity and lower employee turnover rates.
So as you see, there are many benefits to prioritizing client loyalty in your business dealings. By providing excellent customer service and being a strong advocate for your clients, you can create lasting relationships that are beneficial for both parties involved.
Building an Encouraging Environment in your Team First
Creating an environment that encourages brand loyalty and customer advocacy can be a challenge, but it's important to remember the basics. First, you have to get your team on board. Make sure all of your employees have clear instructions and expectations around creating great client experience. This is not just the job of marketing teams. This will help them provide the best possible service to clients.
Second, offer adequate training. Employees need to be familiar with your company's policies and procedures to provide the best possible service. Learning to listen and be responsive to your best clients is not just a job for the empathetic rock stars in your company. This stuff belongs in your SOP's, your Standard Operating Procedures. These are written down, repeatable actions that everyone can follow.
Third, empower employees to make decisions that will benefit the customer. When employees feel as if they have control over their work, they are more likely to go the extra mile for clients.
Finally, appreciate and value employees. Some of your best loyalty-building tools are going to come from your team. They must be encouraged to share their ideas. A rewards program can be initiated to reward loyal customers and loyal team members. When employees feel appreciated, they are more likely to want to do their best for the company. This activates every department toward functioning as customer success teams.
It's no secret that happy employees lead to happy customers. When your business values its employees, it shows. When customers walk into a business, they can sense whether or not the employees are engaged and appreciated. If they are, the business is more likely to receive repeat business and referrals to new customers. If not, the business will likely see higher turnover rates because it will not be able to retain customers.
There are many ways to show appreciation for employees, but some of the most effective include providing recognition, offering incentives and investing in training. Recognizing employees for their hard work is a great way to show them that their efforts are valued. Incentives can also be a powerful tool, motivating employees to go above and beyond for clients. Finally, investing in training shows employees that you are committed to their development and growth.
By showing appreciation for employees and rewarding customers for their loyalty, businesses can create an environment that encourages advocacy and repeat business. When done right, these practices lead to happy employees and customers who are more likely to support the overall vision of your firm.
Rewarding Repetition: How to Keep Your Clients Coming Back
Rewarding clients for their loyalty is a great way to show your appreciation. Rewards are a basic part of any loyalty program. There are many different ways you can reward clients, from providing exclusive access to new products or services to offering discounts or special deals. Whatever method you choose, make sure it is something your clients will appreciate and will encourage them to continue supporting your business. Some of the best ways include providing exclusive access to new products or services, offering discounts or special deals, and sending thank you notes or gifts.
Whatever method you choose, make sure it is something your clients will appreciate and that will encourage them to continue supporting your business. These things must connect with their goals and their passions. It should connect to the problems they are trying to solve.
Thankfulness is Your Secret Weapon
Thanking your clients for their business is just good business sense. It's a way of showing your appreciation for their support and letting them know that you value their business. When you take the time to show your appreciation, you're more likely to build strong, long-lasting relationships with your clients. And, of course, those relationships are what keep them coming back.
Saying "thank you" is always a good place to start. A handwritten thank you note or a small gift can go a long way toward showing your appreciation. This reminds me that we all have to ask for customer feedback. Surveys are a great way to receive customer feedback, but sometimes it is best received through personal interaction.
When you reward your clients for their loyalty, you're showing your appreciation for their business and building strong relationships with them. It's a win-win for everyone involved, and it's sure to keep your clients coming back for more and spending more money in your company. One of the best ways to measure customer loyalty is by tracking the increase in customer lifetime value. Collecting customer data is business fundamental, but many of us find it tedious. This kind of measurement, however, is something everyone can get excited about and take pride in.
Secrets to Keeping Your Customers Satisfied
There are a few key things business owners can do to prevent their clients from becoming disloyal or unhappy with their products or services. First and foremost, it is important to always deliver on your promises. If you say you’re going to do something, make sure you do it. Otherwise, you will quickly lose the trust of your clients.
Another important thing to keep in mind is customer service. Make sure you are responsive to any questions or concerns your clients have and address them as quickly as possible. Furthermore, always aim to exceed your clients’ expectations. Go the extra mile to provide excellent service and products, and they will be more likely to stick with you in the long run.
Finally, it’s important to stay up-to-date with the latest trends and technologies in your industry. If you can keep your business fresh and innovative, your clients will be more likely to stick around. By following these tips, business owners can ensure that their customers remain satisfied and loyal for years to come.
How Do They Become Client Advocates?
Client advocates are customers who are so satisfied with a product or service that they actively promote it to others. Aha! Now we are getting to the punchline of this article.
Have you noticed that many of your most thankful customers have not yet referred any significant business to you? Is asking for referrals still an awkward moment for you and your team? Let me share with you three key steps to converting loyal clients into client advocates:
Celebrate Your Clients.
Go above and beyond to reward your clients for their business with you. There are many different points along the client journey for you to reward and celebrate your clients. Everyone wants to know they have value beyond just the exchange of goods and services. Your clients must become more than customers. This is one great way to accomplish client appreciation. Here are some things you could implement, and I challenge you to implement one this month.
After your first meaningful meeting together, send them a personal, handwritten card. This really doesn't take that much time, and it can mean a ton. Pick up some simple stationery that fits your style. Don't worry about printing custom stuff to begin with. Just keep it short and very personal. Be thankful for them. Point out one thing you enjoyed about them. Hand-write the address. Lick a stamp. Mail it.
I have a friend who called me to tell me he had received a personal card from the leader of the firm I was working with. He was blown away that "a guy that busy would take the time." It meant a lot to him personally, and it convinced him to do business with us.
Bring champagne to your closing event. I hope closing for you is a real celebration. Sometimes people don't even know when their contract is complete. If you don't celebrate the delivery of your valuable services, they may miss it. You can't afford to have them miss it. In order to underline the valuable service you have provided, set a date on the calendar to celebrate delivery. If you are in person, you can open a special beverage together. If you are not in the same city, you could mail them the beverage to enjoy when you open it together over video conference. Be prepared to make a toast. Say some nice things about your work together. Ask them to toast to something they enjoyed most about your work together. When people practice complimenting you, they are also practicing advocating for you. This language is important. Make sure you highlight their compliments so that they know they have permission to repeat them!
Consider hosting special social events for your clients of similar interest or geographical location. I have participated in special events that were hosted on video conferencing. Celebrate a season. Celebrate a birthday of a client. Celebrate a milestone in your firm's advancement. Come up with anything. When you are together keep the atmosphere fun and casual. As in our example earlier in this article, there is great benefit to simply allowing great people to spend time together. If you are smart enough to host the event, enough may have already been said about you. Make the event about them. Defer. Appreciate. Take note. Admire. Avoid all manner of selling or personal promotion. Your clients will love it, and they will consider themselves part of your circle that extends beyond your business together.
These kinds of thoughtful celebrations will increase customer loyalty. Of course, it will increase future purchases, but it will also encourage customers to refer more customers to you in the future. Happy customers are the individual components of your loyal customer base.
Elevate Your Clients.
It is time for your customers to be experts. After all, you have been the expert for most of their business with you. This is especially true if they came to you for your strategic wisdom. It is time to reset your relationship. It is time to let them become experts, too.
Find out what your clients are great at. Find a way to ask them about it. Ask for their wisdom. Get their advice. Did you know it is OK to talk about challenges you have in your business? If your clients are business owners, they will enjoy sharing their experiences with you. Are your clients older than you? They would love to be asked to share their wisdom across a host of subjects like marriage, leadership, parenting, success, failure, and education. These conversations allow your clients to come up to your level and be considered at least peers if not veterans in areas you may not be as strong.
Be sure to take notes on these kinds of engagements. What you learn should go into your CRM and be part of your relationship building. You can't afford to forget what your clients are excited about. Nor would you want to forget their family's names, their favorite sports teams, or a big moment in their lives. Take notes. Find ways to elevate your clients.
Make Referring Easy.
Many loyal clients don't refer because they simply don't know how to. This may seem odd to you, but is common in my experience. In that moment when they think of you and want to refer you, something happens. They pause and ask themselves, "How should I do this? By phone? An email? In-person?" And then, guess what. They don't know so they give up. In seconds, the urge to refer you passed. They may not come back to it again.
Did you notice in this illustration the problem is not first in knowing what to say? It's true. Many of the clients you love already know what they want to say about you, they just don't know the etiquette. They don't know how to do it.
It is OK to encourage customers to know exactly how to refer you.
So, make it easy.
This is a simple tip. Tell your clients exactly how you like to be referred. Of course, some may have their preferences, and that is fine. You can always make room for them to customize the referral method they are most comfortable with. We are not solving for them. We are solving for MOST of your clients who just need to know how you prefer it. What is usual and customary? This might sound like this:
"If you ever want to introduce me to someone, just CC us together in an email. That's the easiest way. If you do that, I will reach out to them right away, and I will be nice. I will take it from there."
"I am sure you have already thought of people who would enjoy our services. When they come to your mind just send us a group text and introduce us. When I reply, I will do so directly so you don't end up on a crazy text thread."
See? Easy. It may shock you how many more referrals you get by simply making the pathway clear and easy. Remember, this will give you more compassion for your clients. You won't feel as though you have to beg them for referrals. If you have done a great job, one worthy of a referral, they are not unwilling to refer you. They just need to know how to.
GROW! GROW! GROW!
Client loyalty is important for business owners. By showing appreciation and gratitude, business owners can encourage their clients to stick around and promote their business to others. There are many different ways to show your appreciation, so find what works best for you and your business. By following these tips, you’ll be well on your way to developing strong, lasting relationships with your clients and seeing those clients become your best advocates. This shows you are interested in the whole customer journey. The result? Your business will grow in the right direction!
This symbol represents Growth From The Center. The stable growth from the roots and trunk of your practice. These are your happy, loyal clients and the stable energy they can create:
There are many things any business owner can do to encourage his or her clients to become advocates. I bet you have more great ideas to boost your customer acquisition and become a rock star at great customer service. Would you share them in the comment section below? I would love to learn from your experience.
H.B. Pasley, Growth Advocate℠
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