It’s well known that retaining customers is an extremely cost-effective strategy for businesses. After all, acquiring a new customer can cost five times more than retaining an existing customer. But how do you find and obtain customers who will remain loyal to your business and continue to purchase your offerings for years to come?

There are two parts to retaining customers. First, find the right type of customers—the ones most likely to continue supporting your business for the long term. Then, connect with them to secure their loyalty.

In this guide, we’ll discuss how you can effectively implement these two steps to create a loyal customer base that will continuously support your business. This process will help boost your revenue, allowing you to expand and secure your company’s future.

1. Analyze your current loyal customers.

If you’ve run your business for an extended period, you likely have customers who have made multiple purchases and show no signs of stopping. Start by analyzing their data to gain more insights into your most loyal customers. Take a look at information such as:

• Demographics
• Purchase history
• Interactions
• Communication preferences
• Interests and desires

If you have dedicated business software, you may already have access to a database containing this customer information. However, if your data is incomplete, consider conducting a data append to get a more complete picture of your customers.

With this information, construct customer personas to help you create marketing materials that resonate with current and potential customers. Include the information above, and describe why your business’s products or services address the persona’s needs.

You may also consider customer profiling to discover more trends in your customer data, ensuring the personas you create are accurate and reliable. A robust solution will also help you predict marketing outcomes, further optimizing your promotional efforts.

2. Build stronger customer relationships.

After you’ve developed personas for loyal customers, it’s time to start focusing on building stronger customer relationships. While not every individual you interact with will become a repeat customer, it’s still valuable to create strong connections. After all, customers who are impressed with your company will be more likely to speak positively about it to their peers, effectively promoting your offerings through word of mouth.

To strengthen customer relationships, your business should:

• Provide excellent customer service. Start with the basics, such as ensuring any goods or services you provide are of excellent quality. If you have a brick-and-mortar store, train staff members to be friendly, professional, and helpful.
• Communicate with customers regularly. According to MassageBook, customers should have multiple touchpoints with businesses through various marketing channels. Don’t be afraid to ask customers to participate in your digital marketing efforts by signing up for your email newsletter, following your social media accounts, and opting in to text notifications.
• Engage with customers beyond transactions. Although your relationships with your customers are fairly transactional, it’s crucial to connect with them beyond transactions to secure their loyalty. This could mean inviting them to special events, sending them behind-the-scenes videos of you creating your products, or sharing tips for using your products or services. eCardwidget even recommends giving small gifts to your customers to show your appreciation for their business.

Additionally, personalize your outreach to ensure you’re creating relevant, customized experiences for your customers. For example, you could send them marketing messages through their preferred marketing channels, let them know about new products or services, or share details about an event you’re hosting in their local area.

3. Reward loyalty with programs.

The best way to encourage customer loyalty is to incentivize them to give you their repeat business. That means incorporating some type of loyalty program into your business, such as a:

• Points-based program. With this type of program, customers will earn points for every purchase they make. They can then trade these points for discounts or rewards. Frequent flyer programs and hotel loyalty programs commonly follow this format.
• Tiered program. Based on their spending or engagement levels, customers will belong to different tiers or levels. Customers in higher tiers will receive more valuable rewards or perks. Ulta Beauty Rewards is a great example of this program. 
• Punch card program. For every purchase a customer makes at your business, they’ll receive a stamp or a punch on a physical card. After accumulating a certain number of punches—usually 10—the customer will receive a discount or free product.
• Referral program. In these programs, customers earn rewards or discounts for referring their peers to your business. Typically, they’ll receive their perk when the referred individual makes a purchase. The referred individual will also receive a discount as an incentive.
• Memberships. Businesses that offer services or products that often require regular purchases may offer memberships to their customers. In exchange for a recurring, upfront financial commitment—usually monthly—customers will receive a set number of services or goods. For example, a massage business might offer monthly memberships that include services at a discounted massage billing rate.

Common rewards that customers earn from loyalty programs include discounts, free products or services, access to exclusive offers, and VIP treatment. With the right combination of program and rewards, you’ll have no trouble securing repeat business from your audience.

4. Ask for customer feedback.

If you’ve tried all these strategies but still aren’t seeing a rise in loyal customers, then it’s time to go directly to the source. It’s always valuable to ask your audience for their feedback—organizations send out member surveys and feedback forms. Your business should feel empowered to ask customers for their insights.

Start by sending out a survey containing the following questions:

• How would you rate your overall experience with our product/service?
• What aspects of our product/service do you find most valuable?
• Did you encounter any difficulties using our product/service? If so, please specify.
• Do you feel that our product/service is worth the money you spent? Why or why not?
• Would you recommend our product/service to others? Why or why not?
• Are there any additional features or services you would like to see from our business?
• How likely are you to purchase from us again in the future?
• How can we improve our products/services to meet your needs?
• Do you have any other suggestions or feedback from us?

Based on the information you glean from your feedback surveys, you can tailor your products or services to better fit your customers’ expectations and needs. This will not only improve your offerings, but it will also foster goodwill with your audience, improve brand loyalty, and increase repeat business.

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 Loyal customers are extremely valuable to companies worldwide; increasing customer retention by 5% can increase business profits by upwards of 25%. While securing that loyalty requires a well-executed strategy, with dedicated data solutions and thoughtful planning, your business will be well-positioned to retain the customers you need to maximize profitability and pave the way for future growth and expansion.