How important is brand loyalty? Is it vital to a company’s success or failure? In the minds of your customers, is brand loyalty a driving factor when they buy your products or services? To answer these questions, let’s first talk a little about the benefits of brand loyalty.
Long-term, repeat customers represent a higher ROI for businesses than those who only make a single purchase. This is not to say that new customers aren’t important, because they most definitely are; however, repeat customers not only contribute to an increase in revenue, they can also be one of your best sources of advertising.
Consider the following statistics about repeat customers:
(Statistics provided by http://www.investorsinfeedback.com/index.php/component/k2/item/73)
- A 5% increase in customer retention may increase your profits by as much as 95%
- It costs around 6 – 7 times more to secure a new customer than to simply retain an existing one
- A dissatisfied customer who is handled properly and whose complaints are resolved is actually more likely to remain loyal to a brand and become an advocate of the company than one who has a ‘normal’ experience
- The probability of selling your products to a repeat customer is approximately 60 – 70% whilst the probability of selling your products to a new prospect is around 5-20%
- A mere 2% increase in customer retention has about the same effect as a decrease in costs by 10%
- By increasing customer retention by 10%, a company may experience up to a 30% increase in value
Based on these statistics, we can see that there is indeed value in campaigns that are aimed towards increasing brand loyalty and customer retention. There are many factors that can drive customer loyalty, but we think the following infographic from ClickFox is actually a pretty good representation of those factors.
Image source: http://visual.ly/what-makes-you-loyal-brand