Sales & Marketing

5 top tips for building customer loyalty

10 min read

10 March 2015

Want to deliver a really positive customer experience? A little can go a long way according to recent American Express® research.

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While new customers are great news for small firms, repeat business is essential if your business is to thrive. But how do you encourage customers to keep coming back? Delivering great customer service has a significant role to play, but what does that actually mean in practice?

On the back of its latest Global Customer Service Barometer*, which showed that 68 per cent of UK consumers are willing to spend more with a company they believe provides excellent customer service, American Express has identified six tips to encouraging repeat business and building loyalty. Whether they provide new insights, a refresher or evidence for what you instinctively know, the research based tips are designed to help focus small businesses against their competitors in 2015.

1. Think customer relationship, not transaction

‘Providing excellent customer service’ is ranked second only to providing ‘good value for the price,’ by consumers, when choosing a company with which to do business.

Making customers feel like each purchase or visit is important to you, and much more than a simple transaction, is a great place to start. Businesses that really excel at customer service are experts at actively engaging with an individual, finding out what their purchase is for, identifying whether they need any advice, or even considering their future purchases. 

While some customers might just want to buy something quickly and conveniently, they will be more likely to remember their purchase if they felt valued and that their needs, both immediate and in the future, were considered. Importantly, the research also found that consumers are, on average, willing to part with 14 per cent more money when it comes to companies who provide excellent customer service.

2. A personalised service

Every business knows that the customer is king. But the key to making customers feel that way is by tailoring and adapting the service you offer. Paying attention to their likes and dislikes, remembering regular customers’ names, or even recalling previous conversations all adds to the feeling of personalisation. Rewards or discounts for repeat or bulk purchases are also worth considering. 

According to the American Express research, 21 per cent of consumers said personalisation is the best way a business can stand out. Not only will it help differentiate your business from your competitors, customers who’ve benefitted from a tailored service will feel encouraged to recommend you.

3. Encouragement to spread the word

How often have you dined at a great restaurant and urged a friend to visit? This propensity to recommend positive experiences to friends and family is universal. The research findings showed that on average, consumers tell eight people about their good experiences, either in person or via social media. Significantly, a bad experience reverberates among twice as many.

Both social media and traditional word of mouth can be powerful in influencing the perception of your business among prospective customers you haven’t yet met. Recommendations from friends and family are the key motivator when it comes to encouraging consumers to try doing business with a new company, more important than a sale or promotion, according to the American Express research.

Harnessing the power of recommendations through your businesses’ social channels can be a fruitful way to engage prospects. For starters, encourage satisfied customers to review your business or products, or share promotions or special offers with those that follow you so that they can actively spread the word.

4. Turning all experiences into opportunities 

With six in ten surveyed consumers saying they have been put off buying or revisiting businesses where they had previously received poor service, it’s clear that bad experiences can negatively impact your bottom line. Of course businesses strive to deliver the best service every time, but on rare occasions, this might not be possible. 

Offering a refund might be an obvious thing to do if a customer is dissatisfied with their purchase, but it’s important that the customer also feels that their complaint has been listened to and that their feedback has been taken on board. The way that you respond when resolving issues and complaints can make a big difference to how they feel about your business, and if they feel their complaint has been handled well, they may consider buying from you again, despite a one off negative experience.

5. Recognise the value of your frontline staff

Customers will often form an opinion about a company based on the person they have dealt with the most. According to the Global Customer Service Barometer*, consumers are clear about what they are looking for when it comes to dealing with front line staff, with expertise and authority to make instant decisions, rated highly. If you’re the owner of the business, then you’ll no doubt meet these credentials; however you may not be in a customer facing role every day. 

That’s why it’s important to ensure all of your frontline staff understand your business’ vision and values as well as your product or service. If necessary, consider formal customer service training for them so that they feel totally confident about being the ‘face’ of your business. Empowering staff in this way helps to ensure that customers get a positive, and more importantly, consistent level of service regardless of who they deal with.

6. Go the extra mile

Over-delivering can be achieved by small gestures as well as bigger ones, for example, offering customers a free sample of one of your products as an added extra. Or tracking down and ordering in a particular product you don’t normally stock will make a really positive impression. Even recommending other businesses that can provide a service you don’t, counts. With only five per cent of surveyed consumers saying their customer service experiences, ‘exceed their expectations’ there is an opportunity with the remaining 95 per cent. Being flexible, accommodating and offering rewards for their custom is a great incentive for them to do business with you again.

Overall, meeting or exceeding customer expectations with great service, provides an excellent opportunity to boost customer loyalty and inevitably increase individual customer spending. It’s evident that a little can go a long way – putting customer care at the heart of what you do will be key to benefitting from the ‘domino effect’ of being recommended throughout 2015 and beyond.

If you are a business owner and would like to find out how American Express Platinum and Gold Business Charge Cards could help you manage finances, improve cash flow and stay in control of everyday expenses, whilst earning rewards, visit the site to find out more.

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*The American Express Global Customer Service Barometer was conducted in the UK and nine other countries, exploring consumer attitudes and preferences toward customer service. Research was completed online among a random sample of 1,000 U.K. consumers aged 18+. Interviewing was conducted by Ebiquity during August 2014. Overall, the results have a margin of error of +/- 3.1 per cent at the 95 per cent level of confidence. The same survey methodology was used in the US, Canada, Mexico, Italy, Australia, Japan, Singapore, Hong Kong and India. All statistics referenced in this article are taken from the UK findings for the American Express Global Customer Service Barometer.

American Express Services Europe Limited. Registered Office: Belgrave House, 76 Buckingham Palace Road, London SW1W 9AX. Registered in England and Wales with Company Number 1833139. American Express Services Europe Limited is authorised and regulated by the Financial Conduct Authority (reference number 415532).