You’ve launched a new product. And while most of the market is still teetering on the edge, deciding whether to hop on and buy or wait for reviews, it’s your most loyal customers who take the plunge first.
Luckily for you, they trust you, and are willing to bet on you. Having had numerous great experiences with your brand, they trust that the new product you just launched will meet those standards.
Your customer retention rate is likely the most important metric you’re tracking. It gives you a glimpse into how your customers feel about you. A high rate means that the customers you win over, stay with you in the long run.
These are the customers who come back time and again, promote you among their social circle, and are the unofficial brand champions.
They are the customers who add a lot more value to your brand – making them your most valuable asset.
In reality, of course, brand loyalty has little to do with luck, and a lot to do with the work you put in.
How can you inspire loyalty?
Who doesn’t want loyal customers? But the big question arises – how can you inspire loyalty? Do you simply create a good product and hope for the best? Or is there something more to be done?
Good news: Psychology says there is plenty you can do! Here are a few things you can keep in mind to inspire loyalty:
1. Value Your Customers
Remember Maslow’s Hierarchy of Needs? It states that after our basic psychological and safety needs are met, we seek out love, belonging, esteem, and self-actualization.
All that means is, your customers are looking to belong. They are looking to feel valued, and respected, and like they are a part of something.
In order to ensure you deliver, you can create a community around your product. Build forums, facilitate discussions, and help your customers feel like they are a part of the community.
Next, ensure they feel valued and respected. Ensure that their concerns are immediately heard, recognize their contributions with rewards or appreciation, and ensure that you show them that they are a valuable part of your business.
2. The Halo Effect
First impressions really matter. As it turns out, how your customers first perceive you is likely going to be a lasting impression that colors many of their interactions to come with your brand.
No pressure, right?
But what this also means is that getting your first impression right will help you in many other ways. As it turns out, once customers think your brand is great, they associate this feeling with everything you do – even if it’s something they haven’t personally purchased!
This Halo Effect – wherein everything you do is colored by the halo of your customers’ perceptions – is what makes your customers jump on to new product launches. Bring on those rose-colored glasses!
3. The Reciprocity Effect
We feel the need to react positively to positive experiences. In short, we are hard-wired to give back. The Reciprocity Effect comes into play especially in customer experience. By creating positive experiences that go the extra mile, your customers will want to “return the favor”, and perhaps spread the word, make additional purchases, or something else entirely.
In short, positivity breeds positivity.
4. The Endowment Effect
Have you ever noticed that things feel a lot more valuable when you own them than when you’re just browsing? This is called the Endowment Effect, and it’s the reason why it’s so difficult to get loyal customers to switch brands. Customers feel a sense of ownership to the brands they are loyal to, and that’s what makes all the difference.
But how can you ensure your customers feel a sense of ownership in your brand? By including them! Have them be a part of your brand decisions, whether it’s picking the new logo, seeking out feedback (and taking action on it!) and more.
5. Gamify the Experience
Dopamine is a great decision-maker, and one you absolutely want associated with your brand. So, how can you bring in the happy hormone? By gamifying the experience with loyalty rewards.
Rewards programs do just this. They nudge increased loyalty with small incentives and rewards for purchases. It encourages customers to keep coming back for more, while rewarding their loyalty in the process.
6. Minimize Cognitive Dissonance
Once you’ve made a purchase, do you sometimes find yourself wondering whether it was the right call? What if you overspent? What if it’s not worth it? That’s cognitive dissonance.
Holding two conflicting thoughts can feel exhausting, and it’s an important issue to address when it comes to your customers, too.
Minimize this post-purchase dissonance with consistent follow-ups. Focus on improving the post-purchase experience and ensure your customers continue to feel valued.
Ready to get started?
Loyal customers are the secret to a thriving business. Did you know that just a 5% increase in customer retention can lead to over a 25% increase in profits (and sometimes even up to a 95% increase?).
While you can use these psychological tactics to increase loyalty, it’s just a part of the whole puzzle. People are complex, and at the end of the day loyalty is about the whole experience, right from customer acquisition to the consistent efforts made during the customer lifetime.
The first step is actually understanding the customer experience with proactive efforts and feedback. Then you need to identify their expectations to truly deliver experiences that matter to them.
When you keep delivering relevant exceptional experiences time and again, you will see the results in customer feedback and behavior. We should know! At Sogolytics, we have a 97% retention rate – and it’s for exactly this reason. We believe in delivering value time and again, going the extra mile, and building relationships that last.
Ready to put these strategies to use in enhancing customer loyalty? Let’s get started!
