If you’ve been a long-time reader of our blog, or even have a slight idea of what we here at Fivestars do, then you should know that we like helping small businesses build customer loyalty. Scratch that, we don’t just like it – we love it. We know it’s much easier (and profitable!) to keep an existing customer happy than it is to be constantly searching for new ones. But don’t take it from us, take it from the folks over at The New Web…

Focus On Customer Retention Over Acquisition

Via The Next Web: According to the 2014 B2C Content Marketing Benchmarks, Budgets, and Trends (North America), 34% of businesses this year will increase their spending on looking for new leads and acquiring new customers, while 18% of businesses will instead focus on customer retention (47% will keep their previous balance). However, the quest for customer acquisition is often a difficult one: after all the advertising, 80% of cases result in only one purchase. This means that all the efforts and money you spend in finding new customers must be constantly upheld in order to maintain a steady stream of business. To us, that just sounds like too much… Luckily, retention marketing is a lot easier – and cost effective!

Take luxury online fashion retailer Luisaviaroma for instance: over the course of three years, the company’s focus on customer retention resulted in some impressive statistics. By sending customers emails containing great incentives to shop, Luisaviaroma was able to increase email open rates by 190%. Better yet, those emails resulted in a 215% increase of online orders. Convinced on the benefits of retention marketing but not sure how to get started? Follow these five tips (you can find in depth explanations in the full article), and you’ll be on your way in no time: gather data from your customers, personalize anything and everything, respond quickly, automate as much as you can, and lastly, don’t be afraid to experiment!

According to the article, loyalty programs can “turn more first time buyers into repeat purchasers, produce more revenue out of buying clients, delay or even prevent customers from churning, and help win back those customers who have dropped off.” Once you’ve set up that fantastic rewards program, however, you need a few tricks up your sleeve to give it that irresistible quality…

5 Ways To Enrich Your Rewards Program And Gain Customer Loyalty

Via Business2Community: People, in general, are fickle – they’re always looking for the next best thing in life. With that being said, how can you stop your customers from running off to another business the moment a slightly better loyalty reward is offered? Offering your customers rewards, after all, can and will cut into your profit because you need to be able to afford those rewards to begin with. The key is to place as much focus as you can on getting to know your customers and giving them exactly what they want. This means having effective communication channels is a must.

So how can you give that extra oomph to your rewards program? The first way is to acknowledge your customers as individuals. This can be as simple as greeting them by name at check out (if you use Fivestars, we have a handy note taking ability in our program to make it easy for you to write down all the unique preferences of your customers). The second way is to target and personalize any communication you have with your customers. An easy way to do this is to understand the customer life cycle and send emails tailored to a customer at each point in the cycle. A third method is a tip mentioned in the previous article: gather customer data. This act is crucial in truly understanding how each and every one of your customers interact with your business and use your products. Fourth, your customers should be given the option to receive communications whenever, however, and about whatever they want. This means your business should be exploring all possible communication channels. Finally, your customers should be able to engage as much (or as little) as they want with your brand without the need for actually being there in-store. You can achieve this just by listing your products and any updates you may have on your website.

Now that you have that amazing customer loyalty program, you’re going to need a way to make sure your customers are in it for the long run. After all, doing business doesn’t mean bribing your customers…

Beyond Customer Loyalty Programs: 7 Ways to Build Lasting Relationships

Via Fast Company: As author Mikkel Svane puts it, “Customer relationships matter more than ever, because your future revenue depends on those relationship lasting well beyond a single transaction.” Sure you can give customers that free 11th cup of coffee, but it won’t mean a thing if the customer doesn’t actually like the coffee or enjoy their interactions with your business. Before the next time you go into work, take a good look at how your establishment has been operating and consider these seven lessons on relationship building.

While the entire list is truly golden (a must-read!), there are three key fundamentals I believe are the most important to keep in mind every single day:

#1. Don’t overestimate your importance in the customer’s life – Just because a person is buying your product, doesn’t mean they are your customer. Remember, “It is a privilege for you to be in their life, not the other way around.”
#3. Recognize the right relationships and adapt – Some customers won’t want you to be their friend. Others are looking for someone who has their back 100%. Although this may take a bit of people reading skills, recognizing the different relationships people want with you and your business will allow you to improve your customer service.
#5. Be transparent – Due to past experiences, some customers will always feel like businesses are constantly trying to make all the money they can off of unsuspecting people. To combat this persistent suspicion, make sure you let the customer know everything they need to know, even if it’s bad. People appreciate honesty.

A great customer loyalty program can be an easy and effective way to build repeat customers. But it can only do so much – in order to have truly loyal relationships, it is extremely important that your loyalty program and interactions are customer-focused and always have the consumer’s best interests at heart.

Have any great examples of astounding customer loyalty? Share with us in the comments below!