6 ways to build a loyal customer base
6 ways to build a loyal customer base
By Alex Dodgshon

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6 ways to build a loyal customer base

TAGS:  Building Business Value, Business Exit Strategies, customer loyalty, Maximising a Business Sale Price, Scaleable Business, Value Builder Methodology

“In business, I look for economic castles protected by unbreachable moats”

– Warren Buffett

Buffett describes an attractive business investment as a castle with an impenetrable moat of protection. To be a viable proposition, a business needs solid foundations and a strong leader. It also needs differentiators which make it stand out from the crowd and make loyal customers who want to return, no matter how hard competitors try to lure them away.

In this blog we will be looking at 6 strategies to build customer loyalty, and in turn increase business security and business value.

1 Showcase your expertise

What certifications or accreditations do you have that could help you stand out from the crowd? In sectors such as professional services some qualifications are expected as standard. The trick is to identify which other endorsements make your business, unique and how these add value to your customers.

Let’s say you run a decorating business. Having qualifications such as City & Guilds and NVQs demonstrate your skills and expertise and may set you apart from your competitors. Professional accreditations build confidence, trust and respect for your brand, helping customers to choose you over another company.

Being the only business with certain expertise in a sector can create a real niche for your business and act has a barrier to other companies thinking of entering the market.

2 Create super fans

Delighted customers will stick by you through thick and thin. Loyalty takes time and dedication to build, but once those loyal customers are hooked, they could become super fans. Loyal super fans are a huge business asset. They will shout about your business and recommend you to their friends, family and associates.

Apple is a classic example of a super fan brand. In the run-up to every new product launch Apple’s dedicated fans help to ramp up the excitement around it. Once the product launches, they scrabble to get their hands on the new ‘must-have’ device, boasting about its features and benefits to their friends. It was similar with every new Harry Potter book launch.

Brands like Apple have to work hard to retain their super fans through high levels of customer service, reliability and support. Are you doing everything possible to build and retain a loyal customer base?

3 Make your product or service indispensable

Find a way to integrate your product or service into your customers’ daily lives so they cannot imagine their world without it. Make buying from you so easy that it’s too much effort to switch to a competitor.

When you introduce a CRM system into your business, you begin to customise procedures, design reports and train your team. Once the software is embedded, the extent of personalisation makes teams reluctant to change systems. This effectively builds a barrier to competitors.

Expanding into other complementary products or services is known as vertical integration. Amazon started out selling books, but now they are a publisher and a technology provider. Apple bought the company that makes the fingerprint recognition tech used in their phones and now control its supply. Royal Mail is now an end-to-end provider of parcel collection and delivery to your home. All three of these brands are indispensable to their customers in their own way.

4 Become a Verb

Did you ‘Google’ to find this blog? Do you prefer to jump on a ‘Zoom’ or ‘Teams’ call? Can you remember the last time you vacuumed instead of ‘hoovered’? Us neither!

These companies have a competitive advantage because their names have become verbs in everyday use. Every time we refer to hoovering or googling, we reinforce the trusted status of those brands.

Like Velcro, Tupperware, Biro and Jacuzzi, is there a way to control the words people use to refer to your business, product or service? Does your company or brand name have potential to become synonymous with conversations around what you sell?

5 Create a Unique Selling Point (USP)

Having a unique product or service gives you a USP, but that will only last as long as it takes a competitor to replicate it. The most valuable businesses are constantly looking to innovate and create USPs to engage their customers and keep them loyal.

Subscription models like those offered by the Dollar Shave Club and Harry’s offer an alternative to expensive razor blade refills. Customers that sign up become loyal in the knowledge they are getting a great deal.

Closer to home, a local joinery business guarantees ‘no mess’ services. If their joiners don’t leave your property in as clean a condition as they found it when a job is done, they will send a team of professional cleaners to clean it for free. Their employees know the standards expected of them and customers feel more confident choosing their services.

6 Price

Customers are willing to pay more for a clear point of difference or added value. For example, people are willing to pay more when shopping at Waitrose than Asda, and expect to pay more for a BMW than for a Kia. Could price become your differentiator?

In certain sectors, being the cheapest on price could be your USP. Selling high volumes at a low price can grow your business turnover very quickly, but it can also impact on profits. Try to look for alternative, more profitable routes to market.

Why are loyal customers important?

Every business dreams of having a monopoly, yet very few do. Competitors are always looking for ways to lure your precious customers away. To make it difficult you can build loyal customers by following these six strategies. Building a loyal customer base builds consistent turnover, which helps with cashflow and feeds into profits.

When assessing a business for sale, buyers look at past performance and future profit forecasts. A loyal customer base adds value and tends to attract more interested buyers, which may lead to achieving a higher sale price.

If you plan to sell your business in the future, you need to build a strong business that people like Warren Buffett want to own. Building and protecting your customer base is one way to do this. Speak to us for advice on building value in your business – book a discovery call or contact us here.

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