Building True Customer Loyalty

February 2nd, 2016
Steven Howard

You Have to Build and Earn True Customer Loyalty

An interesting phenomena that we see in the world of marketing today is that companies are switching from a transaction perspective to a loyalty-building perspective….at least when it comes to their best (and most profitable) customers.

There are only three ways to grow your business….and it doesn’t matter what business you are in. You can either:

  1. Increase the number of your customers.
  2. Persuade your current customers to buy in larger volumes.
  3. Encourage your current customers to buy more often from you.

So, as you can see….two of the three ways to grow your business….any business….is to concentrate on your current customer base. And, for many businesses, increasing the number of customers also requires a focus on the current customer base as a large percentage of new customers is often generated through referrals made by your current customers.

This means making a dedicated effort to focus on your current customers — and to develop relationship marketing programs, particularly with your key customers — is more important than ever.

By relationship marketing, I don’t mean the tactical “loyalty points” programs we see so often in today’s markets. While these are very good tactical campaigns, the various bonus points schemes that banks, retailers, restaurants, and others use for their loyalty building programs are often no more successful in building long-term customer loyalty than lucky draw promotions.

I remember when a bank in Singapore conducted a Lucky Draw competition for deposit customers with the grand prize being a beautiful new Jaguar automobile. The winner, when asked by a local newspaper if winning this luxury car would make him loyal to the bank providing the prize, replied “No, there’s a new promotion at this other bank, so I’m going to try my luck over there now.”

It’s pretty obvious to me that if you cannot buy customer loyalty by giving away a Jaguar car, then you simply cannot buy loyalty.

If you want true customer loyalty you have to build it, earn it, and reward it before you can keep customers truly loyal.

This is the essence of what we call Customer Retention Marketing.

Elsewhere in the Keeping Good Customers Blog we give you tips on how to build customer loyalty….how to earn customer loyalty….how to reward customer loyalty….and how to keep customers loyal. Search the Customer Loyalty, Customer Retention, and Customer Retention Marketing categories on the right to discover these tips.

And please feel free to add your own ideas and tips in the comments box below.

Key Point: true customer loyalty has to be built, earned, and rewarded before customers become truly loyal.

Taking Action: are you and your competitors locked into a series of “promotional wars” with competition down to the best loyalty points scheme?

Are your efforts at loyalty building based on the benefits of your products and services, or based on what types of rewards and freebies you give away?

How easy would it be for a competitor to better your rewards program?

What can your organization do to build and earn customer loyalty? How can your relationship marketing programs be designed around customer needs, especially recurring needs?


This article is partially excerpted from our book Powerful Marketing Memos, available at Amazon in paperback and Kindle formats.

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