The secret sauce to driving customer loyalty

Running a small business is fraught with challenges. In a challenging economic climate, no business can afford to be complacent, particularly with ongoing supply chain issues, inflation, increasing cost pressures and labour shortages, says Noriyoshi Tsugama, American Express Vice President of Merchant Marketing and Business Insights, Global Merchant & Network Services, APAC.

The most recent Australian Bureau of Statistics’ Business Conditions and Sentiments data found 46 per cent of businesses experienced increases in operating expenses in the month to June, while almost 31 per cent had difficulties finding suitable staff.

I work closely with small businesses as part of my role at American Express, so I know these conditions continue to push many to their limits and, sadly, not all of them will survive.

I’ve been lucky enough to observe some of the secrets to small business success in my role and am excited to share this knowledge.

Why you need to prioritise loyalty

In testing times such as these, boosting customer loyalty should be on every small business owner’s agenda. With the right strategies in place, you’ll increase the chances of customers returning to you repeatedly, rather than turning to a competitor for a similar product.

Prioritising loyalty is a great way to grow your business and offers multiple other benefits – from bringing in new customers thanks to positive reviews and recommendations, to more consistent revenue.

Need another reason to focus on your customer loyalty strategy? Retaining existing customers is often easier than attracting new ones.

Below are a few ways to successfully drive brand loyalty:

Get to know your customers on a personal level

We saw small businesses’ importance to local communities during the pandemic. And your size can work to your advantage when it comes to loyalty.

For one, it’s often easier to speak to customers and get to know them – and they know you – in a way that big businesses simply can’t. Look for opportunities for more personal interactions, remember customers’ names and keep track of their buying habits.

Personalise your customer communications to match preferences and buying history. Host and attend community events and be present on community social groups. By getting to know your customers, you’ll provide a better service and create an emotional connection by showing the human side to your brand.

Find the right partners and learn from each other

Sometimes it’s better not to do everything yourself. Partnerships with complementary brands can create extra value for you and your customers that isn’t possible when working alone.

Tap into your local ecosystem and support other small businesses in your area. This can also be a great way to learn if you take note of best practices. If a business is thriving nearby, it makes sense to understand what they’re doing well or differently.

Networking opportunities are a great way to get started here, so attend what you can – by getting to know your community’s businesspeople and showcasing your great culture, you could also recruit fantastic talent along the way.

Consider what knowledge and know-how are available in the market so you can learn from others and see what could be applied to your business.

Seek out customer feedback

The best businesses are always looking to exceed expectations. Be open to receiving feedback – good and bad – and respond and act on it.

Ask consumers what they think about their interactions with you; it’s the best way to find out how best to meet their needs and turn them into return customers. Don’t just rely on reviews. Send out surveys and show a willingness to hear what people have to say.

This information will enable you to stay on top of what your customers value and help you evolve to continue to meet their needs as and when they change.

Reward your customers and reap the benefits

Offers, incentives and loyalty schemes are a great way to go even further and reward and encourage loyal customers in a way that’s tailored to your business. It could be that for every ten purchases, customers get the next item at half price, or that points are accrued with every purchase to gain discounts. You could also offer exclusive or early access to sales, gifts and services or even host special VIP events.

Attract the right audience

Every business has a brand, but to attract the right audience, it’s important to make sure what your brand stands for is communicated consistently. Not only will it make you easy to recognise, but most people like familiarity and brands that align with their own values. This can be reflected in the way you interact with customers (both online and in-person), the kind of products you offer and the types of causes you support.

If people engage with your offering once and like you, chances are they will be open to engaging with you again.

First things first, get started

As you shape your business’ future, consider where you can draw on the secrets of others’ success to help you succeed. Bringing a combination of the above strategies together is a great recipe to give your small business a leg-up on increasing customer loyalty and decreasing new customer acquisition costs. These are the kind of results every business hopes to achieve.

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