Sample Process Essay: How to Maintain Customer Loyalty
A process essay discusses and explains the steps for doing or accomplishing something. This process essay expounds on the process of maintaining customer loyalty in the 21st century. The essay delves into the strategies that will influence customers’ perceptions of a company and encourage them to be loyal.
In a competitive market, businesses cannot simply rely on the quality of their products and services to acquire new customers and retain old ones. They must proactively pursue customers and encourage them to be loyal to their brand. Customer loyalty is not an impossible task to achieve because humans are creatures of habit and loyalty tends to come naturally, which is why 57% of consumers spend more on brands that they are loyal to (Wollan, et al. 2017). With that said, consumer behavior has shifted since customer loyalty was first established, thereby necessitating a change in strategies toward retaining old customers. In the succeeding pages, the author will expound on the steps to maintain customer loyalty.
Definition of Customer Loyalty
Customer loyalty is a well-established marketing strategy that has, for years, shaped the way businesses market their products and interact with customers. Customer loyalty is defined as consumer behavior geared toward the continued preference of a particular brand, product, or service over other available options, which is grounded on positive experience and value associated with the brand or company. Kincaid (2003 cited in Srivastava and Rai 2018) adds to this definition the likelihood that the choice of one brand over another may not always be the most rational decision. This supplement emphasizes the consensus among business and marketing scholars that customer loyalty is not always linked to the quality of a product, though it is a major consideration as well, but to the customers’ perceptions and experiences with the brand.
The American Marketing Association, in a 2017 study, identified two levels of loyalty. The first level is a satisfied customer who buys a product regularly because they are satisfied with its quality or performance for a long period (Aaker, Marcum and Marketing News 2017). They find no reason to buy from another brand since their current brand is consistently good and convenient to buy. The second level is a committed customer who feels an obligation to continue to patronize a product or company even when they are aware that it is not the optimal choice. These consumer behaviors have informed approaches to customer loyalty. The AMA has also identified the major drivers of customer loyalty—dependability, emotional connection, superiority, and social media presence (Aaker, Marcum and Marketing News 2017). These components define a customer’s experience and could drive them toward either level of loyalty.
Maintaining Customer Loyalty
In order to maintain customer loyalty, businesses must take proactive steps to establish a strong, positive relationship and espouse positive value and experience for their clients. As mentioned earlier, consumer behavior has evolved over the years, requiring new approaches and strategies to establish and maintain customer loyalty. Loyalty and membership programs that have a point system for every purchase, a common practice until today, are no longer as effective as it once was (Wollan, et al.2017). Particularly, millennials, as a marketing segment , have negative reactions toward loyalty programs and other efforts that blatantly try to earn their loyalty (Wollan, et al. 2017). Thus, the younger market requires an innovative and subtle approach to customer loyalty.
Originally, rewards programs focus on giving discounts and free products to customers based on how much they have purchased. However, as Wollan, et al. (2017) explain, this strategy tends to be margin-dilutive as they lower the sale price and lower the customer's perceived value of products. Customers stand to gain more when they reinvent loyalty programs to focus on value-adding experiences rather than discounts and freebies. Instead of these outdated strategies that the current demographics do not find interesting, companies can employ these strategies for establishing and maintaining customer loyalty.
Use A Customer Relationship Management (CRM) System
A customer relationship management system manages a company’s relationships with existing and potential customers. This technology allows companies to stay connected with customers, thereby improving relationships, productivity, and profitability. CRM systems provide companies with customer data so the former knows what customers want or need, their preferences, purchase history, and products they are interested in, as well as their social media interactions.
CRM opens up numerous strategies to stay in touch with customers and keep them engaged or interested in the brand. With this information, companies can better understand their customers and tailor marketing campaigns and experiences for them. Moreover, with an understanding of their target demographic, companies can formulate more appealing customer loyalty programs or service offerings that, although not necessarily free, add value for customers.
Personalize Sales and Marketing
Customer loyalty is majorly anchored on customers’ perception of the company. Customers’ perception of a brand improves when it meets their personal preferences. With personalized messages, customers feel like brands are genuinely trying to get to know them and provide for their needs. It is a signal that the company is making an effort to build a genuine long-term relationship with them and have their interests as a priority rather than profit alone (Hall 2019). This impression, whether the customer is fully aware of it or not, fosters a positive experience throughout the customer journey, which in turn, encourages customers to reciprocate the commitment with loyalty.
To leverage personalization to build customer loyalty, companies can send personalized messages through e-mails, thank you pages, and follow-up messages. Companies can start with the simple practice of using the customers’ names in all messages. Instead of sending out promotions of new products or sales in e-mails, send out product recommendations that cater to the customer’s specific preferences. Likewise, sending them information-based content that they may be interested in or that is related to their queries is an effective way to maintain engagement with a customer. Context-based support and resolving customer complaints immediately are other ways to engender a positive impression.
Engage With Customers
Consumer loyalty is largely based on impressions and feelings, which is why one of the ways to build this is through customer engagement. Having a social media account and posting interesting and relatable content is not only valuable for digital marketing efforts, but for genuinely connecting with customers. Companies must take note to establish an emotional relationship with customers by posting content customers can relate to on a personal level or are humorous (Wibowo, Linswati, and Adzimaturrahmah 2020). Showing appreciation and gratitude toward loyal customers is another great way to foster an emotional relationship. By acknowledging the role customers play in the growth of the business makes them feel like a valuable part of the brand and, as a result, feel invested. These same strategies can be implemented offline as well when customers buy from a physical store. Emotional investment in the brand is a crucial precursor to customer loyalty.
The language that brands use to communicate with their customers is another factor that could help establish customer loyalty. When a brand speaks its customer base’s language, the customers feel more comfortable with them and will likely engage on social media (Wibowo, Linswati, and Adzimaturrahmah 2020). It establishes trust because using the same language, especially when combined with personalized content, makes customers feel like the brand understands them and their needs.
Create A Community
The emergence of the Internet has allowed people from all over the world to connect. As a result, many communities based on common interests and values have formed online. Numerous companies, such as Starbucks, have leveraged the allure of a community to build strong customer loyalty. A brand community is a group of customers who are emotionally invested in a brand beyond its product offerings (West 2020). They follow the company’s social media accounts and engage with them, as well as voluntarily consume their content.
Building a community takes years, and more often than not, is synchronous with building customer loyalty. The first step toward building a community is engaging your customers. Social media provides cost-efficient channels for connecting and interacting with customers. However, this process requires more than posting corporate messages. Personalized marketing campaigns should be reflected in the brand’s social media content to encourage customer engagement.
Brands can rally their customers toward advocacy that the company believes in (West 2020). Companies should employ the modes of persuasion —ethos, pathos, and logos—to attract customers that have the same beliefs and advocacies. Showing support and concrete efforts to advance the advocacy, as well as holding activities in support of these advocacies, naturally leads to stronger customer engagement and a community.
Ask & Respond to Feedback/Reviews
Asking for feedback or reviews is how many companies show their customers that they are dedicated to serving them better. Proactively asking for feedback, especially after an interaction or a transaction, is an effective way to get a customer’s genuine thoughts on your services (Hayati, Suroso, Suliyanto, and Kaukab 2020). Simultaneously, it sends the message that the company values its thoughts and opinions and, as mentioned, is committed to consistently improving its products and services. Likewise, companies should try to resolve any issues. These could turn a client’s negative experience into a positive one, so the company can retain them as a client (Hayati, Suroso, Suliyanto, and Kaukab 2020). Other potential clients may also see this and get a positive impression of the company. However, there is also value in responding to positive feedback. Responding to these with a simple “thank you” reciprocates the positive feeling and reinforces the positive experience they had. Companies may also take it a step further by sending a free offer or discount to show their appreciation while also encouraging the customers to continue supporting the brand.
Customers, by nature, share or recommend products or services they enjoy to their circles. Conversely, shoppers generally trust the recommendations of their peers and actively seek them before making a purchase (Clark 2020). Encouraging this behavior will supplement the company’s efforts to build customer loyalty. Referrals are also a form of positive feedback. The clients recommending the products also serve as the building blocks of a brand community. Thus, promotional efforts like “refer a friend” programs or sending gift cards for referring a certain number of friends is an effective strategies for building customer loyalty.
Offer Wish Lists
As mentioned earlier, loyalty is engendered through positive experiences with a brand. Wish lists are another way to improve the shopping experience for customers. Wish lists allow customers to keep track of items they want to purchase so that they do not forget about these items as easily, such as when they are buying Christmas gifts . Wish lists encourage customers to return to the company and shop. It may also serve as a type of grocery list that customers can reference.
Moreover, wish lists improve the shopping experience in more ways than one. It provides companies with data regarding a customer’s preferences, which can supplement efforts to create personalized marketing experiences for customers. Overall, wish lists are a subtle way to foster loyalty by improving the customers’ shopping experience.
Customer loyalty has been considered when writing marketing plans for companies in various industries. By affecting customers’ decision-making processes while shopping, customer loyalty has been trusted to drive up sales and profits. Evidently, loyalty to a brand is driven not simply by product or service quality, though these are crucial as well, but by the customers’ overall impression and experience with the company. As discussed in the process essay , companies who want to establish their brand loyalty should find ways to improve the shopping experience, engage with their customers, and establish a consistent emotional connection with their customers. Companies, both small and large, can use customer relationship management (CRM) systems, create personalized marketing, engage with customers, build a brand community, ask and respond to feedback, encourage referrals, as well as offer wish lists. These strategies range from major changes in a company’s operations to minor changes in existing strategies and the website. Nevertheless, each step discussed above supplement or support other strategies, and so are all important in the building of customer loyalty.
The process essay above discussed the various steps that companies can follow to foster customer loyalty. The steps discussed need not be followed in chronological order, especially since some components complement each other and most likely will be implemented simultaneously. CustomEssayMeister can help students write process essays discussing the process for various topics, no matter how technical.
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Clark, J, 2020. 15 online review stats every marketer should know. Search Engine Journal, [online] Available at: https://www.searchenginejournal.com/online-review-statistics/329701/#close
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