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Customer Loyalty Equals Cash

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customer loyalty

When starting a business, one of the top factors of consideration is capital. How are we going to get it? Where is it coming from? Why can’t I have more of it? We seem to think that big businesses like Amazon or Google have these questions figured out, but they are just as in the dark as the rest of us.

We can account for most of the revenue coming in at the top of a business. More than two in three businesses lose more than 17% of their revenue to failed payments. These payments can be failed subscription payments, credit card transactions that don’t go through, or insufficient funds at the time of payment.

With the convenience of auto renewal on subscriptions service we almost never have to remember when to pay bills, for services, and even prescriptions. However, auto renewal services are contributing to a significant amount of churn for businesses. Over 47% of businesses lose profit on auto renewals due to change in payment information.

In order to account for that loss in revenue from failed payments, companies need to raise costs in order to stay afloat. That cost comes in the form of increased customer service needed to try and recoup the lost payment and from the hike in chargeback rates.

In this process of blinding losses, businesses are separated from the weak and the strong. Weak businesses make one grave mistake that costs them millions in this situation: forgetting about customer loyalty. Companies like Apple and Google excel in this area and that’s where they bring in the dollars.

Focusing on creating a loyal customer, brings down your marketing costs, increases revenue, and improves service quality. Since 65% of a company’s business comes from existing customers in times of loss it is more important to focus your efforts internally.

By knowing who your best customers are you increase their valuation. Leveraging tactics within your company to help met the needs of these customers leads to a direct rise in the rate of profits

While it is hard for a company to admit they are wrong, doing so is often the number one way to increase customer loyalty. Finding out why a customer left your business or services is not a sign of weakness, but rather a way to provide a better service for your existing customers.

While many customer complaints can seem exhausting, it is necessary that you spend time and learn from each one. The old adage that “the customer is always right” is especially important when evaluating your customer loyalty.

The last step in creating impactful customer loyalty is to try and offer many channels of customer service. This not only establishes you as a company but it provides your customer with a sense of security and pride in the company they have picked.

Customer loyalty is a fairly simple tool you can engage to increase profits and raise revenue quickly. Take your company out of the picture and ask yourself how you would want to be treated.

How Legendary Companies Make Money
Source: GravySolutions.io

Brian Wallace is the Founder and President of NowSourcing, an industry leading infographic design agency , based in Louisville, KY and Cincinnati, OH which works with companies that range from startups to Fortune 500s. Brian also runs #LinkedInLocal events nationwide, hosts the Next Action Podcast, and has been named a Google Small Business Advisor for 2016-present and joined the SXSW Advisory Board in 2019. Follow Brian Wallace on LinkedIn as well as Twitter.

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