No matter your business, it’s always better to keep a customer than find new ones.
Customer loyalty is what every brand strives for, to keep customers coming back again, and again and again.
It’s why coffee shops have loyalty cards, toilet roll companies offer subscription services and why phone companies hook you into long term contracts.
But as hard as you may try 100% customer loyalty is impossible.
Plus, even more frustratingly customer loyalty will likely fall when you make just one mistake.
So if you want to know why customer loyalty falls then here’s the top reasons.
Low-Quality Product
Low-quality products may be cheap to produce and get people through the door with low prices. In the long run, the race to the bottom for cheap products destroys customer loyalty.
Low-quality cheap products completely disregard customer loyalty toward your brand with consumers simply making buying decisions based on price. On top of this, customers that don’t base their purchasing choices solely on price are more likely to be frustrated by the quality.
The cliche ‘buy cheap and buy twice’ rings true for almost every low-quality product on the market. While you might be thinking that this could generate double the amount of sales, in my experience 95% of will look elsewhere when product quality lets them down.
Flip the script and start meeting customer expectations with product quality. Not only will customers come back for more but they’ll become brand ambassadors recommending your business to friends and family.
Products Don’t Solve The Problem
The easiest way to find customers is to solve a problem people face. Whether it’s a cleaning product to clean red wine out of a carpet or a WordPress website plugin to make a website faster, customers buy your product to fix their problem.
Now, imagine you’ve got a red wine stain on your living room carpet. Naturally, you go out and buy a red wine stain removing carpet shampoo. You’d expect the stain remover to do the job, right? If it cleans the stain successfully you’re going to use that same product every time.
But what if the product doesn’t work? Well, the answer is obvious, you’re not going to buy it again. Even worse, customers might ask for a refund costing you money.
In the words of Ronseal, does the product do ‘exactly what it says on the tin’? If it doesn’t then customer loyalty will fall.
Bad Customer Service
Personally, customer service is one of the biggest killers when it comes to gaining my customer loyalty.
Bad customer service and I’ll steer well clear.
Great customer service and I’m coming back, probably with friends.
And it seems I’m not alone considering Forbes reported that 47% of customers will abandon your brand within one day for crappy customer service.
I’ll say that again, within ONE DAY!
Adding to this, 89% of people say that good customer service makes them feel more positive about companies they shop with.
We’ve all been left with a bad taste in our mouths after customers treat us poorly. This doesn’t just destroy customer loyalty but it drives consumers straight into the arms of competitors.
Happily, customer service goes both ways.
Going above and beyond for customers increases loyalty exponentially. It not only helps to keep consumers but also add more devoted buyers. In fact, this is more critical than ever with 76% of American consumers saying that customer service is the real test of how much a brand values them.
Price Increases
Price increases are only natural with continual economic growth which drives the march of long term inflation.
For companies, this presents a real headache as customers hate price increases.
Let’s be honest, it sucks as a customer.
If you’ve been loyal to a brand for a long time you almost feel invested in its success, especially as you’ve been spending your hard-earned cash at their door.
One day, you’re suddenly hit with a price increase. It feels like the company is squeezing your loyalty for every penny they can get their hands on.
Sometimes, this might be true but other times it’s simply the cost of doing business.
But it still hurts, leaving you to look around at other options after what feels like a betrayal.
Some customers are happy to pay more for an awesome product or service but some will shop elsewhere. The fact is that 62% of millennials place price as a top driver for brand loyalty.
Better Competition
The grass is always greener and the world is changing quicker than ever.
New and better technology is a challenge for every company. You only have to look at companies likes Blockbuster. Once upon a time, it had almost unbreakable customer loyalty until something better came along called Netflix.
Now, what do we all do on a rainy weekday evening, rent a movie from Blockbuster or press play on Netflix?
I’ll leave the answer up to you.
It illustrates the point perfectly though. 99% of the time customers will flock to the best choice. It may not happen overnight but it’s almost guaranteed that consumers will leave a brand if there is a better competitor whether it’s because of price, customer service or final product.
I guess it’s the natural evolution, free markets and the heart of capitalist economies. No matter how strong your customer loyalty appears to be, if competitors are better they’ll attract and keep more customers in the long run.
Brands Don’t Meet Customer Ethics and Values
Last week I decided it was time to upgrade my wardrobe after a long winter.
Like you, I have my own personal tastes and styles when it comes to clothes which helps to narrow down which brands I like to shop with.
Looking back at my buying decisions a clear pattern starts to emerge, I pick companies like Toms or Passenger that align with my ethics and values.
They are companies showing a true care for quality, people and the planet.
Once again, it seems I’m not alone with 71% of consumers agreeing that they prefer to buy from companies matching their personal values.
In such a busy world with so much choice for customers, companies stand little chance of gaining strong customer loyalty without aligning with strong core values.
Companies not seeing the value in operating in an ethical manner continue to see customer loyalty fall.
You simply just have to look at big names like Nestle who have been called the most hated company in the world after the way it treats producers in the supply chain.
Or take more modern companies such as Facebook and Twitter which battle to keep users who worry about privacy, fake news and racism on their platforms.
Plus even if brands do attempt to meet customers ethical expectations, one wrong move can be fatally damaging.
Final Thought: When Customer Loyalty Falls
Customer loyalty is a goal for every business whether it’s a small local business or a world-famous brand. Simply put, keeping customers coming back through the door is good for business.
But customer loyalty is likely to fall when consumers lose faith in a brand or are lured away by competitors.
By now you should have a great understanding of why customer loyalty can start to decrease. From product quality to customers service, the single running theme is that if customers don’t walk away feeling satisfied, then they’re likely to look for an alternative solution.