Why Is Customer Loyalty Important ~ and why does it matter so much?


Why Does Customer Loyalty Matter So Much Today?

How much time is your business spending on generating customer loyalty? If the answer is none, or very little, you’re seriously missing out on a lot of potential extra business, and customer loyalty is absolutely essential for the sustainable growth and profit of any company.


Because loyal customers are what makes you different from your competitors. Loyal customers are literally the key to your success.

You may be an online business, a high street business, a restaurant or a local winning our first customerservice provider. Back in the day we all remember the struggle and then absolute joy of winning our first customers.

Usually it was a tough battle to get them to trust us enough to place their business or make that first purchase, and in many cases those first customers became champions and often friends.

Why was this?

It’s because without realising it, we were often so pleased to have them as customers we treated them like royalty so they never wanted to go anywhere else, and quite often they become very loyal. (Even to the point of telling you if something had developed in your business that they didn’t particularly like or agree with).

In my locality, I developed a great friendship with the owner of my local Italian restaurant. (I’m going back a few years)

italian pizza chefFaris started his restaurant (Giovanni’s) the same year my wife and I moved into the area. At the time I was a co-owner of a fast growing building services business and (without bragging) had spare cash to spend in most reasonable restaurants several nights of the week.

At the time we weren’t familiar with the area or restaurant and wandered in one evening looking for somewhere close to home where we could enjoy well-made simple Italian cuisine.

Without realising it we had walked into Giovanni’s during the first few opening days and was met with such a warm welcome that we instantly felt at home.

Was the food great in those early days? Well let’s say that there was room for improvement, but that didn’t matter.

What did matter was the warmth and friendliness received, a willingness to improve and a constant refresh of new dishes.

In other words, they went out of their way to not only prove they could do it but to also retain both my wife and I as regular customers along with many others who walked through those early doors.

What was the upshot of this?

Well for many years we called in to dine several times a week, we held all our family celebrations at the restaurant, including the 16th, 18th and 21st birthdays of our children, and they have also carried on the tradition introducing their own friends and now family.

Many years later, Faris and his team are still going strong and have many more loyal and returning customers, which is testament to his willingness to go the extra mile and provide outstanding service.

Gaining new customers costs more than retaining them

Did you know that it actually costs a lot more to attain new customers than it does to keep existing ones?

People talk about its importance all the time, but they are only paying lip service to the concept.

Many business owners are either too lazy or unimaginative to follow up with offers and incentives to encourage existing customers to return.

Bizarrely, a lot of business owners actually believe that it is beneath them to court the customers who have already spent money. Instead, believing that the customer should be chasing the business owner and what he/she has to offer.

Gone are the days of Victorian pomp and snobbery, or 1950s post-war scarcity. The high street is awash with goods and services and the easiest target for your wares is those who already know and trust you.

All businesses want to save as much money as possible

Focusing on customer loyalty can help you reach that goal.

If you’re main business strategy is focused on continually searching for new expense of gaining new customerscustomers and forgetting about the ones you already have, you’re currently wasting a lot of money that could be used to help push your business forward, plus you’re also leaving a ton of cash on the kitchen table.

Existing customers deliver consistent healthy profits! 

If they’re happy and you make the effort to entice them back with offers and loyalty schemes, they will continue to come back and buy more from you. This will generate a lot more money in the long-term than the money spent by one-off new customers.

Loyal customers attract new customers

Customer retention can boost profits faster than any means of customer acquisition. In many industries, solid customer retention always leads to new business.

Word of mouth is one of the most powerful forms of marketing.

word of mouth customer loyaltyIf your customers are happy, they’re going to spread the word and recommend you to friends, family and colleagues.

It’s fact and just happens.

People love to talk about a deal they got, or the wonderful customer service. Even if something has gone wrong and the business owner has gone out of his or her way to rectify matters, people love to champion that.

The flip side of course is that people also love to talk about bad service and shoddy treatment, so beware of the two edges of the one sword.

So, rather than having to spend a fortune trying to gain new customers and enhance your reputation, your existing customers will do it for you, absolutely free!

How can you achieve customer loyalty?

So you have an idea of how important customer loyalty is to your business, but the question is how can you make sure your customers become loyal in the first place?

It all boils down to customer service, fair dealing and perceived value.

cheerleader championI’ve banded about the word “Champion”. But just what is a Business Champion?

Some companies use it as an internal form of recognition of the commitment and achievement of certain members of staff.

For me though a business champion is a delighted customer who is so pleased by the way they are treated that they can’t help telling friends, family and often other customers within the store how wonderful the business is.

Often they will leave reviews and take to social media to express how delighted they are, and the more the business courts a champion, the more the champion will go on to champion the business!

Now I’m not saying that a business has to go over the top at every opportunity as often this can come across as being insincere.

An example of this and a pet hate of mine often happens within commission related situations such as car sales, furniture and kitchens for example. I often find in these types of business if the sales person gets to know your first name they will ask you if they can use it but will then refer to your name in every sentence.

That comes across as insincere because it damn-well is, and often puts me straight off purchasing anything. In fact, I usually can’t get out fast enough…

Statistics show that most unhappy customers will not do business with a company again after a bad or insincere experience.

Even worse, unhappy customers have become very vocal (anti-champions) and won’t hesitate to complain and vent their views online.

So, the key ingredient to keeping existing customers happy is to strengthen your customer service and be sincere.

Ensure the products and services you provide are top quality and that any complaints you receive are handled professionally and quickly.

In today’s competitive environment customer retention can no longer be ignored and is the one thing that can make a significant difference to how successful your business becomes in terms of profitability.

At Local Trade Link we actively encourage comments, views, feedback and of course questions.

Please leave your thoughts below and we will respond as soon as possible.

8 Replies to “Why Is Customer Loyalty Important ~ and why does it matter so much?”

  1. This is an informative and educative post.Thanks for sharing this knowledge.This new year I have the goal of starting a business and I’ve been making some researches on how to get customers, tips so running and so on.This article is really what everyone should read, I will strongly share this to others

    1. Hi Lok,

      Thanks for reading and taking part.

      In the beginning it’s a mix of aquiring new customers and retaining those that you win.

      Retaining them isn’t complicated. Simply communication, information about relevant offers, tips or ‘How to’ type information will do the trick. Just make them feel that you care.

      Once your customer base is large enough, then simply by nuturing it the customers will take care of you.

      What sort of business are you looking to set up Lok?

      If I can offer advice in any way, please let me know.

      Best wishes.


  2. Hi there,

    I couldn’t agree more.  It’s vital for companies to keep your customers happy and loyal.  I am one of those people that is resistant to change.  However, I am also one of those people that cannot stand bad customer service.  If you mess it up, you’ve lost me forever.  If you don’t mess it up, I’m as loyal as it gets…even when it’s more expensive.  Do loyal customers tend to spend more or is that just me?

    1. Hi Kris,

      I don’t think it’s just you. For a start I’m on the same page.

      I’ll often stay a loyal customer even if it does get messed up, as long as I can see that attempts are being made to put it right.

      Everybody is human and subject to an off day, but there is no place or need for downright poor service or bad attitude.

      As you quite rightly point out, it’s vital for companies to keep customers happy and it’s so easy to do.

      Either the business owner does it direct, or the business provides customer service training AND monitors it.

      It’s no more complicated than that…

      Thanks for reading this article and providing input.

      Have a great day.


  3. I have been in the customer experience world for my whole career so I would absolutely agree that it is one of the most important things your business can focus on. Keeping and retaining customers is not that difficult if you just communicate with them and keep them informed.

    Great article an reminder that there are more costs to get a new customer than have an already existing customer come back time and time again.

    I think if businesses are authentic, deal fairly with their customers and put their needs ahead of the business, they will have customers for life. Putting people first, I believe will always lead to more profit!

    1. Hi Kory,

      100% agree. Putting people first will always pay dividends.

      It’s more of a long term strategy but if you are going to the time, trouble and expense of setting up a business then it needs to be viewed as long term anyway.

      Short term gains (including 1 off customer purchases) are exactly that – short term.

      Like you quite rightly point out. It’s not that difficult to retain and win customer loyalty. It’s simply communication, relevant information and fair dealing.

      Thanks for your input and have a great day.


  4. For a while, I have been so concerned about the customers who come to my site and what can i do to maximize my bottom line. for reading the article, I learned that both the returning customer and the new customer are equally important but its harder to bring in a new customer if you are trying to find them yourself. If you can build a business in which your current customers are happy, not only will tat person return to your establishment but they will share what they like with their friends and families. I feel the business works better though word of mouth! Thanks for the insight!

    1. Hi Wesley,

      Thanks for taking the time to read this article.

      Yes, you are 100% correct. Building a business by having a mix of new customers and engaging with your existing customers is the way to go.

      Once you get to the point where you have a good base of existing customers who you have treated fairly and looked after, then they will look after you in return.

      It’s a win/win.

      Have a great day.


Leave a Reply

Your email address will not be published. Required fields are marked *