Customer loyalty is what all business owners want to achieve. Loyal customers keep on coming back and help your business to be more profitable.
Every small business owner knows that customers who know like and trust you are more likely to stay with you.
Provided you can keep on pleasing the customer they are unlikely to want to go off into the big bad world on their own, and take the risk of disconnecting with you. After a while the familiar seems safe, and resistance to change becomes the motivating force. As a small business you have the added potential for a more personal relationship with your customer, and they will genuinely not want to leave.
In the old days we all stayed loyal. Loyal to our bank, loyal to our mortgage company, loyal to our insurance provider, and loyal to our utilities provider. But we are not in the old days any longer, and in the new world it seems that the new customer hits more targets more quickly, and helps to grow market share.
I have just had a conversation with a friend of mine who noticed that her home central hearing / servicing /electricity contract had increased by 25% over the previous year. She got an alternative quote from another supplier which was 50% cheaper, and then rang the original provider to tell them she was leaving. Within a blink of an eye her quote had reduced from £ 40 per month to £ 10 per month. Her first response was outrage. Why was the price inflated for a loyal customer, and then dropped when she said she was going to leave? If there had been no price increase, she would have been happy to pay as before. That was her first thought. Her second thought was to follow the money, and make the saving.
She has been retained as a customer. But at some cost. She now no longer feels loyal to them, and when the contract is renewed again next year will fight to the death (make a phone call) to keep the price as low as possible. She has become a savvy customer, motivated by price, and is no longer a natural customer. She is going to write and complain, and will expect a convincing response.
Banks, insurance companies, and mobile phone companies are notorious for giving preferential treatment to their new customers. The net result is that existing customers feel aggrieved, and loyalty is lost.
Price is part of the reason why consumers buy. The other parts consist of branding, values, and customer service. Treat customers well and natural inertia will help them to stay with you. Treat customers badly and they shop around for price. Small businesses have a natural advantage for staying in the warm pool of customer loyalty and avoid being caught in the cold ocean of price alone.