Customer loyalty is often overlooked in a local search. The thinking is that people are searching for new places to shop or for things they don’t know about already. If they were a regular or loyal customer, they wouldn’t need to search.
1. The social value of loyalty
Social media’s impact on local search is growing incredibly fast, and I am seeing it play out on my own Facebook news feed. Here are two posts from the last few weeks seeking recommendations for plumbers, lawyers and restaurants:
According to studies by Edelman, 87 percent of committed customers will recommend a brand through liking and sharing. Your loyal customers will respond to recommendation requests and put their reputation on the line for you if they like your brand.
The potential for such social media recommendations to disrupt traditional local search channels is huge. There’s an intrinsic value in the personal relationship and word-of-mouth recommendation the Google algorithm can never duplicate.
Consumers trust their friends and can gauge deeper insight on a recommendation without reading a lengthy review based on what they know about that friend’s taste in relation to their own. Businesses likewise rate word-of-mouth the most effective marketing because of the trust factor and weight usually attributed to a personal recommendation.
2. Loyal customers are both your cheerleaders and your bodyguards
It used to be that once you were found through a local search, you at least controlled the narrative from that point, as the search result would link to your website, ad or owned content.
Today, that control has been wrestled away by consumers. Search results now show up on private Facebook newsfeeds seeking recommendations. Even a Google Knowledge card populated by information from a Google My Business (GMB) account can be hijacked by bad reviews.
3. The core of loyalty
For a local business, loyalty means being selected despite the customer having other local choices. This is especially helpful for small businesses but works for national brands as well.
In the case of Chick-Fil-A, the brand has been so successful in getting diners to visit their stores no matter where they are, the company’s biggest challenge now is how to squeeze $5 million in sales out of a kitchen designed for $2 million.
4. The economics of loyalty
The economic benefit of loyalty is not just the “per capita” increase in the volume of business brought in by a return customer. Loyal customers cost less to convert, spend more when they do and upsell more frequently.
- According to Google, it costs up to 10x more to acquire a new customer compared to retaining an old one and,
- Existing customers are three to 12 times more likely to buy from a business than a new customer.
- Existing customers are 50 percent more likely to try new products says data from Koyne Marketing and they spend 31 percent more than new customers.
So, spending to retain customers and keep them coming back is a good investment.
5. Data intelligence from loyalty
Data is key to understanding business performance and consumer behaviours. Getting data from repeat customers is easier and yields higher quality.
Most customers who participate in loyalty programs voluntarily turn over personal information about themselves. Those programs provide an opportunity for the business to ask questions and get a deeper understanding of behaviours and preferences. And while loyalty programs seem to provide the most opportunity for capturing data, there are other less formal ways to do it, such as stored payment accounts or CRM databases tracked by phone or address.
Once that type of information is incorporated into operations, it helps track valuable data, such as what actions are done by which customers, what products they purchase and what times they shop. Attribution of online marketing efforts to offline purchases can be captured. And the business can see the way those customers engage with it.
6. Targeting improvements from loyalty
While there are a variety of uses for customer data, it’s the improved targeting capabilities that are key to local search marketing. The preferences of repeat customers help build profiles of your ideal and most valuable audience.
- Provide a great customer experience, a consistently good customer experience is why many remain loyal to a brand and share positive experiences on social media.
- Reduce friction in transactions, and beware of drastic changes. Convenience as an important reason customers remains loyal to a brand.
- Stay engaged with your loyal customers. According to CitiGroup, 86% percent of emotionally engaged consumers want brands to be engaged and reciprocate their loyalty in two-way interactions. Social media and email are great ways to do it.
- Stand for something. American consumers show loyalty to brands that share their values, Chick-Fil-A is a prime example of this. The company also wears its values on its sleeve, staying closed on Sundays and still beating many of its competitors multiple times in revenue per store.
- Use loyalty programs to identify your customers. Loyalty programs help tie your customers with data that is useful in helping reach them and serve them better.
- Make it easy for your customers to participate. With all the technology we have, sometimes we overcomplicate things, don’t make it hard for to sign up for a loyalty program.
- Offer valuable perks. A loyalty report from Bond Brand Loyalty states redeemers are twice as satisfied with loyalty programs as non-redeemers, and those who enjoy the program are 10 times more likely to be satisfied. The economics of loyalty discussed above make it worthwhile.