What is a Loyal Customer?

What is a loyal customer? Explanation of the definition, benefits for companies and training methods. We also discuss tools that can help improve customer loyalty.

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What is a Loyal Customer?

A loyal customer is a customer who is attached to a company or product leading to increased sales for the company. This article outlines the definition of loyal customers, the benefits of increasing them and how to cultivate them.

A loyal customer is a customer who has a particular attachment to a company, brand, product, etc., among customers with high frequency of use and high sales.

A loyal customer is defined as "a customer who is attached to a company or product and continues to buy and use it". Customers who are easily confused with loyal customers are "good customers".

High-value customers are customers who make large purchases of products and services and contribute significantly to sales.

Both high-value customers and loyal customers are customers with a high degree of contribution to sales, but high-value customers are not particularly demanding of companies or brands.

If they find another product they like, they may buy products from other companies in the same way and abandon your company.

Definition of a loyal customer

Customers have stages such as "potential customers," "prospective customers," "new customers," and "repeat customers," with loyal customers ranked at the top. It refers to customers who not only use regular courses and long-term ongoing plans, but also have "loyalty (trust and attachment)" to the company's brand, products and services.

It is not just regular customers who spend a lot of money. They have characteristics such as "they like the product/service and repeat it", "they do not accept attractive offers from rival companies" and "they introduce them to their acquaintances".

The difference between a good customer and an up-selling customer. However, there is a possibility that good customers may have a favorable evaluation of the company's products and services to some extent.

Therefore, it is necessary to take steps to induce not only good customers to use the service in the future, but also to become loyal customers.

Benefits of increasing loyal customers

Loyal customers not only contribute greatly to product and service sales, but also have many benefits, such as stable sales and new customer acquisition. Let's take a closer look at the main benefits.

Good customers are those who use the products and services repeatedly and account for a large percentage of the company's sales. However, the reason for the purchase is not limited to the company's brand or attachment to the product or service.

There is the "Pareto Principle" which indicates that 80% of sales are made by the best customers who represent 20% of the customers, not necessarily a loyal customer. Thus, there is a fundamental difference between good customers, best-selling customers and loyal customers.

Stable sales

Since loyal customers have a strong attachment and trust in brands, products and services, there is little risk of switching to competitors and can be expected to contribute to long-term sales stability.

It becomes more stable as the proportion of loyal customers among customers increases. This facilitates the creation of management plans and future revenue forecasts.

More new customers

Loyal customers are not only attached to the company's products and services, but also tend to play a role in actively recommending them to family, friends, acquaintances and others close to them. It also contributes to the development of new customers through word of mouth and social media posting.

Reviews and posts from consumers who have used the product are very reliable, so referrals from loyal customers are very attractive. Effective advertising is possible without spending a large amount of advertising costs, which will lead to the acquisition of loyal customers in the future.

Getting feedback loyal

Feedback from loyal customers is always likely to be of good quality, not only positive but also suggestions for improvement. Sometimes, constructive requests and receiving serious complaints are indispensable to improve our products and services.

It is precisely because they have been using it as a fan for so many years that they can be expected to provide suggestions and improvements that corporate developers would never do.

How to develop loyal customers

So what should we do to increase the number of loyal customers who contribute greatly to the sales of our products and services and lead to the stability of the company's management? We will explain how to develop loyal customers in three steps.

Determine your target customers

To develop loyal customers, it is important to develop a strategy from a long-term perspective. In addition, the criteria for defining target loyal customers differ from company to company.

Determine the definition of a loyal customer based on criteria such as emphasizing frequency of purchases.

Such as once every two months, emphasizing a high purchase amount per purchase, or emphasizing the number of years of usage. what type of customers you want to appreciate.

NPS (Net Promoter Score) is attracting attention as a survey that quantifies how much customers trust and are attached to a company's products and services.

This is an index that measures the degree of recommendation by investigating the degree to which people want to recommend the company's products and services.

In addition, by creating a matrix that multiplies NPS and customer profitability metrics, it is possible to find priority targets to convert into loyal customers.

In addition, the use of customer segments that classify characteristics such as age, gender, region, behavioral tendencies and customer lifestyle can be expected to be effective.

You can perform customer-optimized marketing activities, such as running campaigns in areas with high sales or pre-announcing campaigns preferred by specific customer segments.

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