Benefits of Loyal Customers

The benefits of loyal customers are numerous: [32]

• They buy more and are often willing to pay more. This creates a steadier cash flow for a business.

Don't use plagiarized sources. Get Your Custom Essay on
Benefits of Loyal Customers
Just from $13/Page
Order Essay

• Loyal customers will refer other customers to a company, saving the marketing and advertising costs of

acquiring customers.

• They are more forgiving when you make mistakes—even serious ones—especially if you have a system in

place that empowers employees to correct errors on the spot. Then loyal customers become even more


• A loyal customer’s endorsement can outstrip the most extravagant marketing efforts. The word on the

street is usually more powerful.

• Thriving companies with high customer loyalty usually have loyal employees who are genuinely engaged.

• Thriving companies with high customer and employee loyalty are generally known to outpace their

competition in innovation.

• Loyal customers understand a company’s processes and can offer suggestions for improvement.

• An increase in customer retention can boost a company’s bottom-line profit by 25–100 percent,

depending on fixed costs—costs that remain the same regardless of the amount of sales (e.g., rent).

Customer loyalty begins with the customer experience and is built over time through the

collection of positive experiences. [33] This will be true no matter the size, industry, and nature of

the small business. Customers’ experiences will influence how much they will buy, whether they

switch to a competitor, and whether they will recommend the brand or the business to someone

else. [34] Small businesses cannot rely on the loyalty that comes from convenience (e.g., using the

car dealer close to home for repairs instead of the one farther away that provides better service).

Loyalty is about making a customer feel special. This is the dream of all small businesses—which

is something that small businesses are particularly well suited to create. Because of their size, it

is easier for small businesses to have closer relationships with their customers, create a more

personal shopping environment, and, in general, create great customer experiences. Think back

to Bob Brown of the Cheshire Package Store


and taste our undisputed quality.