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Customer Loyalty – Building Your Customer Base

Anyone who knows me knows that I am a coffee connoisseur; I have coffee flowing through my blood. More importantly I enjoy a good coffee, the type that is handpicked in the jungles of Papua New Guinea, micro-roasted in small batches and then put into a nice French press, where it steeps for precisely eight minutes. For me coffee is an art and a delicacy. Every morning I go through my ritual of heating the water, grinding the whole beans, brewing it to perfection and then sipping it from my giant green coffee mug. However, along with my morning indulgence I also have another ritual, which is stopping in at my local gas station and buying a “cup of joe” to go.

There is nothing special about this cup of coffee. It your typical Green Mountain Breakfast Blend which is almost always burnt, has no flavor and is served in a styrofoam cup. Yet every morning I stop and purchase the cup of coffee from Erik and Stacy, the cashier and deli worker behind the counter. Why is that? Why do I go out of my way to stop on my way to work, get out my car wait for Ben (A guy who works at a local manufacturing company, who seems to always arrive at the store about one minute before me) to finish poring his cup, and then pay for a substance that I not only make better myself, but just finished drinking less than 10 minutes prior?

The reason is because this small gas station has made me a loyal customer. Adam Toporek, Author of How to deal with an angry customer, defines customer loyalty as this:

Customer loyalty is the continued and regular patronage of a business in the face of alternative economic activities and competitive attempts to disrupt the relationship.

Customer loyalty often results in other secondary benefits to the firm such as brand advocacy, direct referrals, and price insensitivity.

That certainly fits my situation, someone who, despite high prices and poor products, continues to do business with them. Having and building customer loyalty should be every businesses prime goal, because strong customer loyalty will supersede all other barriers that you face as a retailer.

Fish Jumping from one fish bowl to another

Without a doubt customer loyalty is the Holy Grail in a retail market.

So what is the magic formula, how to you convert your occasional customer into a dedicated personal bank? Unfortunately there is no “one thing” that you can do that will accomplish this goal. That is because your customers come from a diverse background, with very different values.  It is for this reason that building Customer Loyalty is a multifaceted task that should start before your customer first walks through the door and continue even after they leave the premises.

One of the first things you can do to nurture your customer loyalty is to predict your customer’s wishes and needs before they express them themselves. If your customers’ needs are met immediately then they feel valued and you show that you care for them.  One of the best examples that I have experienced was during my time working at a year round ski facility in Lynchburg Virginia. Instead of simply hanging a sign in the restroom that asked to be notified if the restroom needed cleaning, the manager required that the bathroom be cleaned every 30 minutes, whether it needed it or not. This included taking out the trash, sweeping the floor, wiping the mirror, checking the toilet paper, adding paper towels and much more. After each cleaning the employees were required to print their names and department so that the customers knew exactly who had done the cleaning and when. As a result the bathrooms were spotless the 24/7 and customers were spared the gross factor of sitting on a nasty toilet or embarrassment of asking for amenities that should always be available. While bathrooms are an important item to keep clean for the customers, especially for convenience stores, the idea of preemptively preparing your facility to meet your customers’ needs is far reaching. Are there cup carriers for people purchasing multiple cups of coffee, is there windshield cleaner at your gas pumps, do you have maps of the area available for lost drivers? When you can meet your customers’ needs they will take notice.

In addition to having a store that is primed and ready to meet customers’ needs before they happen, it is important to verbally acknowledge your customers as a valued part of your family. Psychological studies show us that the most vivid memories of a customer’s experience happen within the first few minutes of their entering the store. Don’t wait until the customer comes to the front counter to greet them. This is especially important in larger stores when the customer may spend a significant amount of time looking for a product and be frustrated by the time they are ready to check out.  A simple greeting, such as a hello or good morning, as they enter becomes the take away point when they leave.

To take the idea of interaction one step further, dedicate yourself to acknowledging returning customers. In an age of credit card transactions it does not take much to look at the name on the card and store it to memory. Even if someone has visited your store only two or three times there is no reason why you shouldn’t know their name and greet them by it. By doing this, the shopping experience immediately becomes personal. It is no longer about the product that they are purchasing, but instead it’s about the relationship that they are building on a regular basis. This relationship between the store clerk and the customer becomes the foundation on which almost all customer loyalty is built.

I could go own about the importance of showing a human face of your business. Without a doubt it is the most import aspect of build customer loyalty. However along with building relationships through interacting with your customer, another very important thing to remember is that you need to show them that you value their time.

Buliding Customer Loyalty - TowerTwo years ago I was working as a retail manager at a ski shop in West Dover Vermont. On my way to work I would stop at either a gas station or a bakery (that incidentally won the best bakery in New England award from Yankee magazine) for my morning coffee. Where I would stop completely depended on how late I was running. Both places new my name and interacted with me during the entire transaction. However if I was going to stop at the gas station I would need to schedule almost an additional 5-10 minutes because the cashier was a chatter mouth. It didn’t matter if I was giving her the biggest clues in the world that I needed to go, she just wouldn’t stop talking.

It is important to show your customers that in addition to valuing their business (by showing them that you are ready to meet their needs before they have them), and valuing them as a part of your business (by interacting and engaging them), that you also show them that you value their time. Today’s generation has grown up with drive thru’s and high speed internet, fast food chains and pay at the pump service. The expectation that their needs will be met in a timely manner are more prevalent today than even 30 years ago. This means that people are more likely to leave your store if they see a long line at the counter. Or avoid your store if they know it will take them more time to do business with you.

Instead keep track of your busy times and if necessary hire extra staff to accommodate your customers. It would be better for you to hire someone for two hours than for you to lose a potential loyal customer. Also limit your social interactions to only a few surface issues, and avoid lengthy discussions (unless you know for a fact that they have time, that they want to talk with you and that the discussion will not affect your interactions with your other customers – i.e the store is empty).

I could go on and on about different techniques and tactics to build customer loyalty however for the sake of time I recommend if you are looking for more information, check out the links in the premium section of this blog. You will find a vast amount of resources at your disposal. For now I would like to go back and look at the last part of Adam Toporek’s definition of customer loyalty:

Customer loyalty is the continued and regular patronage of a business in the face of alternative economic activities and competitive attempts to disrupt the relationship.

Customer loyalty often results in other secondary benefits to the firm such as brand advocacy, direct referrals, and price insensitivity.

As Mr. Toporek points out, in addition to the first hand financial incentives that come with having loyal customers, there are also important “secondary benefits” that will happen.

When your customers are loyal to you they are going to act, voluntarily, on your behalf as an advocate of your business. Recently the best example of this would be what is currently happening with the fast food chain “Chick-Fil-A”.  The president of Chick-Fill-A recently made a politically charged comment that the mass media and several big name politicians have publicly fought against. Despite these heavy hitters doing everything they can to discourage patronage at the restaurant, Chik-fil-a’s fans have rallied behind their favorite fast food chain and made a stand and a declaration that they will not only continue to eat at the stores but eat there more often. Regardless of whether you agree or do not agree with the president of the company, to have this sort of customer loyalty has without a doubt saved his business from what normally would have resulted in sure ruin.

In addition to having customers that will defend your business, you will also have customers who will tell their friends about your business. This is especially important because this is virtually free advertising that comes from a source that people trust, their own friends. People are much more likely to trust their own friends who have visited and appreciate your store than they are to believe in the radio advertisement that they hear while at work or read in the morning paper. Word of mouth has been proven as the most effective form of advertising. It is important to give your customers a reason to tell their friends about your business.

Finally, having loyal customers will often times supersede high prices. This means that if you have loyal customers, they will choose to come into your store to have their cup of coffee, despite the fact that the same cup costs $0.30 less at your competitors’ location. I urge anyone to not take advantage of this, but rather use it as a safety net and insurance that if your costs go up that you don’t have to worry about losing your loyal customers. They will stick with you until the end!

Customer Loyalty Generates Revenue


Building customer loyalty should be a primary goal of every business.

You can build customer loyalty by:

  • Meeting your customers’ needs promptly and before they have them
  • Showing your customer that they are an important part of your business
  • Valuing your customers’ time

 As a result of customer loyalty you will:

  • Have a longtime customer and significant source of revenue
  • Gain a personal advocate who will defend your business
  • Produce the most successful advertising campaign
  • Be able to weather economic turmoil

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