Values and Customer Loyalty
We’re constantly told that loyal customers are an asset, but look at research and you get a really keen sense of just how valuable they are. For instance, while just eight percent of customers in a typical online retail business may be repeat buyers, they account for a massive 40% of its turnover. Furthermore, according to a study from Bain & Company, repeat customers in any type of business become increasingly valuable over time, on average spending 67% more in months 31-36 than in months zero-to-six.
Energy PR helps companies get clear about their brand values. It then helps them use these to shape and inform their marketing plans, develop their market position and build customer loyalty. Here the company’s MD, Louise Findlay-Wilson, explains why brand values are important to loyalty.
Repeat customers are a low cost way to grow a business; it can cost anywhere from five to 25 times more to attract new customers, than to sell to current ones.
And, according to our own Brand Love report, loyal customers are three times more likely to recommend a business to others and are twice as likely to stick with it when it makes mistakes.
In short, customer loyalty is commercially incredibly valuable. So how does a business increase it?
To answer this we studied over 100 leading marketers; people responsible for the success of top brands. They told us that we are loyal to the brands we love, and we love brands that have values which align with ours. Indeed values were the biggest driver of love and loyalty.
Timpson - Values
Timpson is a retail brand which does ‘values’ brilliantly. Indeed, it gets an honourable mention in our Brand Love report. The firm has absolute clarity about what it’s about and stands for. This translates into everything it does.
For instance, Timpson’s approach is based on a culture of trust and kindness. But this isn’t a mission statement that’s stuck in a drawer and forgotten. The brand ‘does’ trust and kindness.
A tenth of employees are ex-offenders and at least seven of the group’s 2,000-plus stores are run by people still serving their sentences, who are able to work under day release schemes.
It’s also mindful of other groups struggling to find work, such as the long-term unemployed, offering a free suit cleaning service for the unemployed going to interviews who can’t afford the service.
Timpson does things like this because it believes business should be about making a difference, not just a profit. The business has a clear purpose and is completely authentic. It walks the talk and its customers relate to this mindset and reward it with loyalty.
When the company’s CEO, James Timpson, Tweeted: "If you find our shops a bit short staffed this week, I’m sorry. We have a colleague benefit where you get an extra day off when your kids have their first day at school, so a number of colleagues are doing a very special job away from their shops!" it was met with widespread praise.
One person summed things up when they said: "I love the work life balance and the general empathy from your company. Will make it a mission to find a Timpson before going anywhere else.” This statement vividly demonstrates how Timpson’s brand values have resonated with the customer and built loyalty.
Applying this to your Brand
You don’t need to be Timpson to have values. A business of any size can do this. But there are five golden rules.
- Like Timpson, you must be authentic. It’s no good adopting values which aren’t your own just to appeal at a particular moment in time or fit with a trend. People will see through this.
- You must be personal. If you have great values but feel impersonal to the customer, you will not move the ‘customer loyalty needle.’ A loyal customer wants to feel that the brand knows they exist as an individual, values them and their custom. For marketers there are plenty of opportunities to gather data on the customer so that the content shared with them and the interactions are bang on.
- You must be wholehearted. It’s no good the marketing team talking values but the rest of the organisation seeing them as a gimmick. The power of the Timpson example is that the entire organisation – HR, management, marketing, and even the CEO gets and operates in accordance with the values.
- Be joined-up. Someone may be interacting with a brand in many ways – on social channels, through the site, on the phone, via email, in store, through the customer service team. At every touch point, the values need to be alive and demonstrated. Consistency is key.
- When it comes to brand loyalty, the final piece of advice centres around complacency. The greatest brand values in the world won’t save you if your marketing efforts solely focus on new customers at the expense of current ones.
In short, we’re loyal to the brands we love; earn that love through having values we can relate to. Then communicate them to us consistently, no matter who we are or how we interact with you.
To find out how Energy PR can help you identify your brand values and build brand loyalty visit www.energypr.co.uk.