Your core customers will also be your loyal customers.
Many businesses believe that being customer-centric means building an expensive website or implementing a slick sales process, but the highest-performing businesses know that being truly customer-focused comes down to something entirely different. It means being able to answer one simple question: Who is my core customer?
This question is more complex than it might sound. If you’re going to have any chance of answering it accurately, you’ll need to ask yourself another question first. That is: What is it that makes my business different from my competitors’? Only by knowing this will you be able to recognize your core customer. Your core customer is the person who wants the very thing that your business provides and that your competition does not. Not only are these your most satisfied customers, but they’re also the ones who will come back to your company time and again.
The key message here is: Your core customers will also be your loyal customers.
The best companies know that customer loyalty is incredibly important. They understand that new customers are great, but that repeat customers are even better. Consider the fact that three-quarters of employees in high-performing companies report that their employer is very good at retaining customers, whereas just half of all employees in low-performing businesses say the same.
The reason customer loyalty is so valuable comes down to simple economics. Attracting new customers is often very expensive. Consider the fact that a typical company has already spent around half of the money that a new customer generates on attracting that customer in the first place. So if a new customer spends $100 with your business, your profit is likely only around $50, because you already had to spend the other $50 dollars on the sales and marketing that brought them to you. But these costs greatly diminish if that person keeps returning and becomes a loyal customer.
So for the sake of your profit margins, you need to develop a relationship with your customers rather than thinking of your interaction with them as a one-off transaction.
The highest-performing companies build relationships with their customers by asking them for feedback, implementing their product suggestions, and rewarding them for their loyalty. What’s more, these companies work hard to turn that loyal customer into an advocate for their business. An advocate is a customer who likes your business so much that they begin to recommend you to others in their social network.