Did you know that it’s five times more expensive to recruit a new customer than it is to retain a current one? How about that by increasing your customer retention rate you can increase your company’s profitability by anywhere from 25% to 125%? It’s clear that current customers represent an incredible amount of value for businesses, yet Harvard Business Review estimates that on average, businesses lose 50% of their customers every five years.
Achieving high levels of customer loyalty is no easy task. Building brand loyalty requires a concentrated effort on the part of businesses to differentiate themselves and continuously improve their customer relationships. However, in every industry there are a few companies whose legendary customer care can serve as a guide to others. Here is a list of five exemplary companies that inspire customer loyalty by differentiating their customer care:
1. Nordstrom: Nordstrom has always been known for exceptional customer service in the retail industry. The Nordstrom employees have one rule, “Use good judgment in all situations,” which empowers employees to do whatever it takes to achieve superior customer satisfaction without having to navigate through difficult rules and regulations.
In addition to a service oriented company culture, Nordstrom has a valuable loyalty rewards program that engages customers and provides real benefits to frequent buyers. Their loyalty program provides early access to sales, free tailoring, and other discounts, while the tiered nature of the program encourages customers to stay loyal to the brand by encouraging them to spend more in order to gain further benefits. In fact, members of the Fashion Rewards Program shop twice as often and spend three as much as the average customer. Personal interactions between employees and customers and an exceptional loyalty rewards program means that Nordstrom has many customers-for-life and impressively high customer loyalty when compared to other department stores.
2. Amazon.com: Amazon.com has consistently strong customer loyalty because of its focus on a simple, easy and customer-centric shopping experience. Amazon is second to none in product availability, making it easy for customers to find whatever they need, no matter how obscure.
Customers using Amazon have at their fingertips access to product information, reviews, pricing from multiple sellers, and product suggestions based on previous purchases. This plethora of information simplifies each purchase decision and increases customer confidence. In addition, Amazon Prime provides benefits for loyal shoppers such as free two-day shipping and other discounts. Amazon.com has exceptional customer loyalty because of their focus on simplifying the customer shopping experience.
3. Southwest Airlines: Southwest Airlines has superior customer loyalty because of their belief that their company is “in the customer service business – it just happens to fly airplanes.” Southwest promotes a better customer experience by hiring employees based on attitude rather than work experience and then training them to both perform their jobs effectively and represent the company in a positive manner every step of the way. By hiring employees that are willing to engage, Southwest ensures that customers will have the best service experience possible while flying.
Southwest is able to offer lower prices and provide greater value to customers by flying just one type of aircraft, offering point to point flights instead of the traditional hub and spoke model, and their simple no-frills service with fewer fees than competitors. Customers are loyal because they can get where they need to go easily, at a lower cost and they might just enjoy a complementary in-flight laugh.
4. Apple: Apple, which has a customer retention rate of over 90%, achieves impressive customer loyalty through its exceptional products and focus on customer service. Its reputation for impressive, newsworthy innovation means customers are willing to pay to upgrade their products (even for rather minor additions). The consistent interface makes it easy for Apple users to adapt to new products, and provides a consistent experience for those who own multiple brand devices. “You’ve got to start with the customer experience and work back toward the technology – not the other way around,” said late Apple co-founder, Steve Jobs.
Apple also outperforms its competitors in customer service. The Apple Genius Bar and simple service agreements make it easy for Apple’s customers to get the support they need. Apple customers are loyal because Apple goes above and beyond in both its products and service, creating an almost cult-like brand experience.
5. Chipotle: Chipotle has quickly risen in the restaurant ranks and has been able to maintain customer loyalty even in the face of rising prices because customers are willing to pay more for their fresh, sustainably grown ingredients.
Customers are consistently loyal to Chipotle because they offer a healthier fast food option and provide extremely quick service even at rushed meal times. Chipotle recently launched the exclusive “Farm Team” loyalty program that offers benefits to their best customers while teaching them about the company’s efforts to provide fresh food in an environmentally friendly way through the Food with Integrity Program.
Chipotle’s customers are loyal to the brand because of its commitment to social responsibility while providing a superior product. And when it comes to customer service, every employee must exemplify 13 official characteristics, four of which revolve around being happy.
Whether it’s because of personalized customer service, social responsibility, or simply a better product, these five companies stand out because of their high levels of customer satisfaction. By creating loyal customers-for-life, businesses can increase their overall profitability while gaining a valuable resource for brand evangelization and growth.
Check back soon for five more companies that inspire impressive customer loyalty and how they do it.
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