Small business owners too often focus on day-to-day business and let relationship building fall by the wayside. Customer loyalty is extremely important to small businesses. Research has shown that the overwhelming majority of Americans will choose to take their business elsewhere after receiving bad customer service. At the same time, Bain & Company reported that a 5 percent increase in customer retention for financial service providers could result in an increase of more than 25 percent in profits.
Building customer loyalty depends on delivering an excellent product or service backed by caring and responsive service. Customers prefer an interactive, personalized experience to a faceless transaction. Taking the extra time to build relationships and to express real concern for customers and their needs will make them want to return.
Some small businesses are increasing customer loyalty in more creative ways. Take, for example, a bakery that offers classes to the public that reveal some of its “secrets” to great cupcakes. While some people may think that giving away secrets is a poor business move, the people who take the classes begin to feel more connected to the bakery and become something akin to brand ambassadors. Thus, they not only become more loyal, but also serve as free marketers.