3 Tips to Increase Customer Loyalty for New Brands
There is a reason why nine out of every ten startup businesses and brands fail within their first few years of operation. Even after a successful capital raising campaign, an initial product development that captivated audiences, and a brand launching that brought people into your business, developing sound strategies to retain your customers is one of the most difficult aspects of a successful business venture. Attracting new customers is certainly important for brands at all stages of their development. However, it is important to recognize that once you get that customer to your website or inside the front doors of your brick and mortar business, you have one opportunity to make a lasting impression and begin the process of developing long-term customer loyalty.
The following statistics are revealing:
• Developing business strategies focused on increasing customer retention by just 5 percent can increase your overall profits anywhere between 25 to 95 percent.
• The process of acquiring new customers can cost five times more than retaining an existing client.
• Your brand will have a 60 to 70 percent probability of selling a product or services to an existing customer, compared to a success rate of just 5 to 20 percent when trying to sell to a new customer.
Initial success during the launching of a brand often leads small business owners and entrepreneurs into the mistake of trying to scale up too quickly. Instead of focusing your advertising campaigns on increasing your brand appeal to an ever wider audience, investing time and resources in building consumer loyalty can give your business a solid foundation upon which future growth proposals can be developed. Fortunately, there are several tried and true approaches that can help small businesses increase customer retention and develop a reliable groundwork of solid, loyal customers.
Share your Story
In today´s economy, the anonymity and “facelessness” of the global corporation is slowly giving way to deeper, more personal connections between consumers and the brands and businesses they choose to support. While mom and pop stores have always played an important role in local economies, today´s consumers are making known their preference for local brands that they can connect with. In fact, the 2017 Global Future Consumer Study found that 55 percent of U.S. consumers had “very little or no confidence” in big brands. The food and beverage industry, driven by an increasing consumer interest in specialty diets and foods, is one area of the economy where small, local brands are garnering major support.
A recent Nielsen study found that “local brands are preferred to global brands for ice cream (44% vs. 27%, respectively), cookies/biscuits (40% vs. 28%), crisps/crackers (40% vs. 28%), breakfast cereal (44% vs. 29%), instant noodles (47% vs. 24%) and canned vegetables (53% vs. 20%).” Global corporations that pushed the industrial food system share responsibility for the obesity and heart disease crises that stem from unhealthy diets, and many consumers are actively looking for alternative brands whose story actively supports healthier nutrition and livelihoods.
Sharing the personal story of your brand can thus allow customers to identify with your personal history and connect with a shared set of values. A recent global survey of nearly 30,000 consumers found that 62 percent of customers want companies to take a stand on important and relevant issues. In the specialty food industry, many customers want to hear why a certain brand has chosen to go against the grain and offer healthier, more nutritionally dense food alternatives. In the specific case of Keto food brands, sharing stories and anecdotes about your personal journey with a low-carb, keto diet is one way to directly connect and bond with potential customers who can relate. In the case of a certification organization like the Paleo Foundation, being vulnerable and sharing the personal origin story behind the organization helps individuals understand the core mission and deeper culture of the organization.
Develop Customer Loyalty Programs
It is extremely important to develop programs that actively show your customers that you value their preference. Everyone loves a freebie, and often times developing a customer loyalty program is as simple as giving your clients an incentive and motivation to repeatedly choose your brand. Customer loyalty programs, or “frequent buyers” programs as they are often called, have been shown to effectively develop a steady customer base. In fact, one study has shown that 50 percent of consumers changed their behavior to reach a higher tier within a specific loyalty program while 49 percent of those customers admitted to having spent more once they joined a loyalty program.
For Keto food brands, these types of loyalty programs can also be geared towards the release of new products in order to stimulate market demand. For example, one type of customer loyalty program could offer a free sample of a “soon-to-be-released” Keto bar to frequent clients and thus stimulate long-term demand for the product that is to be launched.
Offer Sharing Incentives to further drive Customer Loyalty
While rewards programs can be effective, a deeper sense of customer loyalty that is based on shared values is also essential. Consumers today also want to support businesses and brands that actively share a portion of their profits with sustainable and just purposes. The outdoor clothing brand Patagonia has developed an extremely loyal customer base through publicly committing to donate 1 percent of its sales to environmental organizations around the world that work to conserve and restore the natural environment. This commitment allows Patagonia´s loyal customers, the majority of whom are interested in outdoor sports and exploring the natural world, to feel that they are contributing to a cause that is important to them when they choose this brand.
Most consumers want companies to understand that “the bottom line” should go beyond maximizing corporate profits to include urgent environmental and social concerns that affect us all. In the case of Keto or low-carb food brands, making public a brand decision to reinvest a part of your profits into community efforts to promote better nutrition or healthier lifestyles is another strategy to develop a deeper bond with your clients.
These three, simple tips to increase customer loyalty can help a growing food brand to develop a customer core that will serve as a solid financial foundation. Developing a reliable source of income from loyal clients takes away some of the vulnerability when attempting to grow a brand.