The crucial importance of customer loyalty

The companies that outperform have all achieved a very high level of customer loyalty. This is easy to explain… but achieving a truly high level of customer loyalty takes time, determination and solid action.

Customer loyalty is a key issue for modern businesses. According to a Harvard Business Review study, a 5% increase in customer retention can boost profits by 25% to 95%.

This profitability of companies with ‘loyal’ customers is largely explained by the very high cost of acquiring new customers. According to a study by Bain & Company, attracting new customers costs between 5 and 25 times more than retaining existing ones. It is therefore essential to maintain a loyal customer base in order to reduce acquisition costs. This is corroborated by the consultancy Temkin Group, who have shown that 86% of consumers with a positive experience will buy from a brand again, while for those with a negative experience, only 13% say they would buy a product or service from the brand again. (Marketing Evolution Report, 2021)

Fidélisation client

Customer loyalty can drop very rapidly

This is especially true since the quick spread of negative reviews can damage a company’s reputation and deter potential new customers. A dissatisfied customer shares their negative experience with around 15 people on average, while a satisfied customer only tells around 6 people (Source: American Express). In 2017, for example, a video showing the mistreatment of a passenger by United Airlines staff made the rounds on social media. The incident caused widespread outcry and led to a sharp drop in customer satisfaction. United Airlines lost thousands of customers and saw its market capitalisation fall by several billion dollars. A growing number of companies are aware of the need for customer satisfaction. At the AFRC Meetup in June 2023, Rami BAITIEH, CEO of Carrefour France, said: “The customer is the alpha and omega of the company. Some companies, but not all, make this statement a reality. These are the ones that outperform. At Carrefour, we never have a meeting without our customers. When we have to make an important decision where we’re hesitating between financial, operational or production imperatives, we ask one of the participants in the meeting to take on the role of the customer. And it works.

Two key factors for maintaining a high level of customer loyalty

Yet customer service plays an essential role in building customer loyalty. According to the Observatoire des Services Clients, Customer Service is the number one contributor to Customer Experience, at 52%, compared with only 32% for the purchasing process and 16% for brand power (2020). Two factors are key to this success: efficient staff and high-performance equipment.

Competence and motivation are the keys to effective teams. There are many ways to improve them:

  • Training and skills development: investing in the ongoing training of customer service agents enables them to acquire the skills they need to resolve customer problems effectively and with empathy. This helps to increase customer satisfaction and loyalty.
  • Recognition and rewards: recognising the outstanding performance of customer service agents can boost their motivation and commitment to customer satisfaction. Reward programmes based on results and positive customer feedback can create a service culture focused on loyalty.

The best customer service software includes AI assistants

It is also vitally crucial to equip contact centre agents with the right tools, starting with software that enables them to organise and structure their responses. Good customer service software allows you to centralise customer information and track their requests and preferences. This enables agents to provide fast, personalised responses, improving the overall customer experience.

Customer service software also makes it all the easier to automate repetitive tasks. This frees up teams to concentrate on higher value-added activities. This can include proactively identifying customer problems and implementing preventive measures.

Lastly, the best software is now equipped with AI (Artificial Intelligence) virtual assistants, which provide numerous advantages. AIs respond to the simplest requests and direct the most complex ones to the appropriate agents. They provide them with summarised information about the request, for instance the topics that will be discussed during the conversation, which in turn empowers the advisor to prepare his or her response. They also provide essential information: the customer’s feelings. This means that the agent can prioritise responding to irritated or frustrated customers.

In the last few years, the world of customer relations has been changing at a very rapid pace, and nothing seems to be slowing it down. However, one truth remains unchanged: customer loyalty is key to business development, and loyalty stems from satisfaction!