How and Why you Should Create Loyal Customers – 10 Tips

e-commerceThe Resurg Group research what the most profitable business owners in an industry are doing. With the impact that the GFC had on the Australian Travel Industry it has been fascinating to see how some agency owners managed to contain losses or even continue to improve profitability in their business in recent years.

With a severe reduction in the number of new customers enquires during the research period, our results showed that many of those who have been successful have overcome this negative trend by; 1) improving conversion rates and 2) focusing on building a broader base of loyal customers.

Loyalty = Profit

  1. Repeat Sales

If your customers develop a loyalty to your business, they will be much more likely to choose you over your competitors in the future. Something every business benefits from is a ‘customer for life’ – a customer who will always buy from your business where possible. If a customer for life books a $10,000 holiday with you every year for the next 30 years their ‘lifetime value’ to your business is worth $300,000 in sales.

Although it is vital for any business to attract first time and occasional customers, it is usually much more beneficial to turn the ones you have into loyal customers.

  1. 80/20 Rule

The Pareto principle (also known as the 80-20 rule), the law of the vital few states that, for many events, roughly 80% of the effects come from 20% of the causes. Most businesses tend to find that 80% of their business comes from only 20% of their customers. These are the ‘customers for life’ and loyal customers who purchase regularly.

  1. Word of Mouth

This is the cheapest and arguably most effective form of marketing, where your satisfied customers speak to their friends and family, effectively selling your business to them.  Loyal customers will be much more likely to tell their friends about your business than occasional visitors, even if the service given to both of them is great. Not only do loyal customers spend more, but they can also help bring in even more new customers.

Word of mouth recommendations are extremely relevant in the ‘new travel industry’ where your success is based on expertise and specialization rather than simply processing customer requests. One travel agency is not the same as the next and customers are keen to get a heads up from friends on whether your agency is worth visiting or avoiding.

  1. Cost

Probably the best reason for making (and keeping) your customers loyal are also the simplest: Research suggests that it costs five times more to gain a new customer than keep an old one. Turning just 10% of your occasional customers into loyal customers could save you up to 8% of the costs of gaining customers (Such as: marketing, price offers, staff costs and time, etc…).

Another significant cost benefit is that repeat customers are ‘trained’ customers; they know how to interact with your business quickly and efficiently.  For example a loyal customer will understand that you charge a service fee and provide a great service.  On the other hand, with every new customer you need to explain to them why they have to pay a service fee when they could just go on the net and book it themselves.

Tips for creating & retaining profitable customers

  1. Treat Customers Well

It may seem obvious, but by far the most effective way to make customers loyal is to treat them well. Provide a good service, good value, friendly customer service and deal with complaints as quickly and effectively as possible.

  1. Relationships

One of the key reasons customers become loyal is their relationship with the employees of the business. Friendly and reliable consultants make customers feel valued, and if the quality of service is also good, customers feel a personal tie to the agency.

  1. Complaints

Although they may not seem like it, complaints are actually one of the biggest sources of customer loyalty to businesses.  If a customer complains, or comes to you with a problem, if you fix it quickly and without hassle, they know that they can rely on you, even when difficulties arise.

  1. Communication

Most people do not like receiving ‘junk mail’ but if you show a genuine interest in the satisfaction of the customer without trying to sell, they will usually feel much more appreciated.

  1. Events

There are few better ways to show a customer how much you appreciate their business than to invite them to an event. Inviting customers to an event not only shows the customer how much you value them, they also allow you to spend time communicating with them.

  1. Strong branding and store presentation

Research suggests that customers are more loyal to a business with a strong brand than an identical business without one.


The reasons for focusing on developing repeat loyal customers are endless.  The key is to deliver consistent good service and to have a strategy in place to get your existing customers to come back time and time again.

In the words of Ken Blanchard:

‘If you want to create raving fans, you don’t just announce it – you have to visualise it.  What kind of experience do you want your customers to have as they interact with every aspect of your organisation.’