October 25

3 Ways to Build Customer Loyalty: How To Always Get Customers To Choose You Over The Competition

Believe it or not, the best strategy to build customer loyalty and get customers to choose you over your competition has nothing to do with price.

Now you may lose to your competition because of price, but that is only because you are not offering your customers anything else. You are not giving them a reason to choose you — In other words, you taking steps to build customer loyalty.

Customer loyalty is defined by Gartner as the degree to which a customer is likely to continue doing business with an organization – and as you will see, it goes much deeper than offering the lowest price.

Are You Selling What Your Customers Want To Buy?

Just last week, I was meeting with a CEO whom I coach. Now, many of my clients know that I used to work in the financial services industry, so often they will ask me questions related to banking or financial services. I am always happy to help.

This CEO was getting ready to purchase a new building where he planned to move his headquarters. He was looking at loan proposals and had narrowed it down to two. He asked me if I would take a moment, review the proposals and give him my opinion.

Again, I was happy to help, as consistent assistance is one of the ways to build customer loyalty.

One proposal offered a much lower interest rate, required no appraisal and waived the closing costs. The other required an appraisal, had a slightly higher interest rate and had a processing fee for closing. After looking closely at both of these proposals, I turned to my client and said, if it were me, I would take the one that is slightly more expensive.

Now you can imagine, my customer looked at me like I had lost my mind, and was probably wondering why he hired me to be his coach.  But before he could object, I spoke up and offered my reasons.

I said, “Paul, I know this other deal looks better on paper – no closing costs, no appraisal and a more favorable rate, but let’s dive a little deeper. Both of these loans have a five year call, and I am guessing that you want the full 15 year amortization to pay the loan off, correct?” He said yes.

I explained that this lower fee bank had been merged or acquired three times in the last six years, and the chances they will be the same bank with the same rules when your loan comes due are slim. Also, this young man making you the loan is barely 25 years old – do you think he will still be your banker in five years? Also, you know no one in leadership or anyone else in this bank if you need help or support. And lastly, why would you buy a $1.5 million building without an appraisal. Every lawyer in town will tell you never buy property without verifying how much it is worth.

I went on to explain that I would choose the other bank, knowing full well that I would pay more because they had been the same financial institution for more than 100 years, the banker and the leaders all the way to the CEO are people I know and requiring me to do an appraisal is just smart business. And I like to work with smart business people.

John went on to do the loan with the latter bank.

Now why do I share this story? It's because the right decisions build customer loyalty. 

If you are going to build customer loyalty and thrive in uncertainty, you have to be selling what your customers need whether they ask you for it or not. In other words, you have to sell the risk and value. This means ensuring your customers know the risk if they do not do business with you, and the value they gain from choosing you over the competition.

3 Ways To Build Customer Loyalty and Get Them To Choose You Over The Competition

Choose The Right Target Market

First and foremost, to build customer loyalty, you have to choose the right target market. Focus on customers and prospects that value what you have to offer.

Understand the Risk and Value

You have to be sure you are clear on the risk and value. Just like the example you just read, the bankers thought the value they were adding was a loan, when really it was so much deeper than that.

Sell It No Matter What

To build customer loyalty, remember it's not the customer’s responsibility to know what you have to offer; it's your job to communicate that. Just like in this case, the customers think every loan and every bank is the same. You need to help them understand why working with you is a much better option.

Remember, to build customer loyalty, you must make it clear that you offer more than just competitive prices. If you can help them understand the risk and value, they will choose you over the competition every single time.

Meridith Elliott Powell

Voted one of the Top 15 Business Growth Experts to watch by Currency Fair, highly engaging corporate motivational keynote speaker Meridith Elliott Powell delivers a cutting-edge message, rooted in real-life examples and real-world knowledge. Meridith’s presentations are full of powerful content, highly interactive, and fun. She helps her clients learn the leadership development, sales and business growth strategies to turn uncertainty to competitive advantage.

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