Understanding and Retaining Customers

Customer loyalty can be defined as the customer believing - and, importantly, continuing to believe – that an organisation’s product or service is their best option.

For businesses, it is important to identify a means for taking this concept of loyalty and putting it into measurable terms so that success and failure can be assessed and any increase or decline in loyalty can be tracked.

Measuring customer loyalty is not as simple as adding up the number of purchases made. These figures are important to know, but there’s a far wider picture to consider too, which includes identifying some of the attributes and behaviours displayed by loyal customers, to better understand what differentiates them and work out why this is.  For instance, a loyal customer might:

  • Recommend your services/products to others (often measured by net promoter scores)
  • Purchase other services/products offered
  • Not actively seeking other providers
  • Believe that the services/products are superior to others

Presence of any of the above factors can help gauge the extent of a customer’s loyalty.

Customers will be influenced to stay with an organisation for a multitude of reasons. Maintaining good customer service and making sure that all staff are knowledgeable about products and services is crucial to building customer loyalty. Providing continual support to customers goes a long way to retaining their custom - it makes them feel valued.

What happens if things go wrong?

From time-to-time mistakes may happen. What an organisation does afterwards makes a significant difference to the chances of retaining customers and maintaining their confidence.

When restoring customer confidence, several things should be done. An apology, if something has gone wrong, will go some way to ensuring goodwill and lets the customer know that you care. It is also important to simply be polite as this will give the customer a much better impression of you than if you are indifferent.

Explaining to the customer what went wrong allows you to demonstrate transparency; such a dialogue should hopefully regain and build trust.

It is then crucial to ensure that the issue is resolved promptly. Failure to do so will result in frustration for the customer and perhaps irreparable damage to the relationship.

Should a customer choose to leave, it is important to react appropriately. Where possible, you should establish why the customer has chosen to leave and understand what can be done to encourage them to return.

Retaining customers is a fundamental principle of good business practice. Existing customers are often the most profitable, so investing in their retention is a topic which deserves significant consideration.

For further information on understanding and retaining customers, please refer to the Aviva Development Zone, where you will find a broad range of courses on the topic.

Lisa Powell
e-Learning Designer
RWA e-Learning



About the author

Lisa is an elearning content creator with a Masters in Creative Writing. She joined the RWA team in 2014. She uses her excellent proof reading and writing skills to support her design work on the course creation team. Lisa enjoys the challenging aspects of making learning engaging and simple to follow.

Lisa Powell

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