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The term customer loyalty is used to describe the behavior of repeat customers, as well as those who offer good ratings, reviews, or testimonials. Some customers do a particular company a great service by offering favorable word of mouth publicity regarding a product, telling friends and family, and adding them to the number of loyal customers. Customer loyalty includes much more, however; it is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business.
A company can help build loyalty in some cases by offering a quality product with a firm guarantee. Others provide free offers, coupons, low interest rates on financing, high value trade-ins, extended warranties, rebates, and other rewards and incentive programs. The ultimate goal is happy customers who will return to purchase again and persuade others to use that company's products or services. This equals profitability and happy stakeholders.
Customer loyalty may involve a one-time program or incentive, or an ongoing group of programs to entice consumers. Buy-one-get-one-free programs are very popular, as are purchases that come with rebates or free gifts. Another good incentive is offering a risk free trial period for a product or service. Also known as brand name loyalty, these types of incentives are meant to ensure that customers will return, not only to buy the same product again and again, but also to try other products or services offered by the company.
Excellent customer service is also key. If a client has a problem, the company should do whatever it takes to make things right. If a product is faulty, it should be replaced or the customer's money should be refunded. This should be standard procedure for any reputable business, but those who wish to develop customer loyalty on a large-scale basis may also go above and beyond the standard. They may offer even more by way of free gifts or discounts to appease the customer.