MX Bites / January 17, 2024
The key to business sustainability lies in building a solid track record of customer loyalty. In small and medium enterprises (SMEs), especially, one of the structures they have to build early enough is a strategy for customer loyalty, which many may miss from the onset if they are properly informed.
However, the current business landscape has revealed the importance of business intelligence (BI) in generating insights that promote customer loyalty. Embracing these insights is the key to unlocking new solutions that pave the way for increased customer loyalty and a larger customer base. The rest of this article will provide clarity on how business intelligence can promote customer loyalty.
Understanding Business Intelligence (BI)
By definition, business intelligence refers to the technology, processes, and tools that businesses employ to collect, analyze, and present business data in a way that allows for more informed decision-making. It entails the processing of raw data into actionable insights, which help companies recognize hidden patterns and find new information that helps in making strategic decisions.
Though it may cost a lot for SMEs to incorporate business intelligence, it’s worth the investment in the long run.
Importance of Customer Loyalty
Getting customers to patronize your brand is good, but retaining those customers is better. In clearer terms, if 50 customers are currently in patronage and 40 of them are loyal customers while the rest are new, it is better than if there are 10 loyal customers and the rest are new customers. Anyway, this is subjective to how long the business has been running.
Therefore, while trying to build a list of new customers, it’s more important to incorporate strategies that keep them coming back. The following are reasons you should invest in customer loyalty:
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- It saves on the cost of brand marketing. If you can get customers to be loyal to your business for years, it means you are increasing customer satisfaction. The result of this is that your loyal customers will eventually turn to your brand marketer, and over time, your customer base will increase with both new and old customers.
- It’s easier to foresee the growth of your company. The strength of a company lies in the number of customers it is able to satisfy and the number of customers it has grown with over the years. Your customers help you see clearly how much the business has grown and what aspects it needs to develop.
- It improves annual sales and revenue. Research shows that a 5% increase in customer retention can increase profit by over 25%. Because loyal customers have learned to build trust over time, they are more likely to purchase new products and give good reviews that will prompt other customers to buy.
How Business Intelligence Promotes Customer Loyalty
- Comprehensive Understanding of Customers: A deep understanding of customer behavior and needs is what influences customer satisfaction and retention. Therefore, companies can leverage BI to build a 360-degree view of each of their consumers, understanding their preferences, purchase history, and interaction patterns. All these reveal specific details about customers that help to understand their needs, satisfy them, and encourage them to become loyal customers.
- Effective Personalization: No matter how many customers there are, they all want the company to see them individually. Therefore, BI makes it possible for companies to be connected with their customers on a personal level. It makes customers feel important and prioritized. Based on insights gleaned from BI, companies can craft personalized interactions, offers, and communications with customers, which fosters a sense of loyalty in them.
- Anticipating customer needs: Usually, this gives customers the impression that you are thinking about them. For instance, when a customer purchases a set of baseball caps, the company can go ahead and send an appreciation email along with recommendations like tracksuits and other sporting wear. Even if the customer is not ready to get the product at that time, it will create a sense of importance in him and trust in the company. Also, anticipating customer needs involves observing seasons and recommending products that they are likely to use in these seasons.
- Monitoring customer sentiments: Analysis of customer sentiments using BI enables companies to gauge customer feelings and address issues and complaints in real-time. The sentiment analysis also reveals positive sentiments, revealing strong areas companies can leverage to boost satisfaction and improve customer loyalty.
- Measuring and Improving Customer Satisfaction Metrics: One way to keep track of growth is to measure it constantly. BI helps companies measure their customer satisfaction using metrics like customer satisfaction score (CSAT) and net promoter score (NPS), which helps companies keep track of their growth and inform them on ways to improve their performance.
Conclusion
Customer loyalty stems from a deep sense of customer satisfaction. It takes intentionality and prioritization to satisfy customers at their point of purchase, and it takes even more intentionality to keep them coming back. Therefore, to achieve this, companies must incorporate sustainable metrics that keep customers satisfied and, more importantly, build trust in customers enough for them to keep coming back. Customer loyalty cannot effectively be achieved until modern and digital approaches are implemented. Companies, especially SMEs, must embrace this approach to secure a rewarding future in business.
