Episode 76: The Importance of Customer Loyalty in Times of Economic Uncertainty: Strategies for Collecting Data and Improving Customer Experiences
Building Customer Loyalty in Uncertain Times: Data-Driven Strategies for Success
In times of economic uncertainty, small businesses need to prioritize customer loyalty more than ever. It's not just about retaining existing customers but also attracting new ones through positive word-of-mouth and recommendations. To achieve this, small businesses need to understand the factors that drive customer loyalty, collect data on consumer attitudes and behaviors, and improve customer experiences.
Factors That Drive Customer Loyalty: Customer loyalty is built on trust and a positive customer experience. Customers are more likely to remain loyal to a brand that consistently provides quality products or services, excellent customer service, and a hassle-free shopping experience. Additionally, offering incentives, rewards, and loyalty programs can also help build customer loyalty and encourage repeat business.
Collecting Data on Consumer Attitudes and Behaviors: Collecting data on consumer attitudes and behaviors is crucial to understanding what drives customer loyalty. Surveys, feedback forms, and social media monitoring are effective methods of collecting data. By analyzing this data, small businesses can gain insights into customer preferences, identify areas for improvement, and make data-driven decisions.
Understanding the Customer Journey: The customer journey is the process that a customer goes through from initial awareness of a product or service to becoming a loyal customer. It includes several stages, such as awareness, consideration, purchase, retention, and advocacy. Understanding the customer journey is critical for small businesses to identify opportunities to improve customer experiences and drive customer loyalty.
Improving Customer Experiences: Improving customer experiences involves several factors, including offering quality products or services, providing excellent customer service, and optimizing the buying process. It's also essential to personalize experiences and engage with customers across multiple touchpoints, such as social media and email marketing. Providing incentives and rewards through loyalty programs can also enhance the customer experience and encourage repeat business.
Here are three actionable takeaways for small businesses to prioritize customer loyalty:
Collect data on consumer attitudes and behaviors to gain insights into customer preferences and improve customer experiences.
Understand the customer journey and identify opportunities to improve customer experiences at each stage.
Offer incentives and rewards through loyalty programs to encourage repeat business and build customer loyalty.
In times of economic uncertainty, small businesses need to prioritize customer loyalty to drive growth and ensure long-term success. Understanding the factors that drive customer loyalty, collecting data on consumer attitudes and behaviors, and improving customer experiences are essential for small businesses to achieve this.
By implementing these strategies, small businesses can build trust, encourage repeat business, and attract new customers through positive word-of-mouth.
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Podcast Transcript:
Kiva Slade 0:01
Welcome to Collab with Kiva, where we let our inner nerd geek out on all the non sexy parts of your business. I'm talking data and operations. Neither as flashy or glamorous, but both are foundational to your business growth. I'm your host, Kiva Slade, your strategy and analytics guide here to break down what feels complicated. So it is understandable and executional. Let's dive in. Hello, and welcome to another episode of Collab with Kiva. I'm your host Kiva Slade. Today, we're going to talk about the importance of customer loyalty in times of economic uncertainty, strategies for collecting data, and improving customer experiences. And yes, that was a mouthful, but I promise you, we're going to break it down in a way that makes sense and has some actionable takeaways for you. So the reason I want to talk about this, I was reading an article and it was talking about Denny's, the fast food restaurant is it considered fast food, whatever everyone knows who's what Denny's is. And one of the things we talked about was Denny's was transforming their customer engagement. And one of the ways that they were choosing to do this, they partner with some larger companies, all of these different things. But it was really about point of service, like their software that they were using for that as well as your digital wallet, and a CRM.
Kiva Slade 1:42
And the reason they felt to do this was they wanted to create, even more customer loyalty, and maintain that customer loyalty that they've already had in existence. And the reason being was they felt that utilizing more so leveraging that like intelligence and data driven marketing that they had at their disposal, they were hoping to use those real time insights to drive what they were calling a frictionless and digital first customer experience, making it easier for customers to earn rewards and receive personalized offers, and that this new kind of engagement ecosystem was live now in their 1600 Plus locations. And they felt that personalized experiences are key to building in nurturing lasting relationships with their Denny's guess. That's like, Wow, that's pretty interesting. Obviously, as small business owners, we are not Denny's, we do not have the capacity to invest in point of service middleware and digital wallets and CRM applications. However, many of us do utilize CRMs. And we have other tools at our disposal and our fingertips, in which we can actually replicate some of what Denny's is doing for our guest. We're gonna use that term. And so one of the things that I thought was really interesting was one of the companies they're partnering with, it's called spark fly. And Catherine Tabor, who's the founder and CEO says, In times of economics uncertainty, it is paramount that businesses prioritize customer loyalty and recognize it as a key growth driver. And that leveraging, technology, delivering personalized rewards and engagement programs, companies like Denny's could deepen customer relationships and create more meaningful and lasting connections. A customer first approach is essential for success in any market condition. And that's something we've talked about previously, when we've talked about recession in how to bounce back from that or to even just deal with that. But I think it's also important to have that mindset all throughout the year, all throughout the lifecycle of your business, because it's just sound business.
Kiva Slade 4:13
So I want to welcome you today, again, to the podcast. And again, really just starting with that idea of Denny's in understanding customer loyalty. What is that? And especially for us as small business owners, let's be realistic customer loyalty is critical expecially during these times where things might feel a little iffy in terms of economics, security. And so customer loyalty is the degree to which your customers are willing to repeatedly purchase from you or some other particular business as opposed to choosing a competitor. And all of us have competitors, even those who, those of us who say, oh don't have any competition you do have competition. Okay, so there are several factors that contribute to customer loyalty, including a positive customer experience, quality products or services, and excellent customer service.
Kiva Slade 5:12
And the benefits of customer loyalty obviously include increased revenue, customer retention, and positive word of mouth marketing, all very important things as we run our businesses. And that's something that Denny's was really looking to build upon. And I think about that in my own life and existence in the sense of Facebook, I get tons of shoes, ads, clothing ads, y'all know some of my likes now. But when I look at some of the things, I'm, I don't, I don't know what my experience is going to be with a person, a company that I've never purchased from. So I look at customer reviews. And then if there's customer reviews about totally different product than the one that I'm looking at. I'm like, oh, that sounds kind of sketchy. Or if the price is one that I'm like, I don't know, is that good quality? Is that going to last? So what do I do? Sometimes I go and look and see, do they also sell their products on Amazon? Can I see there if there's some additional customer reviews. And if it just continues to take too much time, and I'm not completely sold on it, I just go to stores that I would normally shop at and why? Customer loyalty.
Kiva Slade 6:33
I'm going to go back, I'm gonna get something because I've had a good experience. I've gotten quality product or service, and I had great customer service. Recently, there was a post on the next door app in my area. That's a whole nother conversation for another podcast if we talk about next door, but it was looking for a restaurant suggestions because they had some friends coming in town and things. The one I shared is one that I go to, why do I go there, the customer experience, from the time that you make your online reservation to the time that you go in and how they just treat me and my Gluten Free allergy is totally acknowledged and I get special bread instead of the crackers and this instead of that. It's always a great time. And the one time that I went there one time, where the kitchen was a bit backed up things were a bit slammed, it was also doing Restaurant Week, Stupid me for making reservation during that time wasn't aware. And they felt obviously bad because we waited a little longer for our entrees, the normal. We were calm dessert in a few other items. So again, excellent customer service. Those are things that make people want to come back, I am positive word of mouth marketing for them, trust me all by myself.
Kiva Slade 7:57
So, once we understand what that customer loyalty is, and for many of us, we already see it. We see it in the form of referrals, we see it when people we've worked with actually refer us to someone else who wants to work with us. You see it also when just you may have actually worked with them. But the feeling they got from that discovery call and you guys determined that you weren't a good fit necessarily. They still tell other people about you. You're like where you came from who had no idea. So that's all great stuff. So now that we got that customer loyalty part down, let's talk about the second part, which is really the collecting the data. We want to collect data on consumer attitudes, preferences, behaviors, like those are all things that Denny's is capturing. And as people who have to market their businesses, those are things that we need to have access to, so that we can still thrive in the midst of a recession. And so collecting that data on your consumers, their attitudes, their preferences, their behaviors, all of those things are important to help you better understand customer loyalty, like what exactly is it that your people are interested in are not interested in. And there's this data can be collected in so many different ways. And it's important to realize that as data privacy regulations just continue to proliferate. We thought GDPR was one thing. Heck in the US, we have five states with different laws and who knows how many are coming down the pipe. The reality is you want to start focusing on what's called first party data. You want to get it straight from the horse's mouth, ie your consumers.
Kiva Slade 9:39
So what's some first party data ideas that you can utilize surveys, customer feedback forms, monitor social media, things that are happening? What are people saying about you about your brand about your work about your services? Those are all things that are first party data and it does not have to apply to a lot of the same data privacy regulations because you're not using a cookie. Even though cookies are tasty, you aren't using a cookie to get this information from them. People on your email list, everybody in their mama tells you build an email list, build an email list, build an email list why? And that was an email list. That was email lists. They tell you this for that certain purpose that you can directly connect with those people. You can ask them questions, you can segment your audience, you might look someone like myself, I talk about operations, I talk about business analytics. Well, most times I think people should want to hear about both, but maybe they don't. So I can ask them. What is it that you're looking to hear about? And they can tell me, I can use that data? And so it's important for you to realize, what kind of things can you start picking in start collecting in your your data toolkit for you to have access to this information? So where do people find you from? That's available to you, assuming you have like Google Analytics or some other analytic platform installed on your website. In most of you have a website, you have a privacy policy that's listed on there. If not, go check out the episode of Nicole Sherry Odin, she will drill it into your head, you have a website, you need a privacy policy to go together.
Kiva Slade 11:28
So think about those things. How can you get additional information from your people finding out what it is that they like? How do they find you? What do they use to find you? What kind of terms are they utilizing Google Search Console will let you know some of that, letting it you know, connecting it, making sure it's connected with your website, and then obviously, your Google Analytics for so that you can have some understanding of oh, so when people type in blah, blah, blah, they wound up coming to me, that's where that SEO comes in handy. So these are things that you want to start doing if you're not doing so that you are actually collecting data points about your consumers, those people who are your customers, you want to get things that are directly again from them, because people are going to lean into the brand loyalty that they've already established with you. Okay, if some other store came on the block, and they were like, Hey, come shopping. I was you're like, No, I'm going to target. Why because there's brand loyalty where target, you're like, I go to Target. I know what I'm getting, it's tried. It's true. It's it's what it is. For those who, depending on your age Nordstroms like Nordstrom had a reputation. They would take back anything. Absolutely anything. Some instances, people took back stuff to Nordstrom that Nordstrom has never even sold them in the first place. We're not going to talk about those Jade Enos behind that. The point of illustration is Nordstroms was known for No Hassle Returns, okay, hey, you want to bring it back to us? Go ahead, we'll take it back. And that was something that was like, people love that. They didn't have to go in there with a song and a dance. And well, I don't have my receipt and data data. No one needed that it was Nordstroms. You bring it in? And they were like, Oh, yep, we got it. Thank you. Here you go. And that was something that Nordstroms, built themselves on was this amazing customer return policy, that was pretty mind blowing in some instances.
Kiva Slade 13:38
So you want to have that understanding of what are those attitudes as preferences as behaviors. And for anyone who's running ads and things of that sort, it's getting harder to do that. Google's doing away with cookies completely in 2024. Okay, Facebook has removed some of the more detailed targeting. So we're really going to have to do a better job of understanding those psychographics as well as demographics of our audience. And a lot of that is going to come from you collecting first party data. You can have people send out a survey to your email list. So they can choose different age ranges. So you have an understanding, or you can look at your Google Analytics for which would let you know, what are the age ranges for people who are coming to you? Are you talking to Gen Xers? Are you talking to millennials? Are you talking to Baby Boomers? Who are you talking to Gen Z. This is all super helpful. And also, again, understanding where they're coming from. So you want to lean into that and you want to keep that in mind. Another thing is understanding the customer journey. Okay? To understand customer loyalty, you have to understand that customer journey, which goes back to having some of that first party data, but there's other ways that you can also understand the customer journey which depending on which customer journey Do you ascribe to? It starts with awareness. Okay, it starts with awareness. Where are people becoming aware of you whether that's a social media platform? like LinkedIn, Instagram, Facebook, Tik Tok. Whatever else I'm forgetting at this point, but Twitter, um, these are all workplaces in locations where people can become aware. And they move from awareness into consideration. So I'm thinking about buying I'm not 100% sure yet, though. So I might sit in that consideration phase for a little bit until I'm ready to purchase. And then depending on product services, all the things once that purchase, is it one and done? Is it something that continues to go on? It's something that's cyclical, that they need to come back to? What exactly does that look like for you.
Kiva Slade 15:59
But there's also that retention. And that's just what it is retaining that's keeping these people in some way, shape, fashion, or form, do they stay on your email list, or after they get something from you or they done and there's no other forms of communication with you, you want to make sure that you're retaining them in some way. So if you have a one and done a VIP day, what is the VIP day Is there anything else from that, that they will need to maybe possibly circle back to you, in six months, a year, two years, I recently did a VIP day to have some new web copy, I might be finished for a while I might need to circle back in two years, I might need to circle back in three years that bending. But that, that this particular person that I worked with, also has a membership where they talk copy and different things like that, well, I'm that could be interesting, if that's something that I want to take on.
Kiva Slade 17:02
So thinking about ways in which to retain, and then there's advocacy, that's when they start doing the talking for you. Okay, they're telling other people about you, they are truly that they're advocating for you. They're saying your name and room that you are not in. And so those are different stages of a customer journey. And as a small business owner, you want to be collecting data along each of those. And just like it's a funnel, quite honestly, so at the top awareness, huge. And as we come down from awareness to consideration, purchase retention and advocacy, it gets smaller and smaller and smaller, because everyone who becomes aware of you is not necessarily in the market to buy whatever it is that you have. So therefore, the amount of people moving from awareness to consideration, you're going to obviously see the difference, the amount that moves going from consideration to purchase smaller purchase to retention, smaller to advocacy. So there is a process to this, however, again, you want to start collecting data along this process, how do they first become aware of you? How long are they on your email list or in your orbit of some way shape, or fashion or form, before they actually go to consideration or to purchase. And you can then make some educated guesses of how long your buying cycle is, from that time someone comes aware of you to that time that they give you money.
Kiva Slade 18:31
So something to think about is understanding your customer journey. And the last thing is, I really want you to understand that as you go through this, as a small business owner, I get it, there's a lot of stuff that you need to do, trust me, I know. But in all of that lots of things that you need to do, you do need to become more data centric. As you continue to grow. There are things that you might have had access to in the past that you are going to start no longer having access to. And you're going to want to need to all of those things in terms of using data to be more informed about the decisions that you could and should in many cases make in your business. So I want you to start with these three action items. There's three, there's not going to be complicated.
Kiva Slade 19:33
I want you to conduct regular customer surveys to collect data on your app that consumer attitudes preferences in their behaviors. poll your audience, people talk to them. They've allowed you inbox access, prime real estate, get in there and have conversations. Two, map out your customer journey. What is the journey that people take to buy With you, there's different ways that you can do this. Obviously, in an intake form, you can ask, how did you hear about me? Okay, you can ask the questions. The VIP day I recently did. She asked how I heard about her, I was referred to her by another person. And she knows that that particular person is what an advocate for her, and they are saying her name and referring people to her. And, okay, from the time that that happened to the time that I booked a call. Yeah, really short sales cycle, I'm just gonna say, but it also had a lot to do with that referral, I totally trusted the person that I asked. And so when they gave me this referral, I did my own little research, had a quick discovery call with her. But I was like, I like her. And I want to go forward with this, but map out that customer journey, because some other questions that she asked, in one of the follow up surveys was really around.
Kiva Slade 20:59
What were some takeaways from our work together? What were some things that I liked, what were some things that I didn't like, even in her process of onboarding me? And that's, again, part of the journey, because if she asked those questions of people who booked with her and who do not book with her, or pay her and don't pay her, she actually gets just start to understand. These are things that made people who paid me money, this is some of the things, these are some things that people who did not pay me money, okay, what can I change in here, and it's, don't get me wrong, there's some times you're not going to change anything, it could have been the price, they're not ready to invest, they just didn't like you, those things do actually happen. And that's okay. But when you start having some data behind it, you can start to say, okay, these are my people, and anyone who kind of comes that's a little bit outside of this particular person, persona. They're, they're less likely to buy with me, and I'm okay with that. So, you want to collect data at each stage, so you can better understand customer behavior, and improve that customer loyalty. Remember, you're being your own version of Denny's . Okay, you're making it so that people are going to get what they're looking for to get from you. And Denny's even took it a step further, let me pull back up the article. But I mean, they really want to customize their marketing initiatives and promotions, to cater to each guests unique needs, tastes and behaviors, Denny's will improve the impact of their campaigns enhance guest engagement and drive company wide performance, like, whenever I tell you people, marketing is totally connected to what operations driving company wide performance because they're going to use this data in order to do that. So their marketing initiatives, though, and promotions are going to be catered.
Kiva Slade 22:52
So if you go to Denny's and you only order off the gluten free menu, Denny's is not going to start sending you stuff about nine gluten free items that they have. Why? Because it doesn't make sense. Maybe you go and you don't eat meat. And so everything that you order is always vegetarian, or you know, whatever. Denny's is like, you don't eat meat, do you? And they're gonna start telling you the things that they have specials that are just for you that aren't involving meat. So map out your customer journey. What are those things that the steps that people take in the process of getting from, hey, I understand her and words she does, oh, this sounds like a problem that I have that she can possibly solve. I have a conversation with her. I pay her money. She says my problem. What are those steps? And how do people take them. And the last one is really around actually, that's it.
Kiva Slade 23:52
There's two, two actionable takeaways, because I want to make this super, super, super, super, super simple. So again, conduct regular customer surveys to collect data on your consumer attitudes, preferences and behaviors, and to map out the customer journey. So you can start to better decide what data points you need to collect at each stage of the journey. So remember, customer loyalty is critical for small businesses like do whether we have economic uncertainty or not. It is important that we encourage customer loyalty. So do your best to start collecting data if you are not on attitudes, preferences, behaviors, anything that you can better understand those people who are your people, and how they become paying people in your ecosystem. And prioritize that customer loyalty, take action to improve your customer experience. Because again, you're going to buy from the thing that person the entity that you know is going to be or has been consistent with delivering the goods. So whether it's Amazon, Apple, Target, Denny's, you have those people, those companies, where it's like, I know what I'm gonna get when I engage them for a product or a service, and you want to have that same level of consistency in your business.
Kiva Slade 25:22
So, thanks for tuning in to this episode of the collab with Cuba podcast. I hope you have found it informative and actionable with only two steps. So if you have some experience, and you want to share your tips for improving customer loyalty, definitely reach out to me and share them. You can find me on LinkedIn, and I'd love to hear them. So tune in next time. Bye. Thanks for tuning in to another episode of Collab with Kiva. I'm wildly cheering you on as you go forth and execute data and operational efficiencies in your business. If you need additional support, connect with me via my website, the516collaborative.com. Your reviews on Apple are appreciated. See you next week.
Meet Kiva Slade - the Founder and CEO of The 516 Collaborative. With a unique background in high-power politics on Capitol Hill and sixteen years as a homeschooling mama, Kiva found her calling in the online business world as a trusted guide for entrepreneurs looking to build the business of their dreams.
Kiva's work began behind the scenes, orchestrating the back end of businesses and managing teams. But her inner data diva couldn't help but notice that small businesses needed help harnessing the power of data for growth. So she and her team set out to uncover and tidy up the data required to enable clients to grow their businesses confidently and easily.