As the old saying goes, keep your friends close and your enemies closer. This is especially true when it comes to creating loyal customers for your business. While the natural inclination is always to create a point of difference from your competitors, it’s worth remembering that there’s lots to learn from your competitors, particularly when it comes to loyalty.
So what can your competitors teach you about loyalty? It’s true that you need to have the competitive edge but what better way to do this than by learning from those who do it better and improving on those who do it worse.
Begin by gaining a solid understanding of the competition. Who’s doing it right? Who’s letting things slip? The only thing your competition cannot emulate is the quality of your relationship with loyal customers. In terms of building customer loyalty, here are 10 things your competitors can teach you:
1. Learn how to have an effective conversation with your customer
The touch-points of customer interaction are key when it comes to creating customer loyalty. Your competitor might do a better job of this but that allows you to figure out why. Is their comms more customer-friendly? What channels do they use – Direct Marketing, Email, Social, Experiential and what combination? How quickly do they respond to social media comments? Where are they successful and consider implementing those channels with an improved offering.
2. Create a better loyalty rewards programme
75% of US companies with loyalty programmes generate a positive return on investment. Your competitor may have one and it’s working for them. Their churn rate has reduced and customers advocate their product. Look at what they’re offering and figure out how to trump it, not copy it. The easiest way to do this is to determine what your ‘Hero Offer’ will be. All you need is one offer that is unique to you that a customer sees real value in and will be reluctant to leave go when switching.
3. Create a more enjoyable website experience
Your competitor may have a smart website. Rather than seeing that as a threat, see it an opportunity for your business to improve on yours. Images, great design and exceptional user experiences are all part of building customer loyalty. If you invest in giving them beautiful experiences you are showing them that their time is important to you. Make the experience easy for the customer, fill with compelling rewards and they will use it.
4. Focus on rewards that can be redeemed digitally
Carefully selecting the right rewards that appeal to your customer and shows them that you want to provide real value to them continuously. Chances are, your customers and your competitors customers like the same things. If your competitor is offering a reward that seems to be working, don’t be afraid of replicating something similar but improve the customer experience rather than changing the reward for changes sake. Also, customers prefer to be instantly gratified so ditch the voucher downloads and switch to rewards that can be redeemed digitally.
5. Connect with your customer, one on one
Look at how your competitors communicate with their customer. Do they utilize the information they have on their customer to its full potential? Creating a personalised experience goes a long way when seeding reciprocal loyalty. See how your competitors mark special occasions like birthdays, renewal dates etc or how they tailor their rewards offering to their client. If they don’t do this well, it presents an angle for your business to create a point of difference around surprising and delighting your customers.
6. Track how they update and communicate with their customer
Keep an eye on how and how often your competitor communicates with their customers and the style, tone and language that they use. If they do this well, chances are they are using their customer data effectively which could give you some insights into what works and opportunities to improve.
7. Offer a better customer care experience
We all know those companies who offer a bad customer experience but there are now more and more companies are realising that the best way to show customers you care is to improve your customer service and feedback loops. Look at how your competitor reacts to customer queries. Are they responding quickly and authentically to their concerns? If so, you need to ensure a similar experience but improve on that by making more platforms available for your customer to tell the world why they love your company and why.
8. See what they’re tweeting about
Check to see what tweets are picking up traction from your competitors. They’re in the same industry so people who are following them will follow you, too, and that means you can use the metrics from your competitor to figure out what are the most effective tweets to make. Do your readers want news or opinion? Do they want rewards or promotions?
9. Produce better content than your competitor
One size does not fit all. If all of your social media, email and other engagement marketing focus on selling to prospects, then it’s not likely to be engaging, educational or motivational to customers. Is your competitor doing it better? Creating better content doesn’t mean something that’s written better. Instead, it means that you need to produce optimized webpages with copy that will cater to both search engines and consumers. This helps your business rank higher on Google and keeps your business a step ahead.
10. Look to the future
Businesses that plan for growth tend to be more progressive. Keep up with developments both in your sector and amongst your competitors, follow consumer trends and invest in new technology to ensure that your business is well positioned to build and maintain customer loyalty into the future.
All this comes with a health warning. Your competitors can teach you about loyalty but you mustn’t let them become a focus when developing your own business. Michael E Porter’s Five Forces Analysis says that any business with intensity of competitive rivalry pushing against it will be hard-pressed to make economic headway. It’s the businesses that welcome competitors into the market, learn from them, rethink their roadmaps and put customers first will ultimately win.