Increase customer loyalty from the bottom up
Most retail brands tend to view things from the wrong point of view. They insist on pushing cultural changes from the top down, which more often than not result in internal jokes about the higher ups, or a few workshops where culture is being discussed (and soon forgotten). In this text we’ll go through the connections between customer loyalty, culture and the bottom up perspective.
Reading time: About 5 minutes
- Marketing costs and brand mistrust has boosted the importance of customer loyalty
- Creating a thriving culture is crucial to build customer loyalty
- The bottom up perspective is superior for creating work culture
Why customer loyalty is more important than you think
Loyal customers are valuable. More valuable than you may believe. Sure, they spend more. That’s pretty much a given at this point. Several of our studies at Maze, as well several other studies, show that loyal customers spend about 15% to 31% more than regular and new customers. Also, some studies highlight that the life time value for a loyal customer is about 300% higher than for a regular customer.
But spending is not everything. If you ask us, the single most powerful trait of loyal customers is their ability to speak on your behalf. And this is more important now than before, due to two reasons. First, marketing costs have gone up. The pandemic pushed marketing costs to new heights, and the rapid change in rising ad costs, as well as more specialised roles for marketers has also added to this increase. Second, brand trust has declined. People don’t trust brands as they used to do.
Hubspot took a look at brand trust and found that:
- 81% trust their friends and family’s advice over advice from a brand
- 55% no longer trust the companies they buy from as much as they used to
- 65% do not trust company press releases
- 69% do not trust advertisements
- 71% do not trust sponsored ads on social networks
There’s many reason for this dramatic change. One that should be mentioned is the continental shift in digital consumption, as well as a boost in misinformation, the use of personal data and the overflow of branded content. All of these contribute to consumers losing trust in brands. Because of this, word of mouth marketing and sharing shopping experiences between friends are more important than ever before. That is where brands are built, since everyone today trusts their friends and family over anything else when they pick where to shop.
The relation between culture and loyalty
Customers become loyal when they truly love an experience. Well, most of the time. We did some studies and found that the only thing equal to “prior shopping experience” when it came to building customer loyalty, was the location of the store itself. Which of course, is way harder to change than to provide a great experience.
A great work culture that promotes autonomy, well being and streamlined focus, becomes its own living process. A process that affects and brings out the best in the teams without applying external force. It’s quite rare, but it exists at several brands today.
When that happens, the store staff teams take ownership by their own choice of the whole customer experience, and will improve that experience as naturally as ever.
Culture needs motivation
Imagine a group of 10 people. One of them says “I have come to the conclusion that you all should smile today and always greet each other with “Super-Duper-Mega-Friend”. Would that work? Probably not. The fact is that most teams that get told what to do, and also how to do it, start to dislike the orders and furthermore disliking the ones giving the orders.
Cultural change needs true motivation, that most of the time comes from the inside. Another big reason is that the bottom-up (or organic, if you want to call it that) method minimises distance between decision making and decision outcome. If someone 5 levels above your team tells you what to do, they are far away from the outcomes of their decisions. If your team by yourselves makes decisions, you are closer to the outcome and can respond faster. And most importantly, it’s your decision and not someone else’s.
A thriving culture at the workplace in retail is created by empowering the frontline staff to build it themselves, by tracking performance and staying close to the outcomes of their decisions.
A thriving culture that focuses on customer experience is one of the most powerful tools to increase customer loyalty, which is important because brand trustworthiness is decreasing, while traditional marketing costs are increasing.
At Retail Week Live, Bjorklund COO Andre Pedersen is hosting a talk about “How to focus store teams on what matters most” together with Kayleigh Fazan, Founder of The International Retail Academy. In this talk they will dive deep into customer loyalty and the bottom up approach. Don’t miss it.