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Jim Agger
 
April 17, 2015 | Customer Relationship Management (CRM) | Jim Agger

Building customer loyalty

Customer loyalty is a major concept in marketing that not many businesses have a grasp of. You may think you know what makes a loyal consumer to your brand, but many wineries simply gain and lose these customers as the seasons come and go. More importantly, what makes a person loyal to a brand has changed considerably in the last two decades. As marketing becomes a much more personal experience, defining what makes a customer true to your brand is essential. Getting this information right can result in strong sales from your loyal fans.

Loyalty is not retention
When establishing the grounds for customer loyalty, it is important to realize that loyalty is different from retention. While both concepts are similar in how they bring people back to your business, they serve dramatically different purposes, according to Direct Marketing News. Retention is merely the number of people who are active customers.  It is a measure of the number of people who purchase in a given timeframe.

On the other hand, loyalty is a mark of individual behavior. From this, several different are considered: How much wine has been bought overall, how many different wines have been tried at any given time and how often an online purchase has been made, among others. Unlike retention's macro scale, loyalty is a micro set of metrics, for no two customers are alike in their purchasing habits. There is far more granularity in what makes a loyal customer versus someone who is merely purchasing bottles every so often.

When trying to establish loyalty, create metrics that are distinct to each customer.  These can include, what wine has been purchased, how often, average bottle price, total sale price, etc.  Combining the results will allow you to rank your customers by their behavior. 

Getting to know your customers
Once you know what to measure in terms of a loyal customer, what do you do with the information? More importantly, how do you increase the loyalty of a single customer? Creating a relationship with that customer can be a great way to do so. Inc. Magazine suggests getting up close and personal with those who frequently purchase wine is the key.  In fact, one-on-one communication is a great way to move a customer from an occasional purchaser to a loyal customer.  Special treatment such as a complimentary gift that comes with specific milestone purchases is an effective approach as well.

The wine club can also serve as a foundation for loyal customers. However, simply just sending wine at regular intervals is not enough.   Create incentives, such as discounts for regular purchases at the online store, complimentary visits to the tasting room and invitations to special events that would otherwise be inaccessible to the general public. “White glove” treatment makes customers feel special, thereby increasing loyalty and incentivizing to purchase more wine.  There are other ways of bolstering loyalty. If you're on a social network such as Facebook, have an employee serve as a winery social ambassador. This person can then engage directly with customers and they in turn, are likely to share the positive experience.

Active customers have different levels of loyalty.  Once you have an understanding of that, you can move active, less loyal customers into the more loyal category and increase sales in the process. 

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