7 Tested Ways to Build Customer Loyalty [2024]

What is Customer Loyalty?

Customer loyalty measures a service business's ability to gain repeat business from old or existing customers.

Businesses with loyal customers learn to build long-term customer relationships, translating into a steady stream of new customers from referrals.

Also, loyal customers are more likely to leave positive online reviews, give testimonials, and engage in brand advocacy. This increases your credibility in the eyes of potential customers, who will be more likely to book your services or visit your physical location.

Why is Building Customer Loyalty Important?

Building customer loyalty is important for the following reasons:

• Drives repeat purchases: Working hard to deliver excellent customer service results in happy customers. And happy customers will book your services again and again.

This increases your customer retention rate and lifetime value.

• Brings in more revenue: The consulting firm, Bain & Co., found that loyal customers spend 67 percent more than new customers.

This should come as no surprise. A new customer must overcome a huge trust barrier when patronizing a service provider for the first time.

In contrast, a long-term customer already trusts you since you’ve previously met their expectations. So, they're more eager to dip into their pockets to pay for upgrades, maintenance contracts, or membership programs.

• Reduces expenses on marketing campaigns: A significant part of the budget of every home service provider goes to customer acquisition.

That amount is usually very high when a business fails to keep a large percentage of its previous customers.

Fortunately, you don't have to spend so much on acquisition when customer loyalty is high. Your retention rates will stay up while churn rates will remain low.

• Boosts word-of-mouth marketing: Loyal customers are the best ambassadors you can have.

They'll promote your business to their friends, family members, and neighbors for free.

That’s good news for you since customers prefer to buy based on recommendations from people they know instead of brand advertisements. 

Now, to the heart of the matter.

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How to Build Customer Loyalty

Here are some strategies for building customer loyalty that we’ll cover below:

Let’s take a closer look at each one.

1. Create a customer loyalty program

Customers may naturally become loyal to a business. But loyalty programs give them more reasons to stay.

Loyalty programs offer repeat customers perks like discounts, gifts, and redeemable points to repeat customers. This makes them feel appreciated and incentivizes them to keep coming back.

It's also a great way to measure customers' emotional connection with your business since 65 percent are willing to join loyalty programs for brands they love.

Important note, however: Only set up your rewards program after first investigating what your customers love. This ensures you use a reward that will entice customers to join your program.

You can do that by surveying old customers, engaging them in discussions, and looking at rewards programs from other companies in your industry.

Also, take some time to train customer success representatives (CSRs) and technicians to promote the program to customers. You could even create a sales script for them to follow.

Lastly, it's important to remember that having loyalty programs doesn’t guarantee that you'll have a loyal customer base. 

That only happens when you pair a great loyalty program with exceptional customer service.

That brings us to the next point.

2. Provide the best possible customer experience

If there's one thing that puts off customers from a business, it's a bad experience.

In fact, over half of the people in a recent survey said they'd switch to another brand after only one bad experience.

Now, here’s what you might not know:

Customers start evaluating you from the moment they call you. So, delivering a great customer experience starts the moment they contact you.

Does your customer support staff answer quickly or leave them hanging? Are they attentive to your customer’s needs?

What of the technicians—do they take too long to get to the customer's location?

These things might seem small. But the little things matter regarding ensuring your customers have positive experiences. Also, train your employees to talk to customers clearly.

According to Ian Goldberg, president of the commercial division at Frank Gay Services, “[the customer] wants you to call and walk them through what that solution is, so by the time you're done with the explanation, they kind of nod and just give you the go-ahead…”

To take things further, communicate with customers at every step of the process. Tell them when a tech is approaching their location and give them an estimated time of arrival (ETA).

To do that, you could use ServiceTitan’s Customer Experience software.

With it, you can remind customers about their appointments and send over a brief tech description before they arrive.

This builds a connection between the tech and the customer and makes it easier for them to engage in conversations.

That's not all.

ServiceTitan's Customer Experience software allows you to communicate with customers through any channel of their choice, including SMS.

It also allows customers to track the real-time location of techs.

This encourages the technician to arrive on time and avoid unnecessary detours, knowing the customer is watching their every move.

3. Encourage customer feedback

One way to build brand loyalty is to seek feedback from customers repeatedly.

Customers are the best people to tell you the quality of your service and pinpoint places for improvement.

Mind you, negative feedback is as important as positive responses.

Why?

It allows you to turn a disgruntled customer into a loyal one. 

Also, allowing a one-star rating to linger is not a good idea since 87% of consumers use Google to assess and pick a local business.

How can you encourage customer feedback or reviews?

Maintain an open communication channel with customers.

For reviews, encourage technicians to verbally request customers to leave online reviews on your Google My Business or social media pages. 

Managing the review process can become a tad harder with time, as your customer base increases and more people write reviews about your business.

Technicians may forget to tell the customers. You may leave several negative online reviews unanswered. And as a result, your online reputation will suffer.

In a recent webinar, Sarah Ghirardo, a former director of digital marketing for a large HVAC company in California, revealed that she faced the same issue. 

Luckily, ServiceTitan came in handy. "It was just an automatic review notification to the client, and it really pushed our reviews up,” she says.

ServiceTitan's Marketing Pro Reputation feature automates the entire review process.

Once a tech finishes a job, the system automatically delivers a review request to the client.

This is a smart strategy for maintaining customer engagement and increasing the odds of a positive review since customers are more likely to share their thoughts when the experience is still top-of-mind.

ServiceTitan's Marketing Pro Reputation feature also collates all reviews from Google, social media channels, and review sites into one central location.

You can answer all reviews from the central dashboard and set up a notification for negative reviews.

This allows you to act fast and remedy the negative situation before it worsens.

Pro tip: Using offline channels is advisable to reach out to customers who leave negative reviews. 

This keeps your competitors from discovering your slip-up and proves you’re serious about solving the customer’s complaint.

4. Offer different payment options

The current economic climate is filled with uncertainty. 

A customer who might have paid upfront for a $1,500 repair before can't do so now because they’re cash-strapped or want to save costs.

One way to adapt to this reality is to provide flexible payment options, like financing. 

Experts like Mike Barnhart, Chief Financial Officer at The Eco Plumbers, and Darius Lyvers, Chief Operating Officer at F.H. Furr agree with this:

“Right now, financing is probably more important than ever,” Barnhart says. “It seems like there’s a lot of uncertainty, whether you’re talking about economics, Covid, politics…"

For Lyvers, “[providing financing options] is one thing that I can preach to every small business that does not have strong cash flow. 

“[F.H Furr] 100 percent wins jobs because there are a lot of smaller shops in our area that don’t offer financing.”

Another way to offer different payment options is to make good-better-best service tiers a part of your sales presentations.

This way, customers can pick a service tier that fits their budget rather than leaving you because they can't afford your services.

However, incorporating financing and offering different service tiers can be difficult, especially for on-field techs.

For Lyvers, educating techs, keeping track of paperwork, remembering logins, manually calculating the cost of plans, and promoting them to customers was a big challenge. 

But it all became a thing of the past once they started using ServiceTitan’s Customer Financing feature.

Their sales tickets grew astronomically. “We’re getting $4,000, $5,000, $6,000 jobs through our service departments,” he says.

ServiceTitan's Customer Financing feature helps technicians present plans in a way clients can easily understand.

Also, the system approves every financing application as soon as possible.

To personalize it further, ServiceTitan displays the approval message using customer data saved in your customer relationship management (CRM).

Also, techs no longer need to calculate minimum payments manually. 

The system automatically calculates the amount and allows you to set custom rules based on the business unit and ticket size. This ensures your bottom line doesn't suffer as you try to help your clients.

We recently helped F.H. Furr set up their financing process. Here’s how we did it.

5. Show customers they are more than just customers

For a customer to be loyal to your business, you must connect with them on a deeper level.

When they speak with you, it should be like a conversation between friends. One way you can do that is to deliver a personalized customer experience. 

Encourage employees to address each customer by name, listen attentively to their unique problems, and find solutions. It shows customers you genuinely care about them as individuals, not just for their pocket.

Important tip!

You can only show customers that they mean a lot to you if you know their names, details of previous engagements with them, and location. 

That's where having a robust CRM like ServiceTitan comes in handy.

It helps to centralize all customer data. Plus, it ensures both back-office employees and techs don't go through the hassle of sorting through a trove of paper documents whenever they need information about a customer.

For example, RainForest Plumbing & Air has been using ServiceTitan’s CRM to centralize data and build tighter customer relationships.

The result?

“When we joined up with ServiceTitan, we were just cracking $12 million,” says Rainforest’s operations director Dallin Tippets. “In four years, we’ve hit the $22 million revenue mark…”

And that’s because “In five or 10 minutes, [any] tech has what he needs, and is prepared to speak intelligently and demonstrate that we all know what’s going on in a given property, no matter who the tech is.”

So, here’s how the system works.

Once a customer service representative (CSR) receives a call, the system automatically tells them if the person is an existing customer and provides an intake form for collecting their information.

And since it’s all stored in the cloud, on-field techs can access the same information on their mobile devices using ServiceTitan’s Field App. Then, use it to connect with the customer and upsell them new products.

This way, every employee knows exactly what each customer needs, their correct details, and remains focused on finding a solution.

6. Use hyper-targeted email marketing

Email marketing is a great marketing strategy to connect with customers and drive repeat purchases. But it’s only effective when the content resonates with the customer's needs.

For example, a customer whose current plan is expiring is more likely to respond to an email reminding them to upgrade to a new membership tier at a discounted rate.

According to Megan Bedford, a fractional chief marketing officer (CMO) for small companies in the trades, the returns on hyper-targeted email marketing campaigns are huge.

Take a look at some results she got for a client:

• 51 calls from a targeted email for furnace tune-ups

• 38 calls from an email campaign timed to coincide with expiring memberships

• 36 calls from a campaign for boiler tune-ups

To set up a hyper-targeted email campaign, pick your audience. For example, it could be customers with unsold estimates above $100.

Craft the email copy and send it out to them. Then, send follow-ups on the second or third day if they don't respond.

Instead of doing it all manually, you could use ServiceTitan's Marketing Pro software.

From the platform, you can create hyper-targeted audiences, like clients with unsold estimates or expiring memberships, using your data in ServiceTitan.

There are also fully customizable pre-built templates that save you the cost of hiring email designers. Just upload your logo, add the email copy, and the email will be ready to send to customers. You can also see the revenue each email generates, helping you allocate more resources to campaigns that bring results.

Going a step further, we advise you don’t stop at emails. Try direct mail, too.

Firstly, many service businesses focus only on emails, which results in cluttered inboxes for their customers, who either delete them or mark them as spam. 

Secondly, although they seem old-fashioned, direct mail campaigns have the potential to yield significant results.

Guy Fashano, sales manager at MSI Mailing Systems, who has helped businesses in the trades, says direct mails work because they’re “...physical, personal, and every piece that you send is going to get touched and recognized at some level.”

They may take a while to yield results. But according to Guy, “...it's kind of like a water well. Once you start pumping, it'll keep performing for you as long as you keep investing in it.”

Knowing how powerful direct mail campaigns are, we built Marketing Pro to simplify the entire direct marketing process.

Here's how it works:

Create your hyper-targeted audience using data from your ServiceTitan account. Add your copy. Then, upload your postcard to ServiceTitan's direct mail builder and launch it.

The good thing is that you'll only pay for the postcard you send, which is cheaper than using minimum print runs.

And once the campaign is in motion, you'll see the revenue they're generating on your dashboard in real time.

So, combine direct mail and email marketing to gain repeat customers.

7. Be consistent with your brand voice

Eric Thomas, the president of Rival Digital and host of the Smart HVAC Marketing podcast, defines brand as “What other people say about you when you're not in the room.”

Using a consistent brand voice across all customer touchpoints reinforces your brand identity in their minds and gives you an edge over competitors.

Also, when customers know what to expect from a brand, they're more likely to trust it and feel comfortable and confident interacting with its people. This can lead to repeat purchases and increased customer loyalty.

Take Disney, for example. 

A huge part of Disney’s success is its branding. Many people have grown loyal to the company because of their emotional connection with the brand.

So, maintain consistency in the messaging on your digital assets. We’re talking websites, social media accounts, and even flyers.

Also, train your employees on your brand values and coach them to deliver top-notch customer service. This way, you’ll convince customers to keep coming back.

How to Measure Customer Loyalty

You shouldn’t make assumptions about the loyalty of your customers.

It’s best to measure this using industry-standard KPIs. Here’s what they are.

Examine customer satisfaction

Customer loyalty is built on customer satisfaction.

So, by measuring customer satisfaction, you can know how loyal your customers are and identify areas where you can improve.

Customer satisfaction is typically measured on a scale like this:

• Not satisfied: You didn't solve their problem.

• Slightly satisfied: You solved only a few of the customer's issues.

• Satisfied: You solved their problem satisfactorily.

• Very satisfied: You solved the customer's problem satisfactorily and topped it up with some extra surprises.

• Extremely satisfied: You exceeded the customer's expectations.

You can send this scale in a survey to your current customers once a tech finishes a job. 

Or, better still, hop on a call with the customer to better understand their satisfaction levels. You can also go through online reviews and star ratings.

Calculate your customer retention rate

Customer retention rate is the percentage of customers that have stayed with you over a specific period.

The higher the retention rate, the higher your customers' loyalty.

The formula for calculating the retention rate is:

[(E-N)/S] × 100

Where:

• E is the number of customers at the end of the period you're considering

• N is the number of customers you gained in the period

• S is the number of customers at the start of the period you're considering.

Let's say you started the quarter with 400 customers, gained 150 more, and ended with 450.

Your retention rate will be:

[(450-150)/400] × 100 = 75%

Calculate your upsell ratio

Since loyal customers are open to making multiple purchases, your upsell ratio is a reliable measure of customer loyalty.

It's measured by dividing the number of people who bought more than one service tier by those who bought only one within a specific time frame.

Let's say you have 600 customers.

In a quarter, 400 bought more than one service tier, while 200 bought only one.

Your upsell ratio will be 2 (400 divided by 200).

What to Do When You Lose Customer Loyalty

Despite your best efforts to ensure a customer is satisfied and stays with you, they might still switch to a competitor.

So, what should you do when that happens?

1. Ask for feedback: Don't make assumptions about why the customer left you. You may be wrong.

It's best to ask them directly.

You can prepare an exit survey and serve it to customers before they leave, asking them about their experience with your business, what you did well, and what you should have done better.

This will also help you identify areas for improvement and show customers that their opinions are valued.

2. Analyze your lost customers: Perform an analysis of all your lost customers to identify trends and patterns.

For example, you might find that most customers who left had interactions with a specific tech. Or maybe they live within a particular area.

By understanding why customers leave, you can discover the weak links and prevent other customers from leaving.

3. Plan your customer loyalty strategy: Create a plan to improve customer loyalty based on why most customers left.

For example, if it was because a tech was rude or dismissive, you could bring in an external resource to teach communication techniques.

Now Over to You

One thing is sure: loyal customers will forever be the greatest asset any business can ever have because of the guaranteed and predictable cash flow they bring.

So, set up your loyalty program. Deliver the best customer service. Seek out feedback from customers. Use home service software like ServiceTitan to automate your interactions with customers. And watch the revenue come flooding in as a result.

ServiceTitan is a comprehensive tool companies in the trades use to automate and streamline their business processes. Currently, over 10,000 contractors across the country use it.