Loyal customers are worth a lot. They bring in good revenue. They provide quality feedback. And they refer your business to others. But it’s often hard to calculate their true return on investment (ROI).
Sometimes we can interpret trends along the customer’s journey on specific platforms; other times we can direct traffic to where we want. The best way to calculate ROI depends on each individual business.
Here are a few areas to help you calculate your loyal customers’ impact on your bottom line.
Word-of-Mouth Via Email and Links
Word-of-mouth is the hardest thing to track against direct sales. Nonetheless, it’s also the most effective type of marketing. Since you can’t track words in the wind, look at your email metrics to see how many people clicked your “refer a friend” button or another embedded call to action.
While you can’t see the specifics of who is forwarding your email to whom, you can get general stats and then use the information to make tweaks to your process. Add email and SMS sharing buttons to blog posts and product pages to make it easy to share and track.
You can also track inbound links with SEO tools to see what types of websites are linking to your products. If there are websites that keep recommending your products, track how much referral traffic translates into sales. This information will give you more insight into the types of customers who are talking about your products online.
Social Media Mentions
Another way to track customer loyalty as a whole is with social media mentions. While tracking ROI from social media has always been a highly contested topic, some analytics suites make it possible to track referral traffic and conversions from multiple platforms or sales funnels.
You can also set up custom links to track referral traffic, which helps determine sales from social media. While this strategy won’t tell you which customers are the most loyal, it can show trends about purchasing behavior as a whole. For instance, maybe Facebook users buy more items when given an exclusive coupon code than Twitter users. This can help you test loyalty on specific platforms instead of just your customers.
For more tips on how to better utilize social media for your business, click here.
Another way to track individual customer behavior is through purchasing history. If you’re using an easy-to-use point-of-sale system, such as QuickBooks Point-of-Sale powered by Revel Systems, it should be simple to regularly review purchasing history of past clients. This can help you estimate your loyal customers’ ROI through analyzing when they purchase (e.g. times of year, holidays, etc.), why they purchase (e.g. sales, business events, personal outreach) and what they purchase.
Calculating these trends can not only help you determine the ROI of your efforts with promotions and events, but it can also help you customize your offerings to specific clients.
By offering an affiliate program for your customers, you are allowing them to earn rewards—or even revenue—through promoting your products while also tracking their referral sales through each affiliate’s unique code.
If you notice that specific customers have higher affiliate commissions than others, investigate what products people are buying with the codes and how they are generating interest. That insight may help your own sales and marketing teams learn how to customize campaigns to reach more customers.
Appreciation builds loyalty, so by offering rewards with an affiliate or a customer loyalty program that offers discounts, you can grow your relationship with your customers and have a better insight into their purchasing behavior.
If it’s feasible, track individual clients through the online reviews that they leave. If you notice a review by Jane Doe saying she plans to return based on her positive experience, find out why. If Jane enjoys the ability to order online and pick up her order the same day, you can focus on improving that process by making sure mobile orders are easy and efficient. What Jane says likely reflects something other customers appreciate about your business too.
This is an easy way to calculate the ROI of feedback from loyal customers. By implementing changes based on their feedback, you know how much their insight has improved your business’ sales. Find correlations between positive customer reviews and purchasing behavior, so you can see what drives loyal customers and how to cater to them.
See our article on best practices for customer relationship management for more tips on how to boost customer loyalty.