Who needs loyal customers? Me, I do and here is why!

written by Sarah Colgate

Business Tips for 2024 | Helpful tips for tourism operators

January 24, 2024

Having loyal customers is crucial for a business.  

For me having a handful of loyal customers is essential to business success. Not only does it build a good base to grow from it also acts as a form of marketing to promote your business. The most loyal customers become advocates for your business, share their love of your business and your services with their family and friends.

When someone recommends a business you are more likely to use that recommendation then go out and look for yourself.  

I have listed a few points below to help you build a loyal customer base and understand how it can benefit you and your business.

Repeat Business

Loyal customers are more likely to make repeat purchases from your business. They have already experienced the value of your products or services, they trust your brand, and prefer to continue doing business with you. This repeat business contributes to stable revenue coming in and helps to sustain your business over time.

I suggest you track how many times customers are purchasing from you and recognise that with a loyalty program, thank you cards and emails. 

Increased Lifetime Value

As a business owner, I strongly suggest that you calculate the lifetime value of a customer. Look at the number of times someone can potentially visit your business in their lifetime. Then look at how many customers you need to meet your budgets. 

Once you have calculated the lifetime value of a customer you will then begin to understand how important having loyal customers is. 

Loyal customers tend to have a higher lifetime value compared to new customers. They often make larger purchases, engage in upselling or cross-selling opportunities, and refer others to your business. By nurturing and retaining your loyal customers, you can maximize their lifetime value, which directly impacts your business’s profitability.

A guide on how to calculate the lifetime value of a customer

Cost Efficiency

Acquiring new customers can be more expensive than retaining existing ones. Loyal customers require less marketing and advertising spend, as they are already familiar with your brand and have established trust. Building relationships with existing customers is generally more cost-effective and can yield a higher return on investment.

New customers cost approximately 2.5 times more to acquire in terms of marketing spend than existing customers. New customers often need to be exposed to your brand up to 7 times before they buy from you.

Positive Word of Mouth and Referrals

Loyal customers are more likely to recommend your business to friends, family, and colleagues. Positive word of mouth and referrals are powerful marketing tools that can bring in new customers at a lower acquisition cost. Satisfied customers become advocates for your business and brand, expanding your customer base and enhancing your reputation.

An example: In late 2021 my family and I took a holiday to Lady Elliot Island on the Southern Great Barrier Reef. We had heard from a number of people how beautiful it was so we decided to try it out. It was a sensational holiday experience on a beautiful tropical island with no phone, no internet and pure relaxation.  We loved it so much that we rebooked for the following year. Between our two trips we told at least 90 people in person how amazing the trip was in addition to our social media posts that reached 700+ people. I know that a number of our friends have booked in to try it for themselves. 

Word of mouth is still a very powerful and cost effective form of advertising.

Brand Advocacy

Loyal customers not only refer others but also actively promote your brand. They may engage with your business on social media, leave positive reviews and provide testimonials. 

The rise in popularity of reviews has been significant and can determine if customers choose to buy from you or engage with your business. For a business addressing those reviews and asking customers to complete them is very important. Also remember not all negative reviews are negative. Everyone knows things go wrong, customers can be picky and demanding. How you respond will build trust and help grow your advocacy as well. 

Customer advocacy helps to build credibility, attract new customers, and differentiate your business from competitors.

Customer Feedback and Insights

Loyal customers are often willing to provide feedback and insights about your products, services and overall customer experience. Their input is valuable for identifying areas of improvement, refining your offerings, and staying ahead of market trends. Often when you engage with existing and loyal customers they will be open and honest with you about what you can do better. 

I always suggest to my clients that they keep track of when loyal customers are buying, what they are buying and how often. If these patterns change, don’t be afraid to get on the phone and call the customers, ask questions about what’s happening with them and why their buying has changed. They are more likely to be direct with you. 

By listening to your loyal customers, you can enhance customer satisfaction, manage your revenue streams, buying patterns and drive innovation in your business.

Competitive Advantage

In competitive markets, having a base of loyal customers gives you a distinct advantage. It becomes harder for competitors to lure your customers away when they have established a strong relationship with your brand. Loyal customers often prioritize trust, reliability and familiarity. This will make it more challenging for competitors to convince them to switch to their business. 

Also loyal customers will tell you why they choose your business then you can use this to attract more customers putting you ahead of the competition. 


Loyal customers are essential to every business as they contribute to the stability, growth and profitability of your business. They provide a foundation of revenue, act as brand ambassadors, and offer valuable feedback. By prioritizing customer loyalty you businesses can foster long term success and differentiate your business form competitors in the marketplace.

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