Loyal customers are the heart of every local business. Analyze your current loyal customers to identify ways to find more like them.

Every local business knows the importance of its loyal customers. They often provide the foundation for the business and help “weather the storm” during difficult times. They’re also a great resource for ideas to continually improve your business.

It’s not uncommon for loyal customers to behave differently from the rest of your customers. The heatmap graphs below clearly show that loyal customers (on the right) tend to visit at different times than most customers (on the left). Understanding these differences can lead to strategies to expand your base of loyal customers.

Three things stand out in this example: (1) loyal customers primarily visit early on weekday mornings, (2) they almost never visit on weekend afternoons, and (3) they prefer to visit when it’s less busy.

Let’s walk through this example to identify ways to increase customer loyalty at all times of the day and week. You can apply a similar process to your own business to develop new growth strategies.

Step #1: Measure Customer Loyalty

Customer loyalty is often not measured well, if at all. The heatmap graphs shown above provide an interesting perspective because they measure when your loyal customers visit — and, more importantly — when they do not. The trend graphs shown below allow you to measure the change in customer loyalty over time, such as before/after you implement a loyalty program.

These graphs are different for every business, of course, but the results are almost always insightful and actionable. And often include a few surprises.

Step #2: Keep Asking “Why?”

As highlighted in Know Your Numbers, you should brainstorm reasons for this behavior. Here are some theories:

  1. This business may have a compelling product in the early morning hours that is unavailable or not as appealing later in the day.
  2. This business may run out of inventory of popular products early in the day (such as a donut shop), and loyal customers know to visit early in the day.
  3. This business may be running a weekday breakfast special that loyal customers know about but is not widely advertised.
  4. This business may appeal to a narrow target audience, such as a coffee shop targeting weekday commuters.
  5. This business may have staffing issues that result in poor customer service during the busiest times, which loyal customers know to avoid.
  6. This business may have limited parking or seating available during busy times, turning loyal customers away.
  7. This business may attract weekend tourists who do not visit the area frequently enough to become loyal customers.

Let’s review some strategies to validate or invalidate each theory and identify ways to address each issue.

Step #3: Review Product Selection and Availability

To attract more loyal customers, the product selection needs to appeal to people across all times of the day. If you own a coffee shop, consider offering tea to attract afternoon visitors. Look for products that could attract a new audience of potentially loyal customers or encourage existing loyal customers to visit at different times.

If product availability is an issue (as in the donut shop example), work to improve your sales forecasts to make sure your most popular products rarely sell out. The scarcity principle has value in retail, but too much of it trains your customers not to visit when they think you’re probably out of stock. A snowball effect can occur where most sales occur in the first few hours of the day, which causes your sales to drop and causes you to reduce inventory levels, creating further scarcity. A little scarcity shows your products are in high demand, but too much can eventually put you out of business.

Step #4: Diversify Promotion Strategy

If weekday breakfast specials attract loyal customers, offer lunch specials as well. For this business, revisit all weekend promotions (if any) to find ways to attract loyal customers on weekends.

It’s always helpful to listen to your loyal customers to identify why they visit when they do. For example, a few loyal customers may visit after attending church services. Use these insights to attract similar customers, such as advertising a Sunday brunch special with nearby churches.

Step #5: Address Business Constraints

This business may have staffing shortages, limited seating, limited parking or similar constraints. Some of these issues can be difficult to address, but the first step is knowing they exist and that they’re impacting your loyal customers. Your loyal customers can help validate whether these issues impact them.

Work to resolve or mitigate each of these issues. Some customer education may also be necessary, such as promoting that you’ve improved customer service over the lunch hour or that additional parking is now available just a block away.

Step #6: Segment Your Customer Base

This business clearly has at least two customer segments: visitors on weekdays and visitors on weekends. For example, if this business is a restaurant located in Manhattan, the weekday visitors might be office workers and the weekend visitors might be tourists.

This segmentation is really helpful because it helps identify more specific strategies to target each segment to increase customer loyalty. Thinking of all customers as the same will limit your creativity and ignore key differences that may exist between each segment.

Step #7: Launch (or Expand) a Loyalty Program

Loyalty programs work. Loyal customers like being rewarded, and it makes it easier for your staff to get to know them by name. They can also encourage 5-star reviews for your business. If you don’t already have a loyalty program, create one.

With a loyalty program in place, you can use reward points to influence customer behavior. For example, this business could offer a “Double Points Weekends” promotion to encourage its loyal customers to visit on weekends. If this promotion is successful, that would be great for business. But if it’s not, this business would learn that the weekday and weekend customer segments are largely or completely separate. In that case, different strategies are needed to attract new loyal customers on weekends.

Step #8: Measure Changes Over Time

In addition to the heatmap graphs shown above, monitor changes over time to measure the effectiveness of the changes you make to your business. Hopefully, you’ll see growth in customer loyalty that looks like this:

Next Steps

Start by visualizing the customer loyalty for your business by the day of the week as well as the time of the day. If you see unusual patterns like in this example (as you typically will), consider why this might happen and implement ideas to build customer loyalty during the weakest days/times.

Next Up: 7 Reasons Why Your Order Size is Declining and What to Do About It

All screenshots are taken from Sprk™ using either fictitious data for illustrative purposes or real data used with permission.