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To Stay Competitive, Focus on Customer Loyalty

Matt Bernot
May 13, 2020
8 min read

As our pandemic crisis continues to reshape the nation’s economy, clear winners and losers will emerge on the business landscape. In fact, it’s already happening. We’re seeing that large companies, particularly those who can increase customer loyalty, will knock out many of their smaller competitors.

The Associated Press reported the temporary closing of “71% of shoe stores, 77% of thrift shops and 68% of antique dealers. Forty-two percent of restaurants have shuttered.” By contrast, Amazon’s stock has soared from the increase in online shopping while Chipotle’s stock continues to rise after a successful rollout of streamlined takeout ordering.

For the moment, and arguably for the foreseeable future, customer behavior has changed. Right now, buying from smaller stores and ordering services doesn’t seem as attractive an option. But the ways customers shop is largely about who they trust.

Customer Loyalty Starts With Trust

customer exchanging happy face card with business

Let’s assume your business is staying afloat through this crisis: you’ve received a loan from the SBA, you were able to retain staff, and you’re generating some revenue. However, you know that operating like this can’t last much longer. Many of your customers have disappeared and you’re not sure when they’ll be coming back. It’s frustrating: while your business has always prized its personal touch, larger companies have a better chance of survival. Amazon will be fine— but how can you compete in this climate, which may extend to 2021?

Here’s the good news: you have both strategies and tools at your disposal. Take a few plays from the Mega-Corporate Playbook while honoring what makes your business unique to customers. If you can’t beat the big guys on size and reach, strengthen your back office while communicating the implicit reasons customers should be loyal to you. In these times, your customer loyalty strategy may be the one thing that saves you. 

Communication is King

Knowing what messages to send to your customers, and when to send them, can be confusing in these times. Many businesses opt for sending specials and deals on their products or services. Others are just writing to update customers on their operational status. Given the ability of large businesses to make deliveries quick and services available, you need to adapt this process for yourself.

Your customers actually expect more from you right now, even though you may be short-staffed. Ultimately, that’s a good thing— those expectations are an expression of the trust they’re placing in you. It’s essential that you make good on their willingness to be loyal customers.

Err on the side of communicating more often. Keep customers in the loop with what’s available and how they can take action.

Get Control of Your Inventory

This is a perfect time to revisit and update your inventory. Knowing what you have on hand, what’s on order, and when it can get to your customers is invaluable at this moment. 

Disruptions to your supply chain are likely, if not inevitable, for months to come. That’s going to affect your customers. And just as it’s important for you to know the status of products, it’s equally important that your customers be updated on it, too. As Adrian Swinscoe writes in Forbes, “nearly 70% of customers said they want more communication, 86% said it’s ‘important’ or ‘very important’ for retailers to tell them when an item will arrive.” 

man with tablet showing inventory control in warehouse

Managing your inventory can always be a challenge, but having the ability to navigate delays on the back end is essential. But if you’re not managing your customers’ expectations about when things will arrive, they’re going to lose confidence in you. 

Remember, you have some leeway with delays. We’ve probably all had the experience of ordering something on Amazon, scheduled to arrive in three weeks, that actually comes in three days. It seems like they’ve got a pretty good way of managing my expectations with some simple underpromising and (pun intended) overdelivering. 

Research supports this— Swinscoe’s article also notes, “recognizing that many deliveries are facing lots of problems right now, 70% said they were less likely to shop with a retailer or brand again if they were not informed in advance of a delay.” The takeaway: delays are fine but delays in communication are not.

Update Your Conveniences

If you don’t have a way for customers to pay you online, how can you expect to get paid on time? An example: I recently hired a local landscaping company to work on my lawn. They take payment online, but charge a 5% service fee. On a big spring cleanup, that’s no small sum. If I don’t want to pay the fee, I’ll need to send in a check. I’m wary of that for two reasons: first, I’m out of stamps, and I don’t want to go to the post office in this climate; second, I don’t have a working printer and can’t even send in a copy of the invoice so my payment matches their records.

Given these conditions, doesn’t it sound like my payment is going to come in much later than it would if I could easily pay online? My mortgage lender has waived online payment fees in the wake of COVID-19. So why can’t my landscaping company do the same? In many cases (and companies like Amazon are responsible for this), convenience is tied directly to loyalty. If your business can’t take a few hints from larger companies, it’s inevitable that your cash flow will suffer.


And if you don’t have a way for your customers to pay you online at all, think about how important that’s going to be to the future of your business. It’s already the standard, and you don’t want to be playing perpetual catch-up.

Provide Project Visibility

accounting software

If you’re in a service-area business, it’s now more important than ever for your customers to get some insight into project status (whenever they want it, preferably via a portal). Clients are cutting back on all kinds of services. They’re watching budgets like hawks. If you can’t provide services quickly and justify every aspect of the cost, you’re going to send them elsewhere. Especially now: when I order meal delivery and I can see every step in the process, I trust the business more thoroughly. I also perceive an inherent ROI.

Your small business can give visibility into project status just as quickly. But, of course, you need to make sure your project team is on top of the work. That’s undoubtedly more difficult now that many of your teams are working remotely, and likely will in the future, too. 


That means you’ll need the project management and tracking tools and client portal for full transparency. Fortunately, those tools also allow you to determine project profitability and see how your time spent relates to your larger revenue goals.

Get Ready to Compete

This economic situation will favor larger companies who have the resources to deliver products and services to their customers. Many small businesses will fail in the short term from revenue loss. But many others will shutter in the long term because they haven’t adapted to new behaviors and built customer loyalty. 

However, the country cannot succeed without small businesses. But if you’re able to take a few plays from the biggest players in business and support your own customers with the kind of personal touch they come to expect from you, you’ll be playing a winning game. 

Matt Bernot Headshot

Matt Bernot

Matt Bernot has spent the past eight years working in software, banking, and finance. He specializes in business technology solutions and teaching efficient processes to help organizations accomplish more. Matt is a huge fan of the Philadelphia Flyers and a father to a pair of incredibly goofy cats.