Web Offers Key Lessons in Customer Loyalty

NEW YORK (TheStreet) -- Mabel's Labels, a Canadian online store that offers baby- and kid-friendly "sticky" labels for clothes, household items and stationery, has a good way of showing repeat customers it appreciates their business: Customers who hit a certain level of spending are invited into "Club Mabel."

There are club discounts for Mabel's products, the company says, and there's always a customer of the week getting sent a handwritten note and gift bag.

Mabels Labels has hit on a winning formula for making customers stick almost as well as their products. Much of the formula involves interacting with customers directly and through social media.

"It's not something that is advertised. It's just something that, once they meet a certain level here, says 'We appreciate you so much,'" says Julie Coles, co-founder of Mabel's Labels with her sister and two other women.

The company began eight years ago in her sister's basement and now has 40 full-time employees in a 7,500-square-foot workspace. A key factor in that success, Coles says, is the company's 40% repeat-customer rate.

And a key factor to getting that loyalty is good service and interaction with customers, she says.

Coles, a mother of six ranging from 18 months to 11 years, also blogs at The Mabelhood, in which she writes for other parents about what it's like to be a mom.

"We're not some faceless, nameless business owner," Coles says. "We're just like them and they feel connected to us. We're on Twitter and on Facebook. We're asking their opinions" -- on not only product-related questions, but on any issues parents encounter with their kids. The company has well over 17,000 fans of its Facebook page.

"It comes down to the fact that we really understand our customers," Coles says.

Customer loyalty is particularly crucial for small businesses, says Philip Guarino of Elementi Consulting. It leads to repeat business and referrals, two important factors for small businesses looking to grow.