Turn Ghosts Into Visible Customers
In some ways, customers are invisible and unidentifiable. They are "visible" to the naked eye and become invisible when a business doesn't know or use their names, markets products or services that don't align with their values or past purchases, treats them like everyone else or doesn't show appreciation for their patronage.
Have you ever felt invisible by entities you do business with? Does your insurance agent call you to answer any questions you may have and ensure you have adequate coverage for your car or home? Does your mechanic look over past work records before performing repairs on your vehicle and help you prioritize other maintenance needs? Does your favorite bookstore send you a thank you note after you've purchased $100 or send information about other books based on your prior purchases? If not, you may be an invisible customer to them.
Satisfaction vs. Loyalty
Somehow, organizations confuse customer satisfaction with loyalty. The reality is that customer satisfaction does not guarantee repeat business or referrals. Jeffrey Gitomer in his book, Customer Satisfaction is Worthless--Customer Loyalty is Priceless states that satisfaction is merely meeting customers' minimum expectations. Gitomer points out that "satisfied" customers leave every day while loyal ones not only keep coming back, they tell and bring others.
Loyal customers are considered one's best customers. They remain loyal over a long period of time and don't easily switch to competitors. Besides being frequent or consistent users of an organization's products and/or services, they enroll new customers without being asked and become what Guy Kawasaki refers to as "evangelists." Some organizations experience fifty to seventy percent of "new business" as a result of loyal customers.
What Elements Breed Customer Loyalty?
How do organizations develop loyalty? Successful ones create, implement and maintain a customer-centered focus. Nordstrom was ahead of its time in recognizing the value of exceeding customer expectations. Over the last thirty years, the service-based business has become the dominant force in economic activity and consumer expectations continue to rise.
Joseph Pine and James Gilmore, authors of The Experience Economy, warned that increased competition may cause services to be seen as commodities and organizations need to make interactions with customers "memorable experiences." Every interaction creates an emotional deposit and over time, establishes a basis of loyalty to an organization and a market differentiation from its competitors.
Implementing Loyalty Strategies
Instead of focusing all your resources on getting new customers this year, implement a plan to turn first-time customers into repeat customers, which in turn develop into loyal ones who bring referrals and new business. Follow these nine strategies below and watch your business grow!
- Allocate 50% of marketing budgets to retain customers
Spend half of your marketing budget to retain customers. Use resources to cultivate repeat purchases, reward customers and stay in touch regularly.
- Develop a customer-centered culture
Corporate culture is created by beliefs and behaviors. State the importance of exceeding internal and external customer expectations, provide training for all employees on managing customer relationships and reinforce positive behaviors as part of a performance management system.
- Collect Customer Intelligence
Collect customer intelligence by using a database and/or CRM (Customer Relationship Management) software program. Enter baseline information (e.g., company name, key contacts, address), document comments, transactions and interactions with customers.
- Add value to every customer interaction
Ensure every interaction is positive, provides perceived value, and reduces wasted time or non-value-added processes for customers. Interactions include phone calls, e-mails, faxes, meetings, special offers and all transactions. Monitor interactions at all levels of an organization, including sales, accounting, customer service and delivery.
- Analyze and respond to customer history and feedback
Regularly review customer transactions and interactions. Use information to recognize and reward your best customers. Learn which customers may be "at risk" due to inactivity or who may have unresolved issues, which may result in losing them.
- Recognize and reward customers for ongoing business
Thank customers for first time or repeat purchases and show appreciation for their business. Provide special rewards for your best customers through appreciation events or value-added services earned over time. A simple handwritten thank-you note can go a long way.
- Ask loyalty-based questions to solicit feedback
Ask questions that begin with "how," "what" or "why" to provide valuable information. Examples include, "How did you hear about us?" or "What did you like best about staying in our bed & breakfast?" or "Why do you like doing business with us?"
- Stay in touch with customers
Develop a plan to "touch" customers quarterly or monthly. "Touch points" may be calls, e-mails, newsletters, offers, surveys, etc. Two-way interactions provide more feedback than one-way types. If you're invisible, your customers will be, too.
- Thank customers over and over again
Thank customers at the time of sale and show appreciation after the transaction is completed. Remember the words of Marshall Fields, "People remember those who remember them."
Developing customer loyalty is hard work, and then again, so is attracting new customers. By creating a customer loyalty plan, your organization will gain a competitive advantage in the market.
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