Know-How Exchange : Customer Behavior

Dear John,

What do businesses need to start doing to increase customer loyalty?

They must detach.

They must detach their egos, their thoughts of who they “think” they are and their thoughts of what they "think" they are doing, business wise, and just what it is that they "think" they are offering their clients and customers.

Way too many businesses see no farther than their own little niché.

There’s the auto mechanic who thinks she’s in the auto repair business. The hair dresser who believes he’s in the hair dressing business. The family baker that believes they’re in the bread baking business.

And so on.

To an extent, they’re all right.

But to a greater extent they‘re all wrong. Their egos and their myopic view both get in their way and their business suffers as a result.

No doubt numerous people reading this are thinking “Nonsense! What on earth is this shaven-headed Brit talking about? The chap’s obviously delusional!”

All right. Here’s my reasoning. Perhaps I’m wrong. If I am, fine. But I don’t think so.

The auto mechanic is really in the peace of mind business. The hair dresser is in the image business. The baker is in the nostalgia business. And so on.

And they are all in the marketing business; in the list creating and data gathering business:

“Hello Mrs. Jones, the usual whole meal loaf? And how’s your husband's lumbago? Better take him two blueberry muffins as a pick me up. No charge.”

“Mr. Spinoza? Your Toyota’s all ready to roll, sir. We gassed up the tank and we hope you enjoy your drive to New York for your son’s graduation from NYU. Please, pass on our congratulations. And by the way, here’s a coupon with our compliments: your next next service is on us!”

“Jenny darling, with your hair looking like this, you’re going to knock your fiance’s socks off tomorrow when you walk down that aisle! There won’t be a dry eye in the house! And here's a little something from all of us. Good luck to you my dear.”

Not idle chit chat. Data gathering. See? And these rules apply to ALL businesses in ALL niches.

And why?

Because as rules they help create relationships, without which,
you have no loyalty. You might have satisfaction. But it won’t last because there’s no connection.

Create a connection and you create a relationship.

Nourish that relationship and keep feeding it, and you’ll have a customer and a solid base for referrals for the lifetime of the customer.

Get it right and you’re golden.

Screw it up, and you’ll rinse and repeat your marketing again
and again, costing you money and burning into your time.

Major challenge? no. An art form all of its own? Hell yes.

I hope this helps spark additional debate.

Gary bloomer
Wilmington, DE, USA

Dear John,

I think it was Zig Ziglar who said “Timid sales people have skinny kids.” Personally, I don’t think collecting data is as difficult as it’s often made out to be. All it takes is effort and willingness on the part of the data gatherer. A point that’s made really well by Scott McKain in the link below: Trust me. Click and watch. The video ought to start automatically.

www.speakersbureau.com/speakers/mckain/video-taxi-terry.htm

Alexander the Great is said to have known the names of every man in his army. He is also said to have known the names of their wives or significant others, the names of their children, and the names of the towns and villages each man came from.

I don’t know if this is true or not, but if it isn’t, it probably ought to be.

As far as rules requiring unparalleled flexibility are concerned, there’s only one thing stopping business owners creating their own rules.

Apathy.

As the pioneers and their wagon trains headed West in the 1800s, there was an oft quoted motto “Them as works, eats!” In our modern, high tech world, we’d probably all do well to remember this motto and act on it a little more often.

And as for the rules being unstructured, true: they’re not perfect. But without at least some basis to build on, nothing gets done.

Where no structure exists, create one. Will this take work? Yes. But without work there’s no reward.

When you’re building a camp fire, you start out with bits of
grass, tiny sticks, and assorted kindling.

You build the fire slowly. You don’t overwhelm it, otherwise, all you wind up with is a smoking mound of crap. Build slow. Add larger sticks as the fire grows. Then, when it’s really roaring, then and only then do you stick the logs on.

And it’s from the logs that you get the heat!

Gary Bloomer
Wilmington, DE, USA

John,

I see executive support as one of the biggest issues with any initiative, and customer loyalty is no exception.

The executives may say they want to increase customer loyalty, but when the rubber meets the road, are they ready to do what it takes? Do they have the strength to hold back the product release until it's really ready? Do they have the strength to own up to customer issues and even contact the customers themselves when bad things happen? Does the customer loyalty specialist have the backing to hold people accountable when they are sub-par in their dealings with the customer?

I'd also recommend that customer loyalty specialists make sure that everyone, especially the execs, define what customer loyalty means. Is it a customer sat rating? Is it repeat business? Is it referral business? Define how you are going to measure customer sat so that you know whether you're succeeding or not.

All the best!

Melissa

I wholeheartedly agree with Melissa. For several years, I was retained by software firm to call their customers on a regular basis, and to notify the company CEO of any major outstanding issues. This worked extremely well: it was very helpful to be able to say that I was calling on behalf of the company's president, and that I had the ear of the company's president.

Eventually, the software company's marketing department took over the project, and without the direct involvement and oversight of the company president, the program became much more focused on short-term goals and on simplified administrative procedures rather than on understanding the perspectives of the customer.

Hi Dawson,

You've opened a great question :)

I'm with Melissa on this one - I think the biggest challenge that is not really addressed is defining what we mean by 'loyalty'.

How can we measure something in a scientific manner if we don't have a specific set of rules.

Are we talking here about:

Brand Loyalty?
Product Loyalty?
Service Loyalty?

I think the measure that needs to be used, will be very different for each kind of business.

For example, If I am a major software company such as Microsoft - I want my customers to be loyal to my BRAND but not to my product. Why? because I want to upgrade them to a new product every 2 to 3 years. If I remain loyal to windows XP, then they can't make any more money from me on upgrading me to Windows 7.

So they want me to trust them and upgrade when they tell me to and they want me NOT to move to Linux or MAC instead.

So they need brand loyalty.

On the other hand, if I am a service such a Jiffy-lube then I need service loyalty. I need my customers to trust that I give excellent service at a good price and no need for them to 'risk' trying someone else. Here I need to build a relationship based on trust and delivery to promise.

If I am a major retailer such as Wallmart - then I need people to ALWAYS but at my store rather than someone else's store. Given that groceries and household items are very much commodities, then it as all about PRICE first, plus selection and finally service.

Especially in hard economic times, people will buy groceries based on price so I will retain my loyalty if I can beat the competitors price.

I hope some of these thoughts can stir up some more interesting inputs;

Also - I hope that the ADMIN can please keep this question open a litle longer than usual so that posters can get involved in the discussion.

All too often, questions are closed too quickly in this forum.

Good luck to all,

Matthew