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Enjoy Eight Ways That Loyalty Pays
by JoAnna Brandi


In today's high-speed, competitive market you'd be crazy not to keep 'customer loyalty' front and center of your intentions. Former Dell CIO Jerry Gregoire alluded to the critical importance of achieving customer loyalty when he said, "The customer experience is the next competitive battleground." Amen!

The customer experience makes or breaks customer loyalty. With so many choices today, it's the quality of the experience - how you repeatedly make your customers feel at each and every touchpoint - that will determine whether or not they'll come back, purchase more, and refer their colleagues and friends to you.

It's all about your customers' perception of the value you deliver, both tangible and intangible. You may think you know the kind of customer experience you're delivering, and that your customers share your views. You may think that because your customers stick around and don't complain they are loyal.

In fact, you may be mistaking customer inertia for loyalty. It's easy to do. Remember that loyalty is a genuine emotional attachment that occurs when your customers appreciate the value of your product or service, as well as the way you deliver it. Because they repeatedly feel powerful, positive emotions in dealing with you they'll choose you above your competitors - even if they have to go out of their way or pay a bit more.

Yes, strong customer loyalty pays. It puts your business into a profit-building cycle in a number of common sense ways:

  1. Loyal customers buy more - and are often willing to pay more. This creates a steadier cash flow.

  2. Loyal customers refer others to your business - saving you the marketing and advertising costs of acquiring customers.

  3. Loyal customers are more forgiving when you make mistakes - even big ones (especially if you have a system in place that empowers employees to correct errors on the spot. Then loyal customers become even more loyal!).

  4. A loyal customer's endorsement can surpass the most extravagant marketing efforts. Proof of the pudding: A low-budget film can become a blockbuster hit thanks to positive word of mouth (My Big Fat Greek Wedding). Mega stars and publicity blitzes can't prevent high-profile films from tanking (Alexander the Great); the 'word on the street' is more powerful.

  5. Thriving companies with high customer loyalty usually have loyal employees - and loyal employees save you money in a variety of ways. You don't have to spend money attracting, hiring and training new employees, and you have knowledgeable people at all levels of the organization serving the customers and each other. And those employees get very smart over time - in a culture that values them and their contributions they can be responsible for countless system improvements - and millions in savings.

  6. Thriving companies with high customer and employee loyalty are generally known to outpace their competitors in innovation. (Think Gore-Tex, Southwest Airlines (the twenty-minute turn-around), Progressive insurance. . .) In addition, their cultures support continuous learning. In today's market, if you're not continuously learning and innovating, there's no question that you're falling behind.

  7. Loyal customers understand your processes and can offer suggestions for improvement. Their feedback can help with R&D efforts as well as improvement efforts.

  8. Profits, profits, and did we say profits? An increase in your retention of customers can boost your bottom line profit 25-100% depending on your fixed costs.

Based on these benefits and more, I urge you to make this the "Year of the Customer;" you'll be much more likely to achieve your business resolutions.


The Author

JoAnna Brandi

JoAnna Brandi is the Publisher of the Customer Care Coach® leadership program. She is the author of three books: "Winning at Customer Retention, 101 Ways to Keep 'em Happy, Keep 'em Loyal, and Keep 'em Coming Back" "Building Customer Loyalty - 21 Essential Elements in ACTION" and "54 Ways to stay Positive in a Changing, Challenging and Sometimes Negative World" JoAnna is an accomplished public speaker and a contributing author to numerous business publications. Her work in customer loyalty has been cited in Fortune Magazine, Sales and Marketing Magazine, The Executive Report on Customer Retention, US Banker, the Retail Advantage, The Kiplinger Letter, The Competitive Advantage and dozens of others.

You can subscribe to her bi-weekly Customer Care Tip for free and find more of her work at and .

Many more articles in The Customer Care Coach and Customer Service in The CEO Refresher Archives
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Copyright 2005 by JoAnna Brandi. All rights reserved.

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