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:
- Loyal customers buy more - and are often willing to pay more. This creates
a steadier cash flow.
- Loyal customers refer others to your business - saving you the marketing
and advertising costs of acquiring customers.
- 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!).
- 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.
- 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.
- 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.
- Loyal customers understand your processes and can offer suggestions
for improvement. Their feedback can help with R&D efforts as well as improvement
- 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
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.