Importance of Customer Loyalty to Build a Sustainable Business5 Dec, 2011 By: Susan Woelfel, Josie Heskje imageSource
Have you worked hard at satisfying your customers yet found that some still left you to go to another provider? You just went above and beyond to fix a problem but now they are with your competitor? And the economy isn’t helping you either, right? So for 2012, what do you plan to do differently to sustain your business?
According to Kiplinger, the U.S. economy will grow about 2% in 2012. This is roughly the same as in 2011; enough to avoid another recession but not enough to make much of a dent in unemployment.
With this kind of economy, coupled with a transitioning industry, your business doesn’t have the “cushion” it may have had a few years ago, and can’t afford to lose even one customer to a competitor.
We’ve all heard the statistics that it costs six to seven times more to bring on a new customer as opposed to keeping an existing one. So what can you do to take action? One thing in your control is your approach to customer loyalty. Loyal customers usually return to buy more, they tell other people about their experiences, and they may well pay a premium for doing business with a supplier they trust.
Customers for Life Experience
Companies must go beyond providing quality products and services to build sustainable relationships based on trust, confidence and a strong value proposition – that is the foundation of customer loyalty.
So - how do you strengthen your customer relationships further and go about building that loyalty?
First, you must understand your customer’s business needs, goals and expectations. Ask them specific questions about their business! What are their business initiatives for the coming year? What current programs are growing their company? What challenges and opportunities do they
By taking the time to truly learn about each customer’s business and its initiatives in depth, it allows you to focus on providing to a customer’s specific needs and helps to create a stronger partnership with them. This partnership now allows you to provide the products and services that add the most value to their organization - which in turn, increases their customer satisfaction and loyalty.
The Personal Connection
Once you better understand your customer’s business, you can evaluate how best to meet their needs beyond the products and services that you provide. Customer loyalty is strongly driven by the relationships built between the customer-facing employees (sales and service teams) and the customer. There’s nothing like a personal connection to help foster a business relationship.
A critical element of customer loyalty is an accessible customer-facing team that responds quickly, is knowledgeable, and can solve a customer’s problems as well as finding small things that go beyond the customer’s expectations. For example, call to congratulate them on completing a successful program. Send a quick greeting for a holiday. Forward articles or links to helpful information, and take time to thank them for their business.
Employees need to truly care about meeting customer needs and then go beyond their expectations. Exceeding expectations shows you’re willing to give the extra effort necessary to help them be more successful. Keep in mind, this kind of customer-focused culture is most successful when it is supported from top management. Communicate with your employees about the importance of taking care of your customers. Put policies in place that support and align with that philosophy.
Invest in training that makes your employees more knowledgeable. By providing education and training to your staff, you provide extra value to your customers. Better industry knowledge, greater product expertise, and improving how they sell to your customers can make doing business with your company more beneficial to your customers – and help create more loyalty.
Once you have established a strong customer loyalty culture, it is very difficult for a customer to switch to another company!
Yes, customer loyalty takes effort to develop but is valuable for any company. Imagine if you created a loyal base where all your customers stayed with you and your business grew as their businesses grew. Acquiring new customers adds to your strong customer base and your business grows strong, healthy and profitable.
Test Your Customers’ Loyalty
So - how do you know if you are creating a loyal customer base? First, put yourself in your customer’s shoes. Look at your business from their perspective. Then, take the following test to determine if your business is structured to create loyal customers.
*Scale: To a very great extent = 5 To a great extent = 4 To some extent = 3 To a slight extent = 2 To a very slight extent = 1
25-30 pts Excellent: 5 stars
You actively focus your business to meet the needs of your customers. If you feel there is still room for improvement, evaluate all the areas with other managers in your company to see what further enhancements could make a positive impact.
20-24 pts Very Good: 4 stars
You have strong performance in many areas but may have one or two spots where improvement could make the difference. Additional evaluation could provide the difference between strong performance and exceptional performance.
15-19 pts Good: 3 stars
You have done some positive things but may be inconsistent with how you execute on customer loyalty. Are there a few areas that need more focus to truly deliver to your customers’ needs?
10-14 pts Could be Better: 2 stars
It looks like you have some gaps in your customer loyalty initiatives. Go back and look at your low scores and see what you can do make improvements in these areas.
0-9 pts Need to be Better: 1 star
If you feel a bit down with such a low score, don’t despair. The first step in any solution is the knowing that you have a problem. Prepare your next steps to start improving your customer loyalty today.
So - did your score open your eyes to gaps in your customer loyalty initiatives or did it confirm you are on the path to a stronger, healthier company? Whichever the result, here are a few things to remember:
• Continuous customer feedback and communication is essential to a strong relationship. Use survey tools and customer review sessions to truly understand the needs of your customer.
• Customer loyalty initiatives are most successful when openly endorsed by leadership.
• Increasing customer loyalty is an investment and takes time and consistent effort.
• Get feedback on how your organization is performing, but also on your customers’ business needs and challenges.
• Take ACTION with the input from your customers. If you ask them for their feedback you must show them it was valuable by applying it to your business.
• Create a prioritized list of action items. Implement a limited number of action items at a time to ensure successful implementation.
Finally, take customer loyalty initiatives and apply them to your business to make sure you thrive--even in a tough economy. In a challenging business climate, there are always companies that excel and companies that don’t. Take the steps to make sure your company thrives today and into the future, and provide a Customers For Life™ *experience!