marketing GOING BEYOND CUSTOMER SATISFACTION TO
CUSTOMER LOYALTY
by Mike Davids, Newcomb Marketing Solutions
“You don’t even know me,” she said to herself as she walked out the door for the last time. This could be one of your “satisfied” customers realizing that even though you delivered all the services she expected, you never connected in an individual, personal way.
IS THIS SO IMPORTANT IN BUSINESS? Conventional wisdom assumes that you can build a healthy business by providing the four cornerstones of customer satisfaction: • Dependable Product • Dependable Service
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• Competitive Pricing
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• Convenience
marketing
Other research corroborates—customer satisfaction does not seem to equate with loyalty: • Forum Corporation reports that up to 40 percent of the customers in its study who claimed to be satisfied switched suppliers without hesitation. • Harvard Business Review reports that between 65 percent and 85 percent of customers who chose a new supplier say they were satisfied or very satisfied with their former supplier. While we assume the four cornerstones can build a business—very few people would agree that these attributes would build a relationship. Being dependable, affordable and convenient is not exactly a friendship or marriage made in heaven.
MOVING FROM SATISFACTION TO
LOYALTY
Satisfaction doesn’t keep customers loyal—the bonds that create strong human relationships are also the bonds that create customer/client loyalty: • Frequent communication and honesty above all else • Listening, understanding and knowing your customer’s personality, needs and wants • Helping customers become more successful • Finding solutions to problems • Recognition and contact above and beyond business contact • Humor, caring and friendliness • Advocacy—protecting customer’s interests • Demonstrating interest by providing rapid response and delivery of solutions • Providing more than is asked—“the surprise factor” • Caring—just because it is the right thing to do
Building these behaviors into marketing, employee training and the business culture at a partnership requires planning, oversight and leadership. The most successful organizations have found that customer loyalty can be cultivated by focusing on these four areas: • The personality of the brand—think Apple computers and Harley-Davidson
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• Training of the employees—think Southwest Airlines and McDonalds
Dependable
• The development of a consistent and reliable product or service with personal touches that surprise us— think Honda or Disney
Product
• A strong focus on the customers’ needs and wants— think Starbucks or Home Depot People become loyal to certain organizations, not just because their advertising is cool, the price is low or the service fulfills a need. They become loyal because at every intersection with the product or service they feel a genuine experience that inside the organization there are real people who care about them, know how they feel and want to make their lives better. In other words, customers believe that a company can “know me.” Most people have a favorite product or service that they are loyal to. They also have had experiences with products or services they would never consider buying again. And then, there is the majority of products and services—the vast gray area—that satisfy but do nothing special to create diehard loyalty.
• Dependable Service
• Competitive Pricing
• Convenience
When I think about how to create loyalty on a corporate level, I am always reminded of a business flight I once had to take the week before Christmas. I was going to be away from my family during a special time and I was missing them even before I got on the airplane. However, when I boarded the plane the flight crew on Southwest Airlines were dressed in corny elf costumes and sang a carol (badly) before the flight left the ground. It was funny. They broke the ice of bad feelings among all of us reluctant business travelers and forced everyone to feel a little better. Passengers felt like they were among friends for the rest of the flight. In some corporations, dressing in an elf suit would be grounds for immediate dismissal. At Southwest, they intentionally hire friendly people. Then they put them through extensive training in friendliness and they reward employees for creating a fun and friendly environment while on the job. Hence, employees at Southwest enjoy their work and it shows in their behavior around customers. The company also has the lowest employee turnover in the industry. Are some people turned off when someone in a “servant” position behaves too friendly or informally? Certainly, some people expect class-system formalities, but Southwest
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This view is so prevalent that, according to Arthur Hughes of the Database Marketing Institute (www.dbmarketing.com), in excess of 90 percent of top managers from more that 200 of America’s largest companies surveyed agreed with the statement: “Maximizing customer satisfaction will maximize profitability and market share”. Yet, less than two percent of the 200-plus respondents were able to measure bottom-line improvement from documented increases in levels of customer satisfaction.
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marketing GOING BEYOND CUSTOMER SATISFACTION TO
CUSTOMER LOYALTY (continued from page 19) knows its customers. They are discount airline travelers. People who pay for and expect first-class treatment do not fly Southwest.
THE BENEFITS OF
LOYALTY
Increased loyalty can impact your business in six areas: • More positive word of mouth and referrals
When you truly know your customer, you will be able to serve them better. When they know you care, they will remain loyal. Customer satisfaction may still be a great first step in running a successful business. However, aiming higher for customer loyalty means planning to spend more time getting to know and appreciate your customers’ individual wants and needs and helping them to get to know you better. If you do that, the next time a customer walks out your door you know they will be coming back.
• Reduced customer turnover • Increased success in selling additional services/ products to existing customers • Reduced marketing time and costs
Mike Davids, member of Newcomb Marketing Solutions’ Creative Team, has more than 20 years of experience in marketing and print communications. Mike has a graduate certificate in Direct
In loyalty marketing there is also a “loyal customer/loyal employee” connection as well. Employees who genuinely care about their customers are loyal to their employer who encourages these relationships. • Customers become loyal if they develop a personal relationship with partners, salespeople, customer service, ownership and the company brand • The most successful organizations encourage employees to become part of a loyalty-based system
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• The best marketing, products and services connect with customers personally and emotionally
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Marketing from DePaul University, Chicago, an MA from Wesleyan University, Middletown, CT, and a BA from the University of Iowa. He can be reached at mike@mdavids.us or at 800-921-1221.