Innovate May 2015

5 Key Drivers of Customer Loyalty

Written By: John Spence

Customers who are engaged,
satisfied and loyal:

• Spend more per purchase
• Repeat purchases more often
• Are less price-sensitive
• Are more likely to recommend and refer

It is for these reasons and many more that a chief aim of every business should be to increase customer loyalty. Yet, it is surprising how few businesses make creating a wonderful customer experience a true focus. If you want to clearly differentiate your business and drive higher revenue, profits and market share, here are five steps to creating more loyal customers.

One of the key mantras I teach around the world is: “Whoever owns the Voice Of the Customer owns the marketplace.” The business that listens, watches and learns from its customers and then applies what it learns to proactively improve its products and services has a huge market advantage. The goal is to use every method you can think of to listen to and learn from your customers — this includes everything from questionnaires, surveys and social media to customer advisory boards, VIP groups, lunch meetings and just picking up the phone and calling a few customers to ask them a handful of focused questions. Unfortunately, most businesses are pathetic at really listening deeply to their customers, which means this is a great opportunity for your business to gain a significant edge.

Companies that have wildly loyal customers are superb at managing the “Total Customer Experience.” They look at every aspect of the shopping, purchasing and owning experience and develop ways to make it simple, flawless and enjoyable. A great example here is Disney World, which is fanatical about making sure every single interaction with them, from booking a trip and visiting the park to returning home after the trip, is…magical. Disney now gives guests a single wristband that allows them to get into their rooms, order tickets, make reservations, pay for items and even have the characters call them by name (if they wish).

Creating highly loyal customers does not happen by chance, fate or good luck; it comes from thoughtful planning and superior processes. The goal here is to take the information you have learned from your customers and apply it across the entire total customer experience to create processes and systems that ensure you will consistently deliver a “wow” experience for every customer every time. One of the best ways to think this through is to look at the companies you admire for creating uber-loyal customers and adapt their best practices to your business. Some of the superstars that come to mind are Zappos, Amazon, Ritz-Carlton, Harley Davidson, Nike and of course, Disney World. What do these organizations do that creates such wildly loyal customers, and how can you adapt that to your business?

Let me make this one easy: You can train people to run cash registers and answer customer calls, but you cannot train them to be nice and enjoy serving others. Hire for attitude and aptitude; train for skills. And be sure to do a lot of training and continuously help your people get better at their jobs and deliver amazing products and services. A big part of that training is creating a very clear, specific customer service credo that will guide the behavior of your employees whenever they interact with a customer. Remember: Ambiguity Breeds Mediocrity.

The number-one factor in highly engaged, loyal and satisfied customers is…highly engaged, satisfied and loyal employees. To put it another way: the customer’s experience will never exceed the employee’s experience! Hire great people, treat them well, pay them fairly and give them lots of training and support, and they will go out and take great care of your customers. Far too few businesses understand that this idea is fundamental to building a successful and highly profitable organization.

Unless you have an endless supply of new customers who are happy to spend more with you regardless of how you treat them, I suggest you make it a major priority to take really good care of the ones you do have right now.

JOHN SPENCE has been recognized as one of America’s top 100 business thought leaders and as one of the top 500 leadership development experts in the world. He is the author of four books on business and life success.

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