Author: JoAnna Brandi

These days, most people appreciate their customers, especially the customers that have stuck with them through thick and thin in this daunting economic time. While there are still some consultants that speak out against the "myth" of loyalty, this consultant still thinks the benefits of strategically developing loyalty are vast.

These days, most people appreciate their customers, especially the customers that have stuck with them through thick and thin in this daunting economic time. While there are still some consultants that speak out against the "myth" of loyalty, this consultant still thinks the benefits of strategically developing loyalty are vast. In fact when we take an eagle's eye, big picture view of loyalty there are at least 25 ways you can leverage loyalty for success in your organization.

At a recent meeting with Vistage.com Chief Execs in the Orlando area, I challenged them to come up with the reasons loyalty is important and critical for healthy growth. Here's the list we developed:

1. It costs more time, energy and money to get new customers (than to keep the ones you have)

2. Your best customer is the competition's best prospect (so it means you'd better be good!)

3. They are your best source of referrals

4. You know what to expect from them, so there is less learning you need to do over time

5. They give you peace of mind

6. They bring in a steady revenue

7. They are willing to give you truthful and useful feedback

8. You can spend less on advertising and marketing

9. They share positive word of mouth in the marketplace (some even love you so much they become your evangelists and give you "lovemarks")

10. They give you the opportunity to fine tune your relationship skills and make them happy

11. They trust you so they are more likely to buy on the "upsell"

12. They give you the opportunity to "right" a problem

13. They work in partnership with you (so they are thinking about your goals as well as their own)

14. They set the bar higher and you need to keep improving ("What have you done for me lately?" can be a great motivator for innovation and improvement)

15. Your whole industry benefits when the customers are involved in helping you improve

16. There is a link between happy customers and happy employees - more employee loyalty means less turnover, less recruiting and training costs and more "intelligence" in residence 

17. They become part of your R&D team (I know a company who now does all their R&D on their customers sites, reducing the overhead in their company and delighting the customers at the same time - it's an honor to be chosen as an R&D site)

18. There's less of a learning curve (like in any relationship, we learn each other's needs over time)

19. The sales cycle is faster (they learn your processes and even learn workarounds for the ones that don't work well)

20. They provide you with testimonials (and these days new customers want to know about the  experience of real customers - we don't much trust anyone's "marketing message" anymore)

21. They often give you competitive info to help you get better and sometimes get an edge

22. There's usually less of a price objection (because they know the real value)

23. They help you connect to others (broadening your networking reach in the marketplace)

24. A good loyal base allows you to have a more selective strategy and choose the customers that are best for your company (And give the bargain hunters to the competition)

25. The profit is higher

Depending on your fixed costs, profitability can be from 25% - 100% higher when you are able to keep just 5% MORE of your profitable customers. That's a powerful growth strategy!

The execs in my meeting were amazed as they created this list and kept watching it grow at my prodding ("What else? There's more, what else?") Sometimes we need to step back to get the full view of a subject. Sometimes we have to work with others to put the pieces together and see the whole picture.

Loyalty is an emotional attachment. It doesn't always just mean longevity. Sometimes a "loyal" customer goes away for a while due to a real crisis, a cost cutting boss they can't talk to about value, a change in circumstances, a move, a change in product line - any number of things. If the customer is really loyal - and emotionally attached to you and/or the work you did together, they are still willing to be part of your sales force, still willing to say good things about you to others, still willing to refer you to friends and colleagues. Often, when you maintain your good relationship with them, even if they can't buy now, they will find a way back to you.

Same thing with employees - someone can remain loyal to the company, the brand and the mission and still move on. If they are willing to act as your reference for how great a place it is to work, and send their friends over to you - it's still a "loyal" relationship.

There is great value in loyalty. Do you have a plan for building yours? 

Faithfully,

JoAnna

Copyright 2009 by JoAnna Brandi. Used with permission.