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Is Customer Loyalty Dead?

When a company meets some or all of our expectations we usually say we are "satisfied." When a company goes a few steps farther and exceeds our expectations by creating more value than we expected, we might then be "very satisfied" or even, "delighted." Research shows that it is only the customers in the group above the "satisfied" category that remain loyal over time....

On the flight home from Colorado yesterday I got a chance to catch up on some of my reading. There was one thing I read that really stuck in my mind and made me think. It was the statement that "Loyalty is dead".

I don't buy into that idea. Loyalty may be harder to earn then ever before and, may in fact be a thing of the past in companies that don't earn it. In companies that consciously and painstakingly set up processes and mechanisms for creating value for all of their stakeholders - customers, employees, stockholders, suppliers and communities, loyalty is alive and well, and rewarding them with profits and repeat business.

It's easy to buy the concept that the customer is fickle and loyalty is dead because it abdicates us from the day to day responsibility of performing our due diligence in finding out how to better serve our customer's needs.

As I travel around the country speaking about customer retention and loyalty, I routinely ask CEO's, VP's and Managers how often they get personally involved and speak to customers and former customers to ask them how they might do business better. Here's what I have found from my informal research: many of these Managers do speak to their customers but here's the rub - they tend, more often then not, to speak to their best and biggest customers.

While focusing attention on 20% of the customers that bring them 80% of their business is important, I know they are missing tremendous opportunity when they neglect to spend time speaking with the smaller or less frequent buyer, and, critically, the buyer that has recently quit them. There is so much to learn from our customers (and employees) if only we would get in the habit of asking.

Many companies would benefit tremendously if Managers and Customer Contact people routinely and simply asked questions like, "How could we make it easier for you to do business with us?" or "What two things could we have done to make your experience with us better?"

Building long-term customer (and employee) loyalty is a process. It is a building process of carefully listening to what our customers (and employee) expectations are, how they are changing and how successful we are at meeting and exceeding them. We all measure service by comparing what we expected with what we received. When a company meets some or all of our expectations we usually say we are "satisfied." When a company goes a few steps farther and exceeds our expectations by creating more value then we expected we might then be "very satisfied" or even, "delighted." Research shows that it is only the customers in the group above the "satisfied" category that remain loyal over time.

My guess is that all your customers do not feel the same way that your top 20% do, and that you may be missing some wonderful opportunities to uncover unmet customer needs by simply talking to them a little more. In addition to your annual customer surveys, have you designed simple-to-respond-to customer feedback devices that give them a chance to communicate to you regularly? Are there feedback mechanisms in your billing statements, delivery boxes, promotional materials and web sites? Are each one of your telephone reps told to ask one simple question like, "If there was one thing we could have done today to make the ordering process even easier for you, what would that be?"

I surely wish more people would ask me this question, because I usually have something to say. If the woman that just sold me a cellular phone today had asked me that question I would have said, " You could have made sure that you had the right literature (and that the information was organized in a way that was understandable to the layperson) and that you listened more carefully to what my particular needs were. You could have asked me what price range I was most comfortable in, where I would use the phone the most, and you could have let those last three phone calls go to voicemail so we didn't have to be interrupted so much."

To the salesperson that didn't sell me the cellular phone yesterday I would say, "You missed the sale by not asking my assistant my level of need (which was urgent) when she called for information, you could have faxed me something in larger than eight point type, you could have followed up the next day, rather then me having to phone you back (you were on the phone when I called) and you could have called me back by 5PM yesterday and I would have probably bought the phone from you". Oh well, you win some you lose some.

JoAnna Brandi is Publisher of the Customer Care Coach® a weekly training program on mastering "The Art and Science of Exquisite Customer Care." She is the author of books such as "Winning at Customer Retention - 101 Ways to Keep 'em Happy, Keep 'em Loyal, and Keep 'em Coming Back" and "Building Customer Loyalty - 21 Essential Elements in ACTION."

A Speaker and consultant, she is publisher of the bi-weekly Customer Care Tips Bulletin. To receive her free bi-weekly tips bulletin, sign up at www.returnonhappiness.com. You can also reach JoAnna at 561-279-0027 or e-mail joanna@customercarecoach.com.