What is customer loyalty? I asked a number of business people this simple question and received similar answers from most of them. Most agree that customer loyalty means that the customer will come back, again and again.
However, what customer loyalty doesn’t always mean is that the customer is loyal to you, and only you. In other words, they may do business with you, but are also or still doing business with your competitors.
The concept of “wallet share” came to mind. I’ve been talking (and writing) about the concept of “wallet share” versus “market share” for many years. Quick explanation:
The concept of market share has to do with how many customers that are able to buy your product actually buy it. For example, if there are 100 customers in a given area that could buy your product, and 60 of them buy it, then you have 60% market share.
Wallet share takes the concept of market share to another level. Of those 60 people who buy from you, how many of them will still buy from someone else? If they only buy from you, then you have 100% of their “wallet share.” If they split their loyalty between you and someone else, you only have 50% “wallet share.”
At the highest level of loyalty, your customer only buys from you. In other words, they give you 100% wallet share.
So customer loyalty has two tiers:
The first is that the customer is a repeat customer.
The second is a repeat customer that doesn’t do business with your competitors – just you.
This is where my Amazement Revolution strategy of “partnership” kicks in. You want a relationship that is so strong that the customer wouldn’t think of doing business with your competitors.
I put together a quick “Top Ten” list of simple ideas to help you get to the level of partnership and 100% wallet share. Realize that these are common sense expectations that are easy to do – and unfortunately, easy not do if you don’t stay customer focused.
Deliver great customer service. It’s expected.
Always do what you say you will do.
Don’t be late.
Don’t make excuses or blame others – be accountable.
Help solve their problems.
If you catch a problem, call them before they call you.
Trust them, if you want them to trust you.
Be accessible and easy to reach.
Return phone calls, emails and social media comments quickly.
Create confidence. (Do all of the above and you will have a good start.)
So maybe the goal shouldn’t just be customer loyalty. It should be 100% customer loyalty.
(A few years ago I wrote an article titled “The Gap” which addressed the concept of wallet share. If you want to read more about wallet share, go to:
BOOK RECOMMENDATIONS:
“Reviving Work Ethic” by Eric Chester – Good customer service requires a good work ethic. While the book focuses on younger employees, those whose habits can be most influenced, I found the book to be beneficial for employees of any age. The book officially comes out in January, but they are currently available on the website. And the author will autograph the book on request. Go to: www.RevivingWorkEthic.com
“Up, Down, or Sideways” by Mark Sanborn – Here is another book from one of my favorite authors, Mark Sanborn, who wrote “The Fred Factor.” We are currently living in tough, unpredictable and often challenging times. This book will inspire you with ideas and suggestions that will help you succeed through it all. Available at www.Amazon.com – and just about every other bookstore.
Shep Hyken, CSP, CPAE
Shepard Presentations, LLC
711 Old Ballas Road, Suite 215
St. Louis, MO 63141
(314) 692-2200
Author of "Moments of Magic," “The Loyal Customer," the Wall Street Journal bestseller book “The Cult of the Customer” and the New York Times bestseller, “The Amazement Revolution.”
Shep Hyken works with companies who want to build loyal relationships with their customers and employees.
Copyright 2011 Shep Hyken, Shepard Presentations, LLC. All rights reserved. Reprinted with permission.
Last Updated: October 2011