Leadership
Customer Loyalty Is Still Alive(?)
Human Relationships May Be A Little Less Confusing
Loyalty is a rare attribute in business. Customers are more price driven than ever, partly due to the fact that most businesses put their emphasis on just that. Businesses that focus more on differentiation usually see customers that have more loyalty and less of the price-shopping mentality. Even so, loyalty can still be an enigma to many business owners and sales people.
Jim Kane of the Brookside Group, a consulting firm, recently explained the formula for loyalty in CRM magazine. According to Kane, loyalty is broken down into six factors:
- Competency - Does the company have what I need?
- Integrity - Is it fair and honest to me?
- Recognition - Does it see an individual or just an account number?
- Proactivity - Does it anticipate my needs?
- Savvy - Does it understand I want to be loyal?
- Chemistry - Do I enjoy the experience of working with the company?
The truth is, customers want to be loyal. They would rather not change, in fact they openly resist change. Loyal customers mean consistent revenue, expected results leading to market anticipation and passive advocates leading the viral marketing campaign of your company and product.
How do you gauge your company? Start by asking the questions above to some key customers. Ask yourself the above questions, as both a new customer and an existing customer.
Kane sums it up: “Brand matters less than it used to. The burden is on companies to build a relationship with the buyer. If they do, then the customer doesn’t care as much about other options.”
For more articles on business strategy, please visit my blog at http://www.businessatwar.com .
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Written by Dominic Willett - Speaker, Author, Consultant - Visit Website
Posted on businessatwar.com
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I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Jason Rakowski
Dominic,
Thanks for the mention in your post today. If I can add two things that might also help your readers:
1. The benefits of creating loyal relationships are not limited to customers and clients. They also pertain to strategic partners, vendors and suppliers, investors, members, readers, sponsors, patients…you name it. When you build loyal relationships, not simply satisfied ones, you are given more opportunities - more business, better pricing, better terms, greater retention, greater frequency, vocal advocates and supporters, etc. But you also benefit in a manner often overlooked and undervalued: loyal relationships are more forgiving. They allow you to make mistakes without abandoning you and taking their business somewhere else.
2. When putting these six loyalty behaviors in place, remember that the first two, Competency and Integrity, are important (your relationships need to know that you can deliver the product and/or service you promise, and they need to know that you are treating them fairly and honestly), but being competent and having integrity is not enough to build true loyalty. For that, you need to focus on their personal needs more than your own. Recognition is seeing them as individuals, not demographics or market areas. Proactivity is anticipating their future needs, not simply responding to their current request. Savvy is understanding their world and the challenges they face every day. Doe you really know what they are thinking, feeling and needing? Finally, Chemistry is about creating enjoyable experiences through both personal and virtual (web) interactions.
Good luck with you blog.
Jim