• Credibility
• Charisma
• Office Politics

Read more here on these hidden areas of leadership

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• Credibility
• Charisma
• Office Politics

Read more here on these hidden areas of leadership

Share This

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 your blog.
Jim

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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 .

I know your time is limited, so I want to thank you.  In return I hope my emails and website help you as a business owner or sales person.   

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The following appears in that book:

The heart of a virtuous person has settled down and he does not rush about things. A person of little merit is not at peace but walks about making trouble and is conflict with all.

We have a fascination with conflict hence the ratings for most of the reality TV shows. We even seem to afford more attention to presidential candidates that are in constant conflict over those that offer a quiet dignified personality.

The one place where this has not tainted our views is the business world. I find that in spite of our love affair with conflict that we still hold business people of dignity and virtue in high regard. This is a testament to the fact that we hold business success as a necessary component to the overall social good.

As with the eastern philosophies, conflict has costs attached to it while peace and virtue carries reward. As it is true in life, it is in business.

Do you run a business in a virtuous manner? As a leader do you avoid conflict and embrace dignity? While it may not be popular in television or politics, it is always a driving force in business success.

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The customer is working within a ‘lowest price’ position currently. The analysis had results that were very common with businesses that are competing on price, especially against big business competitors. The only successful implementation of being the price leader is that you have to be the cost leader. Price leader is a marketing term, cost leader is a strategy term.

While anyone can price their products or services below market price, very few small businesses can survive doing so. While big business may meet the requirements to be a true cost leader, small businesses suffer in the long term while attempting the same strategy. In order to be a true cost leader you must have the following statements be true about your business:

* You need a significant and sustainable cost gap over your competitors. In short you need to be able to buy materials or wages at an advantage over the competition.
* You must have superior knowledge of the specific market you compete in as well as management systems that lead to cost control.
* You will not be able to invoke a differentiation strategy, in other words it is costly to make your product or service so different in comparison to your competition. Differentiation has larger investment requirements to remain ‘different’ or ‘unique’. Remember, this is not the same as marketing yourself as unique. You can still show key reasons why your base should buy from you and not your competitor but to remain effective you must center on the similarities as well and show the price difference.

The bottom line is just that..the bottom line. Cost leaders make their money in quantity not quality. This is not the most glamorous of business strategies, but to make it work you have to understand it. The most important rule of thumb is that if you and your competitors buy materials or wages at the same cost as each other, cost leadership will not work unless it is in the short run. Short run strategies do not work as you never brand your business to your customers, and your systems internally will never gain momentum.

If you can not meet the requirements, then you need to get away from the strategy and look at other ways to position your business. In the future I will post the requirements for a differentiation strategy that most small businesses will find a little more appealing.

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