Building Customer Loyalty – and Your Sales

Perception Lab, Inc.
The secure way to grow your business™

It’s a lot of trouble. It will cost you time and energy. How willing are you to do whatever it takes? What am I talking about? Customer Loyalty of course — that which gets much lip service yet has very little "backbone" in some companies. How willing are you to keep the customers you have now? For FedEx, they started working on keeping customers –– before they actually had any!

A Page From The FedEx Playbook
Many of us are aware of Fred Smith‘s graduate thesis on a hub-centric distribution system and the the ‘C’ grade he was later given. But what you may not know is that before FedEx went ‘live’, they spent two weeks handling, flying, driving, delivering EMPTY BOXES!! Yes. How easy would it have been to for FedEx to just get everything in place, complete the check list and open their doors for service? Eaaaassy. But instead Fred’s team made the extra effort of making sure they could really do what they were promising in their promotion. Imagine that: service which equals or exceeds the promotion! Imagine how many customers FedEx prevented from going to USPS or another carrier. Probably hundreds of thousands. And if you use FedEx today, you know you can count on them. And if you can depend on great service, you will likely stay with the service even when competitors come knocking and offer a cheaper rate.

But what about those times when things go wrong?

Bad-mouthing Happens; And It Will Cost Plenty
What's your plan? Do you go to the extra effort as FedEx did to ensure 100% quality control and Ritz-like customer experience? Probably not. Few businesses do. 1 out of 7 customers complain to a business when the customer is unhappy/irritated/frustrated/annoyed/disappointed; but what about the other 6? Hmmm. Who are they talking to? What are they saying? You can easily imagine. When you have experienced poor service, how did you react? Did you tell your friends? Family? Co-workers? Sure. Did you return? Maybe not. Many of your customers think this way –– more than you realize. No one is untouchable in this regard. Put another way, you can have great product, SKU selection, pricing and location, but if the service is poor or below expectations –– those intangibles you can’t qualify until experienced such as attitude, tone of voice and willingness to serve –– it’s too late. And if the business does not know for certain how they are being perceived by their clients, it can make the difference between life and death over a short time for the business.

To keep your customers, you have to know what’s working and what’s not working well. "Hey Mark, I know what my customers think of me and my business." Really? Read on. If you don’t know the specifics about how your business is being perceived, and its associated rationale, you can’t effectively manage. And unless you have someone unbiased and objective to provide the perception study for you, you won’t get the truth. Don't believe me? Think you know your customers THAT well? Do you think your customers are really truthful to your face? Ask yourself this one question: as close as they can be at times, does one spouse ever tell a small tiny lie to the other, BUT with good intentions (avoid a fight, etc.)? Of course. What about brothers or sisters? Sure. What about "best friends?" Of course. Come on. You know it's true. How much more so our business owners and clients! Ouch. So we have to be on our guard for this.

Okay, I think you got it. Or put another way, your customers will not likely be 100% honest with you about your business, but they will talk behind your back (I know as it is the foundation of my practice!).

So, here are 5 tips for keeping the customers you have and getting closer to how they may perceive your business (Be sure to print this out, post it somewhere and use a pen to tick off each of these items once you completed it):

1. Ask for their comments; make it easy; put suggestion boxes, comment cards, direct phone lines in your business. Equally important, just ask them when they come through the line or in contact with your staff, “Did we do a good job for you?” Note their comments, keep a log and go over every reported atta-boy or problem area at each week’s staff meeting (you do have a staff meeting each week, right?)

2. Keep customers informed. In your promotions, daily interaction, phone conversations and advertising be sure to incorporate what you are doing to improve the business for their benefit — shorter lines, better staff, more products, easier access, etc. You can't just say, "Lower prices!" as everyone does that (and few really have those prices anyway). I have read that the Container Store sometimes keeps store positions open for weeks to find the right personality as they can teach the needed skills. If you have been to a Container Store, you know how well they do at having the right staff mix and competency. Above all, their staff have the attitude and willingness to serve. WOW!

3. Take it seriously. Companies are famous about talking customer care and value but delivering poorly, usually because these same companies don’t measure how they are being perceived by their clientele in the first place. If you are the CEO, COO, CCO or other senior executive, now is the time to prime the pump and get your team on board with customer loyalty + more effective advertising/promotion. Do the math: it’s much cheaper to keep the clients you have than having to continually replace them. Better still put customer loyalty activities on your management team’s competency planning program and tie it to revenue and bonus. That’s sure to get attention.

4. Keep the media informed. Ok, maybe not CNBC will be knocking on your door, but when companies get serious about loyalty and improving their ‘business hygiene’ that’s a credible news story; what’s better is that with such an announcement tethered to targeted metrics, you can conduct a follow up communicating how it went and what the market’s feedback has been. Nice.

5. Hold Customer Summits. Go through your client list; identify the major accounts that are making up your revenue; and then invite them and their spouses to an all expense-paid event and update on your progress. So maybe you can’t afford to put everyone on a huge yacht for a long weekend, but do what’s appropriate for your clientele — rent a meeting room at a local upscale hotel, or the conference room of a nice restaurant. Be creative. But do it! Your clients will feel closer to you, feel more appreciated and better informed. Plus they will eat and have fun at your expense! You will see it returned in future sales and expanded revenue via their friends, coworkers and family.

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