This question has spurred hundreds, if not thousands of books, articles, and programs during the past few decades. In the never-ending quest to find the “magic theory“ which would instantly transform every customer into a loyal lifetime customer, we have lost sight of the basic fundamental truth about customer loyalty.
Customer loyalty is earned by practicing the three components of customer care. We must understand, embrace and embody this powerful truth from which customer loyalty is derived.
The three components of customer loyalty are customer service, customer satisfaction, and customer retention. Together these components form the cycle of customer care. These components are all separate, vital, independent entities, yet, each is interconnected and extremely dependent upon the other. Only when all of these components are working together in harmony and unison can the pinnacle of customer loyalty be obtained.
Let us briefly examine each element of customer loyalty.
Customer Service:
Customer Service is the act and spirit of serving the customer. Customer service is not only how you serve the customer it represents the true essence of a company’s existence.
The degree to which service is provided is a direct manifestation, reflection, and the execution of a company’s values, philosophy, and ethics. The employees’ beliefs, attitudes, and behavior have a dramatic and profound impact on the level of service that is provided.
Customer service is the foundational building block upon which customer satisfaction, customer retention, and ultimately customer loyalty is built.
Customer Satisfaction:
Customer Satisfaction is the achievement of meeting the customer’s expectations. The level of customer satisfaction is directly proportional to how well a company anticipates, understands, and meets their customer’s expectations.
Customer’s expectations are constantly changing. They are always in a state of flux and forever evolving. Thus, customer satisfaction must never be taken for granted. Companies must vigorously strive to define and exceed the customer expectations at all times to insure a high level of customer satisfaction.
The customer’s expectations encompass all aspects of a service experience. Expectations are formed prior to, during, and after each interaction with a company. Some of the factors which effect the customer’s expectations are advertising, prior experiences, influences from other people, personal beliefs and attitudes, preconceived impressions, and the overall atmosphere of the experience.
A high level customer satisfaction plus excellent customer service will produce customer retention.
Customer Retention:
Customer retention is the process of building relationships with current customers. Customer relationships are born by fulfilling the customer’s wants, needs, and/or desires. The relationship is then natured by customer service. The relationship blossoms and matures through customer satisfaction.
True customer retention is beyond merely initiating the latest business strategy or technique. The process is more involved than relying on an advertising campaign to foster customer retention. Retaining customers is even more complex than implementing any type of repeat buyer or reward program.
Customer relationships, like any other, require a strong unwavering commitment, complete dedication, and continual perseverance to survive and grow.
The deeper the relationship, the stronger the bond between a customer and a company, the greater likelihood the customer will continue to do business with the company. The longer a customer is retained, the more loyal they will become.
Do you want to earn your customer’s loyalty?
Improve your customer service, customer satisfaction, and your customer retention.
“Repeat business or behavior can be bribed. Loyalty has to be earned.” - Janet Robinson
Wednesday, February 18, 2009
Wednesday, February 4, 2009
Who has earned your loyalty?
The other day I asked myself, “what businesses have earned my loyalty?“ Trying to answer this question prompted me to ask another; "Why do I feel loyal to them?"
The Compact Oxford English Dictionary defines loyalty as “a strong feeling of support or allegiance.” In other words, as a consumer, what businesses do I feel a strong allegiance to? What have they done to earn my continued support?
I chose a simple exercise to answer these questions. First I listed each business I deal with on a regular basis. Then I add a comment about my feelings of support or allegiance, good or bad. Instead of listing the business by name I listed them by the service they provided.
Here is an excerpt from my list.
Electric Company - I feel no allegiance to them at all. I remain their customer simply because I have been too lazy to change providers.
Telephone Company - Another business I feel no allegiance too. My wife and I have recently been discussing changing telephone companies.
Automobile Insurance Company - This business I feel a sense of semi-loyalty. We have been their client for over 8 years. We remain clients because of convenience more than from any great feeling of satisfaction.
Hair Stylist - Total loyalty to this business. Every 6 weeks or so, for the past 4 years, they have continued to earn my repeat business with competitive pricing, quality work, and personalized friendly service.
Credit Union - Feeling extremely frustrated with them right now. For over 15 years we had felt a great deal of loyalty to them, but this changed recently (see blog article: “Eight Minutes to Lose a Customer”).
Grocery Store - I feel more loyal to their sale pricing than to the store itself. Usually our weekly grocery shopping is spread between 2-3 different grocery stores. The bulk of our spending depends on who has the best sale that week.
Restaurants - My loyalty is spread among 4 restaurants with varying cuisines. On a scale of one to ten, with ten representing my ultimate loyalty, these restaurants rate around a six or a seven.
Department Stores - I feel no loyalty to any particular store. My store selection is determined by where I can receive the best price on the items I want or need.
Automobile Repair Shop - This business I do feel some loyalty to. The owner has previous done excellent work on several of my vehicles.
Gas Stations - Again, I feel no loyalty to any particular brand. My spending is dictated by price and / or convenience.
And the list goes on…
When I completed this exercise I was surprised by how few businesses I actually fell a strong allegiance to. Apparently, there are only a few businesses in my life that have really earned my loyalty.
"You don't earn loyalty in a day. You earn loyalty day-by-day" JEFFREY GITOMER
I invite all my readers to compile their own list and share their results. I would venture to say nobody can honestly list more than ten businesses that have truly earned their loyalty.
Is the lack of loyalty I feel more a reflection of my attitudes and expectations or is it merely a response to the service which I typically receive?
Stay tune for the answer in my next blog article: How to earn the customer’s loyalty.
The Compact Oxford English Dictionary defines loyalty as “a strong feeling of support or allegiance.” In other words, as a consumer, what businesses do I feel a strong allegiance to? What have they done to earn my continued support?
I chose a simple exercise to answer these questions. First I listed each business I deal with on a regular basis. Then I add a comment about my feelings of support or allegiance, good or bad. Instead of listing the business by name I listed them by the service they provided.
Here is an excerpt from my list.
Electric Company - I feel no allegiance to them at all. I remain their customer simply because I have been too lazy to change providers.
Telephone Company - Another business I feel no allegiance too. My wife and I have recently been discussing changing telephone companies.
Automobile Insurance Company - This business I feel a sense of semi-loyalty. We have been their client for over 8 years. We remain clients because of convenience more than from any great feeling of satisfaction.
Hair Stylist - Total loyalty to this business. Every 6 weeks or so, for the past 4 years, they have continued to earn my repeat business with competitive pricing, quality work, and personalized friendly service.
Credit Union - Feeling extremely frustrated with them right now. For over 15 years we had felt a great deal of loyalty to them, but this changed recently (see blog article: “Eight Minutes to Lose a Customer”).
Grocery Store - I feel more loyal to their sale pricing than to the store itself. Usually our weekly grocery shopping is spread between 2-3 different grocery stores. The bulk of our spending depends on who has the best sale that week.
Restaurants - My loyalty is spread among 4 restaurants with varying cuisines. On a scale of one to ten, with ten representing my ultimate loyalty, these restaurants rate around a six or a seven.
Department Stores - I feel no loyalty to any particular store. My store selection is determined by where I can receive the best price on the items I want or need.
Automobile Repair Shop - This business I do feel some loyalty to. The owner has previous done excellent work on several of my vehicles.
Gas Stations - Again, I feel no loyalty to any particular brand. My spending is dictated by price and / or convenience.
And the list goes on…
When I completed this exercise I was surprised by how few businesses I actually fell a strong allegiance to. Apparently, there are only a few businesses in my life that have really earned my loyalty.
"You don't earn loyalty in a day. You earn loyalty day-by-day" JEFFREY GITOMER
I invite all my readers to compile their own list and share their results. I would venture to say nobody can honestly list more than ten businesses that have truly earned their loyalty.
Is the lack of loyalty I feel more a reflection of my attitudes and expectations or is it merely a response to the service which I typically receive?
Stay tune for the answer in my next blog article: How to earn the customer’s loyalty.
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