Seven Tips to Build Customer Loyalty
I would hope that everyone knows that it costs less to keep and existing customer than to find a new one. That being said, I wonder how much time and effort you really put into making your current customers happy? Here are seven ways you can help build customer loyalty.
Most businesses will spend much more time and energy trying to find new customers than they do retaining and ensuring that their current ones are happy. A good customer retention management (CRM) plan is very simple–it costs much less to keep an existing customer happy than it does to replace an unhappy one with a new customer. If you take care of your customers, then word of mouth will spread and they will deliver you new customers. Additionally when it comes time to spend more money, they will look to you to fill their needs without shopping around. This is not brain surgery. Here is an example of what I am talking about.
One of the most important things to your customer is pretty simple and very obvious. Any guesses to what it is? Their name! There is a lot of power in remembering someone’s name and addressing them by their given name as opposed to something more generic.
I can’t function in the morning without my first cup of coffee. Since I am usually running around before work, I find myself stopping at Dunkin Donuts on my way to the office each day. It is usually always the same two or three people that work the drive-thru window each day. After a couple days of visiting this particular store, I drove up to the order station one day and I was greeted with “Good morning Erick, this is Emily. Are you having your large ice coffee with skim milk only today?” I was completely blown away and overcome by an immediate feeling of importance. Not only did Emily take the time to remember my name but she also remembered what I ordered as well. As if that was not enough, when I got to the window, she noticed that I had a car seat in the back of my car. She asked, “Did you already drop off your daughter today?” WOW! That is a lot of information to recall when you consider that she must see hundreds of customers each morning.
The next day I pulled up to the order window and again was greeted with, “Hi Erick, do you want your large ice coffee with skim milk only today?” I replied, “Yes, please. Thank you Emily.” She replied back that it was not Emily but Nicole. So now they have two people who know me by name and what I commonly order. Rest assured that when I want a coffee, even though there are five other places in town to do, that Dunkin Donuts has my business, not because they provide a better cup of coffee, but because they provide a pleasant experience and the little act of using my name shows they care about providing stellar customer service.
Here are seven tips you can follow to build better customer loyalty.
1. Hire the right people. People are not your businesses most important asset. The right people are! Many businesses are terrible at hiring people. They will hire anyone to fill the void and then provide little or no training. Then they throw them in front of customers hoping for the best. If you spend more time recruiting and hiring the right people with good personalities, you will reap the rewards ten-fold with a larger list of happier customers.
When I was managing a sales team and needed to find new sales people, I never turned to a head hunter or any of the standard mediums for locating talent, like monster.com. Nope! Not me! I did most of my head hunting at retail stores and restaurants. If you meet a sales associate in a retail store that has a great personality and is attentive to your needs while showing knowledge of the products they sell, then that is a person that you need to interview. If I was looking for a salesperson now, rest assured that Emily and Nicole from Duncan Donuts would be on the top of my list.
Think about it this way… I have a sales position that I need to fill that will start out with a $40,000/yr package. I know full well that most retail jobs and restaurant jobs are not paying much over retail. However, for the minimal money these associates are making they still go above and beyond to provide excellent customer service. How do you think they will perform and what will their attitude be like if I offer them twice as much money? The odds are good that they will go above and beyond the call of duty.
2. Provide a sensational experience for your customers. While good customer service is important, sadly it is not enough. Studies have shown that customers who are “emotionally connected” to your place of business will be likely to spend 48% more money with you than a customer who is merely satisfied but not emotional invested.
In the case of my Dunkin Donuts story, I have an emotional investment in that particular store because Emily and Nicole have taken the time to provide a sensational experience.
3. Set performance guidelines. If you don’t know what your performance and customer service guidelines are, how do you expect a new employee to know and become successful? Prior to hiring any employees you should outline behaviors, mind set and actions of how employees should act, speak and respond to customer needs and requests. With every business I have owned or sales team that I managed, I always developed a “ten commandments” of customer service and retention that each employee was expected to follow. It was very detailed but simple to follow and most importantly, if left nothing to chance. Even if I had an employee that was not very outgoing, they still brought a quality experience to the customers simply because they know the “ten commandments”.
4. Provide on-going training and support. Airline pilots go through a pretty intensive training to obtain the skills needed to fly large passenger airliners. However, they are required to continue with ongoing training and every so many hours they are required to pass additional test. The same holds true with your business and employees. Good customer service skills are not nature for many people. Effective training must be reinforced and taught on a recurring basis. I used to make it a point of running hypothetical scenarios each week with my team to ensure they had the tools and knowledge needed to provide the customers with the best possible support and experience with my company.
5. Reward and recognize your star players. Since it is so hard to find and keep good employees, do everything in your power to retain and motivate them. While it is true that all employees want to be paid well, but in many cases they have a bigger desire to be treated with respect and to be shown appreciation. It is hard to find and keep good employees. So do everything in your power to retain and motivate them. Sure, employees want to be paid well, but they also want to be treated with respect and shown appreciation. The front-line supervisor has the greatest impact on motivating and retaining employees. When you think about it an employee only gets paid every one to two weeks, so the satisfaction of their pay happens every 40-80 hours of work. However, they still have to come to work and are expected to perform during that time. An employee that is show respect and feels like the owner and management really cares about them as an individual, will keep that person happy and make them want to do a better job, no matter what the pay amount is.
6. Survey your customers and reduce your defection rate. An average of 20 percent of a company’s customer base is lost each year to the competition. All businesses experience this, but few do much to improve it. The best way to improve retention is to reach out to your customers on a regular basis and ask how things are going and what you might be able to do for them. I used to send out a monthly report card to all my clients and asked them to fill it out and return it so I could go over it with my employees. I found that just about 100 percent of the time, my employees were so happy that I shared the results that they worked harder than ever before to improve the customer service and relationships. It definitely motivated my people to do a better job.
7. Seek out complaints. I am not going to lie, I love hearing positive comments for a job or service that I provided for a customer. However, they say for every one person who says something nice about your company, there are 10 who are not happy with their interaction with you. Most people will not openly confront you with their unhappiness which makes it very difficult for you to fix the problems. What makes this worse is that if they are not telling you that they are unhappy, you can rest assured that they are telling their friends and family. I always encourage my customers to share their opinions with me. Some don’t mind being open while others are more shy. To make it easy I always incorporate a feedback system online that allows my customers to provide feedback in a comfortable manner. Once those customers know they can openly talk with me without the feeling of me attacking them back to tell them why they are wrong, I find that they become much more open with me and in many cases they turn any negative thoughts around without me even needing to get involved because they know I listen and I care.
No, it is not brain surgery, but if you overlook this important part of your customer relationships, you will soon find that you are spinning your wheels trying to sustain rather than working on growing. Your customers are your most valuable asset–treat them as such.
