Building Customer Loyalty Through Quality

Customer experience and loyalty are closely connected, yet brands often find it difficult to integrate them effectively. Serving your customer better does not necessarily mean serving him/her in a more expensive manner. The goal is to ensure that you have aligned your service elements with each and every customer’s need.

Leadership is not aligned. Leadership in your organization needs to be crystal clear on the experience your consumers want and what you are going to offer. That means spending in-depth time with your customers—and the people you would like to be your customers—to understand their needs. You can’t stop with answers like “I want a faster transaction.” You need to know what customers mean by faster and how they expect “faster” to feel. 

There are, however, several common mistakes that businesses make when implementing customer experience plan that can have an impact on the success of their customer loyalty program. The three most common mistakes are outlined below. By avoiding these three pitfalls, your business can increase customer loyalty:

Treating customers unequally: A common mistake businesses make is that they undervalue the loyalty of customers with smaller wallets.We are so focused on driving revenue today that we fail to recognize the potential of tomorrow's revenue generators. High spenders receive the majority of communications and reap most of the program rewards. But customers have different spend potentials as they progress across the life-stage continuum. Young adults typically lack the wallet size of established career people. Though they may have minimal potential today, young adults should not be ignored or alienated. Start building relationships with them now so that when their spend potential grows, you already have their loyalty.

Ignoring your competitors: We always think that we’re better than our competitors, but I can guarantee they are contacting our customers and trying to make them switch. Make sure you are keeping an eye on your competitors and try to ensure your perceived service is better than theirs. 

Ignoring customer feedback:  We can’t learn anything if we don’t take action. If a customer leaves you feedback, make sure you follow up with them and make sure they feel listened to. Use the feedback to create a better experience for all your customers.

Customers don't have to keep buying from you, and they don't have to tell their friends how great your business is. But if you put in the effort to earn their loyalty, that's exactly what they'll do.An ongoing challenge for any company is the retention of customers. It is well known that getting new customers costs much more than maintaining ones already doing business with you. Failure to keep your customers at the center of your strategy will result in wasting time and money languishing in one or more of these loyalty pitfalls. In a tight economy, you can't afford that mistake.

Word of Mouth and Customer complaints

Companies need to find out what is most important to customers and what is the best way to get more customers. Today one client told me that one of his regular customer got upset with his employee and said that he will never do business with them. This is not a new story for businesses dealing with hundreds of customers everyday. But if one customer gets upset with your business, is it really going to effect your business? Yes! It will. A problem may not happen very often but still be a problem that will cause customers to defect. Word-of-mouth is one of the primary influences of purchase behavior. Positive word-of-mouth can increase the success of your brand, yet negative word-of-mouth can destroy brand reputation.

Research has repeatedly shown that word-of-mouth information is an important factor in consumers’ purchasing decisions. Dissatisfied customers tell about twice as many people as satisfied customers. Technical Research Assistance Programs (TARP) reported that dissatisfied complainers told a median of 9 to 10 people about their experience versus satisfied complainers who told 4 to 5 people. A General Electric study found that 61 percent said the opinions of friends were useful, whereas only 29 percent said advertising was helpful. A Louis Harris study showed that 72 percent used word of mouth most often, whereas only 33 percent used advertising most often. In a Whirlpool study, 38 percent relied on friends and relatives and only 6 percent on advertising.

In his classic summary of the impact of word of mouth, Arndt reported that mass media dominate in the product awareness stage, but informal sources—that is, word of mouth—are of major importance in the product evaluation stage. He also found that negative word of mouth had a stronger effect on purchasing decisions than did positive word of mouth. Customers are more likely to use word-of-mouth information for riskier products, higher-priced products, and a costly problem resolution. Average consumers receive a minimum of 200 marketing communications a day or 1400 per week. They act on only about one of the 1400. In contrast, consumers act on approximately one out of three word of mouth messages.

The Internet has given unhappy customers a way to spread their word-of-mouth gripes even further. There are numerous websites where customers can complain about their latest awful experience. Intel, Nike, Mrs. Fields Cookies, and Hilfiger have all been blasted. Some companies are monitoring these sites to use the complaint feedback to improve. Others are trying to stop the sites by accusing sites of trademark infringement.

It happens a lot that we hate customers when they complain.  Keep in mind: If customers do not complain, companies lose the opportunity to find out why the customers defect. While increasing complaints sounds counter intuitive, that is exactly what companies should do if they want to retain customers.

Most research has found that complaint resolution yields customer loyalty. A classic study conducted by TARP for the U.S. Office of Consumer Affairs found a direct relationship between customers who complain and their intent to repurchase. For products costing $1 to $5, 70 percent would buy again if the company resolved their complaint. For customers whose complaint was resolved on the spot, 95 percent would buy again. Even among those whose complaints were not satisfactorily resolved, 46 percent would buy again. Only 37 percent who did not complain would buy again. For products over $100, 54 percent would buy again if the company resolved their complaint, and 82 percent would buy again if it is resolved quickly. 

There is no getting around customer complaints, regardless of your industry. Although no one likes receiving a complaint, they present you with an opportunity to identify and rectify specific problems with your current systems or product. They can also help you to develop your relationship with your customer by allowing you to demonstrate that you value their trade by taking their concerns seriously and dealing with their complaint.

Remember - it costs at least five times as much to gain a new customer than keep an existing one. Keeping a complaining customer should be the top priority, and at these cost ratios you can afford to be generous in your time and effort.

Freedom to choose

The freedom to choose may be the most powerful attribute and precious you have in your life. It shapes who you become, how you express yourself, the success you achieve, and your influence in the world. You are a product of your choices, not your conditions. Your choice will determine whether you become a person who is truly indispensable or one who is hardly missed. Choice is essential to freedom and anatomy, and freedom is at the core of everything we want in life, including feeling strong, secure, and resilient; finding meaning; and experiencing joy and peace. These are the things that make us feel alive and cause us to become more engaged. Freedom, therefore, is critical to your happiness and well-being.

By the time you lay your head on the pillow at the end of the day, you will have made hundreds of choices that will affect the quality of your life. The nature of these choices will affect the quality of your life. The nature of these choices will determine how much freedom you have and the degree to which you live an empowered life. Many choices you make today will enable you to control your destiny, and some of them will put your destiny in the hands of others.  Freedom is yours for the taking- even at work- but the problem is that we all frequently fail to embrace what is immediately available and already ours. That’s because many people think that freedom lies “out there” in a better boss, a more enlightened culture, a different job, a bigger office, or a more solid customer base rather than “in here”, in them.

But freedom is a choice. Freedom is a state of mind. It is established from the inside-out. Not choosing is itself a choice. When you abdicate this most basic of freedoms, you imprison yourself. You choose to become helpless, powerless, mindless, less influential, and less happy. You’ve benched yourself in your own game of life. If you work in a high-paying job for a toxic boss who makes your life miserable and you say,” I have no choice,” what you really mean is, “I am choosing to prioritize making money over my own job fulfillment,” or “I am choosing to embrace safety versus risk, or the known instead of the unknown.” In reality there are other jobs that will enable you to pay out your bills, and other leaders who are more enlightened.  For any number of reasons, you are not willing to confront the uncertainty, That, in and of itself is a choice. By rationalizing that you no choice, you are choosing not to recognize legitimate alternatives that are yours for the taking. You are stuck in a comfort zone of inaction that is functional and safe, but leaves you dead and disengaged.

Research from Gallup, Walker information, Hudson Institute, and others shows that approximately Seventy-five percent of the workforce is disengaged at work and are not loyal to their companies. You know them, because you work with them.  They are in the next cubicle, down the hall, in your department, on the front line, and yes, even in the executive suite. So, what about you? If you had the opportunity to hire you tomorrow, would you do it?  

When you will realize your career is a result of choices and not conditions, the effect will be absolutely liberating. You will begin to think big and act bold. You will become impassioned and engaged. Coworkers will look to you for leadership and inspiration. Leadership does not come from having an official title but from making choices: to serve others, take on risk, assume responsibility and discover a life where passion and excitement replace ho-hum routine.  

There has been a lot of research that shows that every leaders ask how they can motivate their people. Therefore, if your are unhappy with your job and with your work environment, there are basically three choices: fix it, change it, or leave it. Whatever decision you take, it is your personal decision. Remember: Taking responsibility, engaging yourself, and getting involved not only help you to be more satisfied at work, it also will help to live a more rewarding private life.

Multicultural Customers

 Globalization has brought everyone in one global market where people from different ethnicity and life styles communicate in one culture which is called business culture. But still we all struggle when we communicate with a person of different culture. Culture means a way of life for a group of people. It defines what is acceptable. Culture is a set of shared ideas about how to live and how to get along with people. I have been asked about the cultural differences in business dealings regularly by my clients in workshops.

Learning about diversity is an opportunity to develop new ways of thinking and new perspectives. For any business to succeed, employees need to be able to adapt to new or ambiguous situations and learn new standards and practices. Understanding multicultural diversity helps you increase your job satisfaction and increase customer satisfaction by recognizing variations in customer needs, values, and beliefs. Understanding will help you communicate despite accent and language differences.

Several studies have shown that the success of international business depends largely on employees’ intercultural communication competence. Employees need to adjust communication skills to fit cross-cultural needs. Businesses must develop a culture of inclusiveness to achieve their goals. The building blocks of this culture are empowerment and education to enable employees to reach their potential, corporate flexibility to meet customer and employee needs, and open two-way communication to promote information and opinion sharing.

Cultures differ on what is beautiful, ugly, humorous, risqué, and embarrassing. Culture determines what foods are considered edible, what foods are taboo, and what foods taste good. We differ on what is appropriate personal hygiene and clothing. Colors mean different things in different cultures. Culture affects logistical needs in terms of money, transportation, measurements, and sizing. People in many other countries think Americans are backward because we do not use the metric system. Imagine their confusion with our measuring system. They think using feet and inches is rather strange.

Remember that our standards are culturally influenced as well. We queue and consider cutting in line rude. In other countries, they crowd, and first shove, first serve wins. We should not take cultural slights personally. They are a reflection of cultural background and not meant to offend. For example, men from some other cultures are not accustomed to dealing with women as equals or professionals. Therefore, we should not take offense if they treat women differently.

Most non-Western cultures value harmony and balance, and so people avoid direct or negative confrontations and believe in saving face to minimize embarrassment. They believe that maintaining group harmony is more important than expressing personal opinions. In over two-thirds of non-American cultures, the needs of the group, company, or family are more important than the needs of an individual. This is the very opposite of mainstream American culture. Americans think they should express their opinion even if it is in opposition to the beliefs of others in the group. In general, mainstream Americans believe in planning and controlling the future and bringing about change. We believe new ideas and new ways of doing things are usually beneficial. This is not the case in most other cultures. Other cultures use history as a guide for the present and believe tradition should be maintained.

The art of listening and speaking is greatly valued in many Hispanic, black, and Asian cultures. You may have had the experience with someone who fidgets, picks up papers, and turns his back momentarily to look at something while you are talking. How did you feel? You probably felt as if the person was not listening. He would tell you that he heard everything you said. You don’t believe it though, because he was not attentive. This may offend in not only some cultural situations but also based on gender and regional origin.

Body language is more important to people from other cultures than it is to mainstream Americans. There are many different meanings in eye contact, facial expressions, hand gestures, body movement, and proxemics. Determine the customers’ culture, and learn the critical nonverbal differences. A smile is understood almost universally as a sign of goodwill. However, whom we smile at, how often we smile, and under what circumstances we smile does vary. We think service providers should smile and make friendly conversation with customers, whereas in other cultures providers should be reserved and respectful toward customers. We consider service providers as equals. Elsewhere they may be seen as a different social class. Cultures differ on whether browsing, touching merchandise, and trying on apparel is acceptable.

If you are not able to understand customers because of a foreign accent, it is okay to tactfully tell them you are having difficulty. Ask if they will slow down a little bit so you can get all the information correct. Do not pretend to understand if you do not. Take the time and listen to the pattern of speech so you will be able to pick up a few key words. There is no need to repeat one word over and over. Be careful how you say you can’t understand. An abrupt “I can’t understand you” or “What did you say?” is rude. Keep job aids available for translations.

It is the spirit of etiquette that matters, not the letter. It is all right to ask about etiquette differences. It is okay to observe the other person’s actions. If you genuinely make an effort and make a mistake out of ignorance, it is all right to apologize. A mistake is often overlooked out of embarrassment or pride, and people may deny they were offended, but an apology will be heard and appreciated.

Learn how your customers prefer to be addressed. Koreans write their last name first, but when they come to the United States, they reverse it to fit in. Some countries do not use last names. Ask, “How would you like me to address you?” Even if you must ask more than once, pronounce names correctly. Do not give someone a nickname just because it’s easier. Americans believe that using first names is friendly; in other cultures, first names are disrespectful. Americans assume we can address anyone in a group. Elsewhere, whom it is acceptable to address is based on age and gender. Be formal until you are told differently. Avoid assuming anything.

What is it like to speak English or another language as a second language? People may be anxious about being misunderstood, feel inexperienced, or be passive and not ask questions when they should. When immigrants speak their native language among themselves around people who do not understand it, it is a misconception that they are trying to exclude outsiders. The real reason is that they feel less isolated, it’s easier, and it reduces stress. Speaking a new language is a strain.

We may assume someone who cannot speak our language does not understand it. The truth is that it is easier to understand than it is to speak it. Those of us who have learned another language know that pronunciation is the toughest part. In addition, speakers often confuse pronouns, mispronounce words, use incorrect words and endings, and have different voice intonation and inflection stressing inappropriate words or syllables and speaking in a different rhythm. How do you react to an accent? Do you assume the person is uneducated, not assimilated into the culture, and ignorant of grammar?

Americans believe that it’s all right to point out an employee’s mistake or complain. In other cultures, it is inappropriate because the service provider would lose face. Asian and Hispanic customers tend to complain in much softened terms. Asians consider it wrong to say anything negative. To save face, an unhappy Asian customer will just disappear even more quietly than a mainstream American customer. If you ask directly if everything is satisfactory, you may not be able to tell if it really is or if it is a vague answer to cover up real dissatisfaction.

Companies need to increase the cultural literacy and sensitivity of their employees. Education will help them adjust their customer service behavior. We need to familiarize ourselves with the cultures we serve and learn about their values, attitudes, and norms. Their perceptions, how they see the world, are based on their culture. Many people believe that different means wrong. We cannot assume our “common sense” is everyone’s common sense. If we make judgments about people and do not make an effort to see beyond stereotypes, we will be unable to provide our customers with exceptional service. Realize that everyone is different in some way. None of us sees the world in exactly the same way. The bottom line is that everyone should receive respectful, fair treatment. We should be polite and conduct ourselves professionally. Character traits to develop are open-mindedness, tolerance, adaptability, a sense of humor, curiosity, empathy, and respect.