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.