Before you answer the question, ‘What does a customer really want?’ Consider a broader question, ‘What is your definition of a customer?’ Although organizations deal with many types of customers, the definition should include two important components:

• A customer is someone who wants or needs your help, your service or your product, and is willing to pay for it.
• A customer is someone with whom your organization is attempting to create a unique and emotionally positive experience for which they will repeatedly purchase your product or service.

By defining your customer it becomes much easier to identify what your customer really wants. Above all, a customer wants a hassle free experience as well as to be individually recognized and treated with respect. Research shows that 96% of customers who are not treated with respect decide to never go back. Typically, customers will not complain because complaining just adds to the hassle of an already bad experience. Six out of ten customers will never return to an organization based on poor service … not poor products. They usually will not register a complaint with the organization; they just go elsewhere. Customers want a positive experience and want to deal with a service provider that has empathy and understands how they feel. They want a service provider who creates strong points of connection. A powerful point of connection creates a bond with customers and ensures a high level of trust. Trust builds strong relationships and a strong relationship ultimately creates customer loyalty. Also keep in mind trust is what your customer wants.

There are many requirements to building a successful and sustainable business:

• The ability to manage the organization effectively
• The ability to create financial growth
• The ability to innovate
• The ability to develop and sustain a loyal customer base
• The ability to make environmentally sound decisions.

When these five components are working in sync, an organization will experience sustainable success.

We know that loyal customers will always return to purchase your products or services, which creates a long-term stream of income. A satisfied customer who has had an average experience may or may not come back, therefore, creating a one time sales or revenue opportunity. Loyal customers always come back; whether it is once a week to their local grocery store or drycleaner, or monthly to their local pharmacy, or every April at tax time to the same accounting professional. No matter the business or industry, creating multiple, and consistent revenue opportunities has a very positive financial effect on the organization.

Additional advantages of developing a loyal customer base include their willingness to pay more for your product or service, and they are also more forgiving when your organization makes a mistake. As loyal customers, they trust your organization and have faith that you are fair. It is truly all about building relationships through trust and strong points of connection. Making the strategic decision to create a loyal customer base is one of the most important commitments you can make to the success of your organization.

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve sustainable results through management consulting, strategic planning, leadership development, executive coaching and youth leadership. For information on creating a leadership succession plan visit www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

• Become less controlling. Give yourself permission to not be in control of everything.
• Avoid bragging about how much work you have to do and how busy you are. Everyone is!
• Brighten up your work environment. Make your environment a fun place where you want to be and go.
• Take breaks. Take both mental and physical breaks, as they will immediately revitalize your energy.
• Accept the fact that every once in a while, you’re going to have a really bad day!
• Examine your rituals and habits and be willing to change some of them—our habits are sometimes an enormous source of stress. Be open and be willing to change.
• Let go of the battles you can’t win. Many battles are not even worth the effort if you honestly analyze the situation.
• Don’t get stressed by the unpredictable. Sometimes life just happens.
• Marvel at how often things go right. Focus on the positive not the negative.
• Do the hard things or the tasks you are dreading first, then you don’t have to stress about them all day.
• Ease off your ego, life is too short!

Service providers may always be dealing with some level of stress, but managing that stress is always under your control. If possible, avoid people or situations that produce stress for you. Determine where your stress is coming from, and think about how you need to react in order to reduce or eliminate the stress. You will begin eliminating stress by thinking differently and effectively managing your stress will help you become a happier, healthier, and more productive person.

Closely associated with stress management is impulse control, or specifically the lack of it. Lack of impulse control is normally identified by impatience or anger, and for some people it can be both. These two emotions are also stress-related as impatience and anger typically make people very uptight and anxious.

Effective impulse control is your ability to resist or delay an impulse, drive, or temptation to act. Has a comment ever come out of your mouth so fast that you really do not know where is came from? It was an unconscious reaction. By the time the comment was made, you wanted to take it back or crawl under the nearest desk. Controlling your impulses entails your capacity for accepting aggressive impulses, being composed and controlling aggression, hostility, and irresponsible behavior. People with low impulse control often say the first thing that comes to their mind. The result of this action, many times, is regret for letting that impulse go unchecked and leads to the oft-heard apology.

Here is a brief assessment that may be helpful in determining your current level of impulse control. Rate each statement with often, sometimes, or never.

• I leap before I look.
• I become impatient easily.
• Others seem too slow in making up their minds.
• I regret not giving more thought about decisions.
• I tend to be hotheaded.
• I explode with anger easily.

If you answered often or sometimes for even one of these six statements, you may want to set a goal to work on your impulse control. Like stress, you have 100% control of your responses, reactions, and impulses.

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses and individuals achieve high levels of excellence and success. Learn how by visiting our website or contact RAC directly at 800.799.6227.

A key factor that many organizations miss is the fact that they cannot have loyal customers if they do not have loyal employees. Employee loyalty can be defined as employees being committed to the success of the organization and believing that working for the organization is their best option. It is not about employee tenure. It is about wanting to contribute to the success of the organization.

Finding good employees can be challenging and time consuming. However, once you find the right fit and nurture the employee relationship, it can be quite costly to see that relationship go by the wayside. Depending on what research you read the cost to replace a hourly employee can be anywhere from 35% to 50% of their salary, and for a professional staff person, the replacement cost can go as high as 125%.

How can your organization foster employee loyalty?

1. Share your vision and strategic plan.
   Communicating what the organization stands for, where the organization is going, and how that impacts all stakeholders, particularly the employees, is key. Employees want and need to know what they are a part of and how their contribution will make a positive impact on the success of the organization. Give them a reason to be there!
2. Encourage ideas and feedback.
   Create an organizational culture that is open to new ideas and fresh perspectives. Your employees are on the front lines and they can tell you what is working and what might work better. In a recent client engagement where we were working with a cross functional team, a woman who had the least to do with the process made one simple suggestion that ended up saving the organization hundreds of thousands of dollars. Loyal employees make positive contributions!
3. Walk your talk.
   Everything you do and say needs to embody the values and culture of employee loyalty. Recognize and respect your employees. Let them know when they are exceeding goals and objectives, and praise accordingly. If there is a challenge, then give your employee the details straight up. Give employees open and honest feedback and they will reward you with loyalty.
4. Measure Your Company’s Employee Loyalty.
   You cannot manage or improve what you are not measuring. Your organization cannot improve its employee loyalty factor unless you know your starting point. Do you have a system in place to capture that data? If not, create one or find one. Give your employees an opportunity to tell you what is going well and what needs to be improved. Based on the data you will be able to make strategic decisions that will continue to foster employee loyalty. Your people really are your greatest asset!

Creating a loyal customer base can be the measurable difference between you and your competitors. Enhance your ability to accomplish that strategic goal by creating and maintaining loyal employees. Your employees will always be the key!

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses assess, measure and improve their employee and customer loyalty. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

“Economists say that the great recession, the longest and deepest since World War II, ended 18 months ago and the US economy is growing again. Growth is relative. That doesn’t mean sit and wait for things to improve. Rather retool for the economy that exists today.” – Rosalind Resnick, Entrepreneur Magazine, December 2010

As you review your company’s strategic plan and forecast for 2011, what can you do to ensure that your company will meet those objectives and goals? Ms. Resnick’s comment is absolutely on target, you can sit around and react to your environment, or you can retool your business objectives and take a proactive approach to success for 2011.

There are a number of strategic areas that may be worth focusing more time and effort on in your business as you begin to think about retooling:

• First and foremost, revisit your strategic plan. It is appropriate to focus on the 3-5 year horizon because you need to identify what you want to grow into. However, it is critical to focus on what your business needs to accomplish in the next 12 months. What are the critical success factors that your business needs to focus on in order to accomplish your forecast? Do your employees know what the 12-month plan looks like and do they know what they need to contribute in order for the plan to be successful? If you cannot answer ‘yes’ to any of these three questions, you are not ready for 2011.
• Second, identify what is really working and set a plan in motion to maximize it. Capitalize on your strengths. What product or service is your top seller, and how do you get customers to buy more of it? How do you grow your customer base for that product or service? Knowing your core business strengths allows your organization to maximize on existing opportunities where your company is already excellent.
• Third, try new and different things. After you have identified the core products and/or services of your business, look for new, out-of-the-box opportunities. Outside and uncontrollable distractions often cause us to pull the reins in and focus on what we have always done. Use these changing times to your benefit. Challenge yourself and your employees to look at every process, product line, service, and customer for new opportunities. You will be surprised what your team may find and suggest. At first blush an idea might seem outrageous, but outrageous could mean the difference between status quo and a new level of success.

The last thought to consider is leveraging your uniqueness. The business marketplace is becoming a sea of similarity. Your brand should communicate the value you bring to your customer from the eyes of the customer. Your brand is not really about what you think you do. The brand you should be leveraging is what value your customers say you bring to the table. Find out what your customers really think and start spreading that unique message.

If you did not like the results you generated in 2010, you have two choices. You can continue on your current path and hope for different results, or you can set your goals, maximize your strengths, honestly look for new opportunities, and incessantly market your brand with a voice that is meaningful to your customer. Hope is never a successful strategy, but focused action is … what will make 2011 a successful year for your company?

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses and individuals achieve high levels of excellence and success. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

The standard and measure of success in this millennium are loyal customers.” The Gallop Organization’s research also concludes that no matter how satisfied an organization thinks its customers are, if they haven’t made an emotional connection with their customers to develop a long-term relationship, satisfaction will ultimately be worthless. Satisfaction alone does not build a strong loyal customer relationship.

It is difficult to focus on loyalty when, as standard practice, most organizations seem to settle for satisfied customers. Satisfaction is a measurement of mediocrity. When a customer indicates, “I am satisfied”, it can usually be translated to mean the service experience wasn’t bad, however, it also was not exceptional. Satisfied customers are certainly better than disgruntled customers, but, building a loyal relationship is a must for long-term success. The key difference between loyalty and satisfaction is that customer satisfaction scores fail to predict how customers will actually behave relative to future purchases of your product or service. They may or may not return. On the other hand, loyal customers will consistently buy from you. By definition, loyal customers always come back to purchase repeatedly, which in turn produces a much longer and stronger income stream. The larger the loyal customer base, the greater your organization’s long- term success.

Economically, the best strategy for your organization is to pursue the creation and retention of loyal customers. This strategic initiative can and will separate your organization from the competition. Let’s face it, service today is mediocre in most organizations. Your organization can achieve a competitive distinction by developing a strategy of creating loyal customers. It has been proven that organizations with high levels of loyal customers typically grow revenues at twice the rate of their competition. However, the strategy of developing loyal customers must become a part of the organization’s culture and ingrained throughout. Since the culture of an organization will always drive the behavior of the people who work within the organization, people will behave differently if the culture is entirely profit driven. In this culture, people will do whatever they have to in order to produce profit, often times at the expense of the customer. This short-term thinking is an organizational disaster waiting to happen.

If the culture and strategy of the organization is to develop and retain loyal customers, then the contributors within the organization will focus on what they need to do to create loyal customers. Needless to say, in a culture that promotes customer loyalty, the entire organization must be devoted to valuing both customers and fellow employees who are often referred to as internal customers. Bill Marriott Sr.­ was noted for saying, “The way you treat your employees is the way they will treat the guest.”

When implementing a competitive strategy that deals with loyalty also take note that the customer experience needs to be aligned with organizational promises. When the customer’s experience is not reflective of what has been advertised, promised, or expected, the customer’s trust in the organization is undermined resulting in many lost revenue opportunities. Therefore, there is an urgent need to create strong relationships through frequent points of connection, and deliver unique service experiences as expected and promised by the organization’s marketing and advertising. The immediate impact of delivering an exceptional experience based on what is promised is a winning combination and a powerful weapon against your competition.

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve high levels of excellence and success by adopting customer loyalty strategies as a critical success factor of organizational success. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

In a recent study conducted by OI Partners, the data indicated that 54% of the companies surveyed do not have enough leadership successors in place and 14% of the companies are not sure if they have enough leadership successors in place. These findings confirm that many organizations are not prepared for the future, which means their organizations are not as sustainable as current management may believe. Closing the knowledge and talent gap needs to be a management strategy during good or interesting times in business.

The benefit of investing and growing employees for the future provides staggering long-term results for the entire organization. Some of the outcomes of employee development management should never lose sight of include:

• Maintaining or growing competiveness in the market
• Sustaining or increasing overall employee and organizational performance
• Building capabilities required to win when business circumstances change
• Sustaining the organization’s culture
• Shortening the time needed for an employee to make an important role transition
• Building strong leaders breeds sustainability
• Creating strategic alignment between the strategy, the employees, and the internal processes
• Innovation
• Creating loyal employees which in turn helps create a loyal customer base

The last point listed is particularly important. Revenue and profitability, albeit critical, are predictors of past decisions. Creating and growing a loyal customer base is a predictor of future success and sustainability. A key to creating and growing a loyal customer base is creating loyal employees. An employee’s loyalty to the organization is enhanced by working with each individual to create a personal development plan. Tim Shoonover, Chairman of OI Partners, said in a recent article “To sustain growth in your company, there must be a path to leadership. If an employee doesn’t have a leadership development plan in place and isn’t able to see her career progression she is less likely to be engaged or to expend discretionary effort.”

Right now organizations have a bit of an advantage, as employees are not as quick to pursue new career opportunities. But as economic conditions improve, disengaged employees will begin comparing and perhaps looking for new career opportunities. Therefore, creating and committing to an employee leadership and development plan is not only critical to organizational success it also plays a significant role limiting employee turnover to a minimum.

Employees who see a commitment to their growth and development are employees who give the organization 110%. That extra 10% is where innovative ideas come from that could propel your organization to new heights. What is creating an employee development process worth to your company?

Here are some questions that may be useful as you review your company’s employee development strategy.

1. If you had to fill a key leadership position in your company tomorrow, is there someone ready and able to fill the position? Are you confident he/she has the right skills, knowledge, and attitude or are you guessing?
2. Does your organization have a published employee development plan?
3. Do you or your team of managers have a documented development plan for each employee they manage?

If any of your answers to the questions listed above cause you concern or you just do not know the answer, then perhaps it is time to make employee development a priority. The sustainability and success of your organization depend, on it!

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve sustainable results through leadership development and executive coaching. For information on creating a leadership succession plan visit www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

Employees are much less likely to change roles or companies based on fewer job opportunities and fear of the unknown. Many employees have made the decision that there is more security staying in their current role even if their company made some cutbacks. Employers currently have the upper hand but that won’t last for long. As the business environment continues to achieve positive traction and new opportunities present themselves, disengaged employees will begin looking elsewhere. How many employees in your company have mentally quit and are just waiting for the right opportunity to present itself? We would recommend looking at three important issues: What is employee disengagement costing you today? Can your company afford an exodus of employees when the job market opens up? AND, what can you do to repair the disengagement?

What does employee engagement mean? “Engagement means that the employee is on board with the goals, mission, and values. Engaged employees are ready to serve customers in a manner that exceeds customers’ expectations. An engaged employee is excited about their functional role in the business, and is ready to give extra for the good of the business. An engaged employee has the training and resources to perform their job with pride and excellence.” (Excerpt taken from an unauthored article entitled Are Your Employees Engaged? A Guideline For Business Management)

Having engaged employees within your organization is essential in building a loyal customer base, which ultimately drives successful business results. Without customers there are no results. Therefore, if a percentage of your employee population is disengaged, what is it costing your business? A ‘point of connection’ is created every time your employees interact with a customer. Engaged employees are committed to ensure every ‘point of connection’ exceeds a customer’s expectation. Exceeding customers’ expectations creates loyalty and loyal customers create results. Our research shows that the financial difference between creating loyal customers as opposed to satisfied customers can be as much as an 87% to 99% increase in revenue over the life of a loyal customer. Disengaged employees may not even be helping your organization maintain satisfied customers.

A recent survey conducted by Kelton Research indicated five key areas besides compensation employees are searching for in this employer’s market. The survey asked the question “Aside from compensation, what would motivate you to stay in your current position?”

• 56% said: Being appreciated
• 51% said: A good manager I enjoy working with
• 46% said: Liking and respecting my co-workers
• 46% said: The opportunity to advance my career
• 45% said: The opportunity to learn and develop my skills

Not every solution requires money. Investing time, effort, and energy in your employees will make a significant difference in their level of engagement. Being appreciated and working with a good manager are no cost/low cost solutions that will make a significant impact on business results. Take time to recognize employee contributions, ask for input and ideas, include them in new projects, and be accessible. You may be forced to put out the daily fire but while you are dousing the fire your employees may be slipping away. This will jeopardize your relationships with your customers that your organization cannot afford to lose!

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses improve customer loyalty and eliminate employee disengagement. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

Significant changes in customer retention rates have resulted in extraordinary improvements in profitability.

Creating a new business model that focuses on loyalty would then suggest, in fact, a linkage between all elements of a business system: your employees, customers, and investors and the generation of profits. Providing customer value begins with a management philosophy that supports the cultivation of strong customer relationships and is implemented by having properly trained and motivated employees who know how to deliver value. Research has shown that customers who have an emotional connection and feel valued will repeatedly come back and do business with your organization as well as provide a strong referral base for new customers. Loyal customers repeatedly purchasing your product or service are what generate sustainable business growth and profit. However, your practices and processes that generate loyal customer relationships must be in place before you will begin to see a profitable impact. This model does not work in reverse, although many organizations by their actions appear to think the reverse is possible.

This new business model is important because it initiates a series of steps that can cascade through an organization as follows:

1. Revenues and market share grow as your best customers (loyal customers) build repeat purchases and recommend you to others who also become loyal.
2. Employee retention increases due to job pride and satisfaction, which in turn creates a loop that reinforces customer retention through familiarity and better service to the customers. Customers like doing business with people they know and your employees want to do the right things because it makes their job easier and far less stressful.
3. As costs go down and revenues go up, profits increase. Improved profits provide resources to invest in employee development and compensation (further increasing retention), and in new features and products that enhance customer value. Profits are important not just as an end in themselves. They also allow the organization to improve value and provide additional incentive and reasons for employees, customers, and investors to remain loyal to your organization.
4. Costs begin to shrink as the expense of acquiring and serving new customers and replacing old customers declines.

This loyalty model effectively provides insight to success versus failure in any organization. It is clear that the companies or organizations with the highest retention rates (retention of loyal customers) also earn the highest profits and maintain viability. As mentioned earlier, loyal customers reduce cost. In one study, it was found that in most service organizations word of mouth advertising accounted for one-third to one-half of all new customers. Relative customer retention also explains bottom line implications better than market share, scale, cost position, or any variables usually associated with a competitive advantage.

So what can you do differently for your business? Perhaps a good place to start would be to find better ways to create and sustain a loyal customer base. While there will be an investment, the advantages will be enormous for your customers, employees, and investors. Strictly from a financial perspective, revenues increase from improved service quality tend to be 10 to 20 times the costs associated with fixing the problem. What strategies do you need to implement today?

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve high levels of excellence and success by adopting customer loyalty strategies as a critical success factor of organizational success. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

Here is how it ties directly to your revenues and potential profits.

Your Loyal Customers (9-10) are those who are absolutely delighted with your products or services and their experience during the entire purchasing process and follow up. These customers will promote your organization through word of mouth (referrals) and will repeatedly purchase your goods or services. They are your loyal customers.

Your Neutralizers (7-8) are those who are unenthusiastic about their experience with your organization, not totally turned off, but not enthusiastic about it either. They are open to buying from your competitors or perhaps you if the right promotion or situation arises. They are your Neutralizers.

Your Diminishers (0-6) are those customers who are unhappy enough with their experience and with your organization to actively look for an alternative source for your products or services which immediately costs you a revenue opportunity. Your diminishers will raise expenses because now you need to spend more on marketing or advertising. They are Diminishers because they not only will not come back, but they will also actively try to take others with them.

Identifying the percentage of your customers who fall into each category: Loyal, Neutralizers, and Diminishers provide you with metric that will indicate future strength and direction for your organization. We call this metric the Customer Loyalty Score or CLS (http://www.resourceassociatescorp.com/blog/category/customer-loyalty/)

This one simple metric can provide you with an indication of your long-term future because this formula is an absolute predictor of your customers’ future purchasing behavior as opposed to their opinions which are collected through a traditional satisfaction survey. If your customer loyalty metric is going down, your future is not strong and proactive decisions may be needed. If this metric is going up, so will your profits and long-term growth. This metric can be to customer relationships, as an organization’s net profit is to financial performance. This single metric can for the first time provide a target for management and the entire organization to focus upon as an indicator of your business’ growth. No longer should it be the goal of business to only satisfy a customer, but rather it needs to focus on how to make loyal customers for your business!

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve high levels of excellence and success by adopting customer loyalty strategies as a critical success factor of organizational success. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.

Talk about setting up expectation! I looked at my husband and asked him, ‘Wonder what she would do or say if she had a full bar of customers to serve?’

Often times in the restaurant industry customers make an immediate contribution to a server’s compensation. I wonder if in any of this particular server’s training anyone shared that concept with her. Her attitude and behavior clearly communicated that the 15 of us were too much for her to handle and quite frankly an inconvenience to her evening.

This story is an example of situations that happen every day and it is unfortunate on two levels. The customer expectations were not met let alone exceeded impacting our decision to return and the server dramatically impacted her financial success based on her own inappropriate attitudes and behaviors. Not a good experience for the customer, a possible loss of the customer for the restaurant, and a personal financial loss for the server.

There are two great articles in the March issue of T&D magazine highlighting Chick-fil-A’s views on developing employees, developing future leadership, creating customer loyalty, and being innovative. Dan Cathy, the company’s COO states, “Our sole source of capital is customers. That’s it.” Chick-fil-A has reported their 42^nd consecutive year of sales growth and the restaurants aren’t open Sundays.

I don’t think it really matters if we are talking about restaurants or any other industry. Dan Cathy is correct. Customers are every business’s sole source of capital. Every team member and every contributor inside your organization directly impacts your organization’s relationship with your customer. The culture of true customer service and creating customer loyalty is in Chick-fil-A’s heritage.

What does your organization need to do or do differently in order to create an organizational value of exceeding your customer expectations and creating a loyal relationship? Have you ever quantified the financial benefit to your organization? I encourage you to evaluate the answers to these two questions, as it may be an enlightening exercise!

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses achieve high levels of excellence and success by adopting customer loyalty strategies as a critical success factor of organizational success. Learn how at www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.