Posts Tagged ‘Customer Loyalty’
Wednesday, June 1st, 2011
“Quality in a service or product is not what you put into it. It is what the client or customer gets out of it.” – Peter Drucker
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.
Tags: Customer Loyalty, points of connection, relationships, resource associates, sustainable, trust
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Wednesday, December 29th, 2010
2011 is fast approaching and many sales organizations have already strategized their sales goals and objectives for the New Year. Some organizations may be finalizing their 2011 projections as we speak. No matter where your company is in the forecasting process it is critical to have established and clearly defined sales goals. Sales is all about being focused on generating the right activity that will effectively fill your funnel, and therefore net the results your organization requires.
In addition to defined goals there are several other criteria that foster success in sales:
- Sell with questions not answers – Potential customers for your product or service really don’t care what you have to say. Your sales pitch or sales script is really the last thing they want to hear. What potential customers really want are their questions answered. Their questions are indicative of what is really important to them. When you understand what is important to them, you create or uncover their personal buying motive. Spend more time asking questions about what they want or need. Use your product or service knowledge to answer their questions concisely while moving directly into the next question. Remember that it is really about them … not about your knowledge. Help a potential customer make a buying decision through the questions you have asked rather than trying to sell by guessing at which features and benefits you think may be important to them.
- People buy based on emotions – Another powerful reason to sell with questions is because it helps you uncover personal buying motives. Buying motives are typically emotional as rarely do people make buying decisions based on logic. Someone could decide to buy a car but they purchase a Volvo specifically for the safety of their family. Safety is an emotional reason. Most men and women resist the need to go to a new barber or hair stylist. Getting your hair trimmed or styled is a very practical exercise. However for many people the resistance to change is based on the fact that, “no one can do my hair exactly the way Joanne does it.” That response represents a personal and emotional attachment.
- Build relationships not orders – Success in sales is about relationships. Orders are nice but the benefit is short term at best. Creating relationships built around a management philosophy of creating loyal customers means you get to take orders from that customer for life because they keep coming back. And, they keep coming back because of the relationship they have with you and your company. If you promote the sales philosophy of taking orders you are promoting the idea of shopping around, looking for the better price, or the biggest discount. Promoting loyalty mean your customer all ready knows the service or product is great and they truly appreciate the way they are treated and served as a customers. A strong relationship is critical to the long-term success of sales organization.
- Think – Sales is a profession that can never be mastered. There is always something to learn, a new technique to be mastered, and a more thorough way to understand the emotional buying motives of your potential client. Therefore you must always be thinking, learning, and honing your skills. If you truly believe that you have mastered your sales profession then I am here to tell you, you are your biggest obstacle to your sales success. Personal growth and development as a sales professional is key to generating the income you desire.
- Spend your time wisely – Time is money, so allocate your time as if your were actually allocating real dollar bills. Money truly is what you are throwing away every time you don’t manage your time wisely.
2011 is going to be a great year because it is time we take control of our success and economic destiny. Success in sales is exciting but requires dedication and work. How can you take some of the tips above and apply them to your success in sales? Start today—2011 is right around the corner.
Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in helping businesses accelerate results through sales development and sales coaching. For information go to www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.
Tags: 2011, Customer Loyalty, obstacle, RAC, Resource Associates Corporation, Sales, sales goals, Success, Time
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Wednesday, December 22nd, 2010
Customer loyalty is fast becoming a key strategic initiative for most businesses because loyal customers stay with your organization, and will continue to buy your products or services. Revenue and profitability are important business indicators, but too often they reflect decisions an organization made yesterday; whereas growing a loyal customer base is a key predictor of future success. When an organization is focusing both on profitability and loyal customers, they have the best chance of creating a sustainable business.
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?
- 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!
- 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!
- 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.
- 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.
Tags: contribution, Customer Loyalty, employee loyalty, profitability, RAC, Resource Associates Corporation, Strategic Planning
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Wednesday, December 15th, 2010
“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.
Tags: 2011, branding, Business Success, Customer Loyalty, entrepreneur magazine, RAC, Resource Associates Corporation, strategic plan, world war II
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Wednesday, September 29th, 2010
According to Jeffrey Gitomer author of Customer Satisfaction is Worthless: Customer Loyalty is Priceless, the answer is very clear. “Satisfaction is no longer an acceptable measurement of customer service success.
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.
Tags: Customer Loyalty, Customer Satisfaction, gallop, gitomer, Marriott, RAC, Resource Associates Corporation, strategic
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Wednesday, September 1st, 2010
Often times when companies have to squeeze the financial belt, developing employees and creating future leaders gets pushed aside. However building a sustainable company requires having a leadership growth and succession plan in place at all times.
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.
- 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?
- Does your organization have a published employee development plan?
- 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.
Tags: Customer Loyalty, employee loyalty, future leaders, Leadership, leadership succession, OI partners, Succession, Sustainability
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Wednesday, June 9th, 2010
 Significant changes in customer retention rates have resulted in extraordinary improvements in profitability. One survey found that a 5% increase in customer retention consistently resulted in a 25% to 100% increase in profits. These almost unbelievable results would suggest that there must be a powerful force, (your emotional connection to your customer) which needs to be understood and effectively managed.
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:
- Revenues and market share grow as your best customers (loyal customers) build repeat purchases and recommend you to others who also become loyal.
- 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.
- 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.
- 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.
Tags: Customer Loyalty, customer retention, emotional connection, employee retention, margins, profits, RAC, Resource Associates Corporation
Posted in Customer Loyalty | 2 Comments »
Thursday, May 20th, 2010
In his book, The Ultimate Question, Fred Reichfield (www.theultimatequestion.com) suggests a simple measurement to determine customer loyalty. His contention is that you have three types or levels of customers resulting from their experience with your organization. Determining which category each one of your customers falls into can be measured by asking one question, “How likely is it that you would recommend us to a friend?” If the responses were sorted on a scale of 1-10 with 1 being ‘not at all likely’ to 10 being ‘extremely likely’, the responses of 9-10 are your loyal customers and provide you with the best word of mouth advertising; 7-8’s are generally not excited about their experience but found their experience to be okay or average; while anyone rating their experience as a 6 or lower is clearly not happy with their experience and may even be angry.
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.
Tags: advertising, Customer Loyalty, diminishers, marketing, neutralizer, RAC, Reichfield, Resource Associates Corporation, The Ultimate Question, word of mouth
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Wednesday, April 28th, 2010
After running several errands, my husband and I stopped at a local chain restaurant for dinner Monday evening. We typically eat at the bar as there are several TVs lining the header of the bar, and its provides a great way to catch up on the day. We noticed very quickly that the service was slow, but we waited patiently for the server to move in our direction. As we waited, I started observing the bar area and there was one server handling the area. The bar area seats 30 people and there were 15 people seated in the bar totaling 9 parties. It was clear from the body language of the server that she was growing frustrated. The server made her way to us and took our drink order, gave us menus, and proceeded to tell us that she was swamped based on the number of people she had to take care of leaving us with the underlying impression that the service was not going to get any faster or better. I watched her communicate the same message to the rest of the parties sitting at the bar as she served drinks and took orders. (By the way, she never delivered food. Another server from the kitchen delivered the food when it was ready. And, her customer population did not grow the entire time we were there.)
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 42nd 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.
Tags: ASTD, capital, Chick-fil-A, communication, Customer Loyalty, Customer Service, customers, Dan Cathy, RAC, Resource Associates Corporation, server, T&D Magazine
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Wednesday, April 14th, 2010
Perceived value as defined by customers creates loyal customer relationships, and customer loyalty is the best predictor of your future strength and growth potential.
The value you provide to your customers is always compared to the value your competitors provide: therefore, value is your customers’ perception relative to similar products or services in the marketplace—your competitors.
Perceived value occurs at the intersection of what customers want and what they get from you versus what they could get from your competition. You can only sustain customer loyalty by continually meeting your customers’ product/service qualifications, specifications, or expectations. You also need to meet their needs in the order that customers deem important while maintaining a favorable comparison between you and your competition. In your marketplace, your competitors are the alternative suppliers your customers use to form their comparative value perceptions. How would your customer define perceived value?
For example if your customers expect your product to perform error free, to be delivered on time, to be supported by timely and personal technical support, and to be properly billed at a fair price, you must be good in all categories to get an “A,” and you must be at least as good as your competitors. If you deliver a product that meets all of their design specifications but are unable to provide personal technical support, you failed in meeting an important criteria; therefore, the perceived value will decrease. For every mark you miss, the value as defined by your customers decreases and you slowly lose the ability to develop a loyal customer relationship. To create and sustain loyal customers it is necessary to consider every contact with each customer as an opportunity for you to provide value—every time. Every service point is critical and every service point has a level of expectation from the customer that must be understood and managed. We call these contact points—points of connection.
Every point of connection gives your organization the opportunity to emotionally connect with your customers. Your customers will judge your value and their emotional tie at every point. Developing and implementing a strategy of creating a consistent emotional connection with your customer creates value, which creates loyal customer relationships.
We know that loyal customers will always return to purchase your product or service, which create a long-term stream of revenue. Another advantage of loyal customers is that they will consistently boast about your product or service creating the most effective and least expensive form of advertising for your organization. Additional advantages of developing a loyal customer base is their willingness to pay more for your product or service, and they are also more forgiving when your organization makes a mistake. Why? As loyal customers, they trust your organization and have faith that you are fair.
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. Your individual contribution is also a large part of that success.
Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC has specialized in business and management consulting, strategic planning, leadership development, executive coaching, and youth leadership. For more information visit www.resourceassociatescorp.com or contact RAC directly at 800.799.6227.
Tags: competition, Customer Loyalty, Customer Satisfaction, customer value, perceptions, points of connection, RAC, Resource Associates Corporation, Success, supplies
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