Customer loyalty has become an all-important ingredient in the battle to survive in the cut-throat, cost-conscious and globally world competitive that is careening to what promises to be an even more tumultuous new business millennium. So how to you get your customers to stay with you, even when the going gets rough?
You seduce them with out-of-this-world service.
business gurus discuss the delivery of customer service, they insist that it's
the little things that count. And they're right. But as Walt Disney said:
"There's no magic in magic. It's all in the details." So before you focus on the
little things that count, create a system that allows you to repeat each
important little thing that counts, time and again.
don't rely too heavily on a computerised database to build relationships between
you and your customers. See customers as individuals, not market units. Use
technology to enhance relationships, not replace them. Remember that each
customer is a human being. So get out from behind you desk or counter and really
get to know him or her. Discreetly probe beyond surface recognition. Find out
what they need and want, what they like and dislike, where they work and live,
what they do for fun. Always find time for a chat. Get to know what makes the
relationship tick. Greet them by name. Congratulate them on their birthdays,
anniversaries and other happy events. Commiserate with them when they suffer
This proves that competitive advantage is more a matter of how you manage your relationship with your customers than the price or quality of the products you sell.
But you can keep most of your customers for life. Romance them. Make them fall in love with you. If you don't, someone else will, and he or she will reap the benefits. And they're substantial.
costs five times as much to find a new customer than it does to keep an existing
one. If you retain only 2% of your customer base, you'll reduce your operating
costs by 10% and increase your profits by 34%. Statisticians calculate that if
you increase your average customer retention from an annual 80% to 90%, you'll
double the total lifetime value of your customer base. For example, if you
retain 80% of your customers every year, you'll have to replace them all over a
five year period (5 x 20%). However, if you retain 90% of your customers a year
over the same period, you will have lost just over half of your original
customer base (5 x 10%).
Check this simple equation:
To delight customers and turn them into lifelong fans, you must understand the nature of service. It's a combination of tangibles and intangibles, experiences and outcomes, all designed to win customer approval. Build a customer value package that combines things and experiences which create a total customer perception of value received. The quality of service provided is a measure of the customer's delight with the entire experience of doing business with you.
you plan your business strategy, build it around customer value. Include a
commitment to regularly communicate with the people who support your operation
by phone, in-person, by fax and by newsletter. Make them feel part of your
business family. Spoil and flatter them. Make them feel special.