Nine Ways To Build Customer Loyalty
October 18, 2007
You've read the studies that show it costs many more times to win a new customer than to retain an existing one. You know the secret to making use of this statistic is to increase customer loyalty. But since customer loyalty is not something you can go to OfficeMax and buy, you may be racking your brains trying to figure out where to start improving the loyalty of your customers.
Some of the facts might surprise you. Research shows that the reason most customers leave has nothing to do with the product. In fact, most customers say they are satisfied right before leaving. According to Allegiance, Inc., a provider of enterprise feedback management (EFM) solutions, companies need to go beyond customer satisfaction to build loyalty and engagement. Allegiance has identified nine ways to increase customer loyalty to help companies keep their valuable customers coming back. And to keep companies from having to spend the extra money to replace lost customers.
“Companies are losing customers at a staggering rate without really hearing from them or understanding why,” said Kyle LaMalfa, Allegiance best practices and loyalty expert. “By identifying what drives customer loyalty and engagement, companies can begin to develop best practices that will have a direct impact on customer retention and profits.”
Following are Allegiance's nine common-sense recommendations for keeping your customers.
1. Give customers what they expect. Companies need to first identify and understand customer expectations, then provide value for the dollars spent in terms of product quality and service. This is fundamental.
2. Go beyond simple reward programs. Points and rewards encourage repeat purchases, but don’t actually build loyalty. True loyalty comes when customers purchase products without being bribed.
3. Turn complaints into opportunities. Quickly resolve customer complaints to build loyalty and show them you care. Monitor things like time to resolution and customer satisfaction levels once complaints are resolved.
4. Engage customers in a two-way dialog. Gather feedback consistently from multiple sources, respond to feedback quickly and personally, then organize feedback to track results.
5. Build opportunities for repeat business. Monitor what customers request most and offer products or services that compliment other purchases. Use technology to track, classify and categorize open-ended feedback.
6. Survey customers and solicit feedback. Use short surveys that are unbiased and well structured. Employ random sampling to avoid survey fatigue.
7. Create a centralized system for managing feedback throughout the enterprise. Technology such as enterprise feedback management will help to centralize surveys and customer feedback and track both qualitative and quantitative information.
8. Tie customer loyalty and engagement to business outcomes. Track customer feedback over time and compare with revenues and profits over that same period. Determine how outcome should be measured, whether by satisfaction, likelihood to purchase again, likelihood to recommend, or other factors.
9. Use analysis to predict future loyalty. Analyze information to reveal the most important area of focus for customer loyalty and how it changes over time. Use feedback data to understand customer intentions and motivations (not just what they buy, but why).
For more information, visit www.allegiance.com/9ways .