Customers who return to do business with a company typically spend more than the average one-time … [+]
Customer loyalty is the goal. Customers who return to do business with a company typically spend more than the average one-time customer. Furthermore, if repeat customers are truly loyal, they evangelize the brand and recommend it to others.
If you’ve been following my work, you know I preach that there is a difference between repeat customers and loyal customers. While loyalty is the goal, I’ll take a repeat customer—for the right reasons—any day. I say “for the right reasons” because not all repeat customers come back because they want to. It’s just easier than finding somewhere else to do business. For example, it’s not easy to move a bank account. It’s a hassle to switch cable/internet companies. In a business, switching to a new software program can be a lot of work. These “sticky” companies drive repeat business, but for all the wrong reasons.
That brings us to a survey I recently discovered, OnePoll on behalf of DaySmart Software. They surveyed 2,000 Americans and came up with some interesting stats and facts. Below are some of the key findings:
· Three out of four (75%) customers are more loyal to a particular employee than to a business as a whole.
· Almost half (48%) of customers are so loyal to that favorite employee they would follow him or her to a competing business.
This means that if the employee leaves to work in a similar business, the company may lose the customer. We see this when a financial advisor moves to a different firm or a hairstylist moves to a new salon. It can happen in the retail world when a favorite salesperson moves to a competitor. We want the best people, so we should create a great process to support those people. This will send the message to the customer that you’re a great company to work with—regardless of who they talk to on any particular day!
Some other interesting findings in the survey focused on being a regular customer. It takes eight visits to be considered a “regular” at a business. I like that number, but if the focus is tied too closely to a large number of visits or length of time—as in trying to create a “lifetime” customer—you risk creating a daunting task or goal. I believe in breaking down loyalty into something much smaller.
Years ago, I came up with a concept called the Loyalty Question. It’s simple: “What am I doing right now (in this interaction) that will make the customer come back the next time they need whatever it is that we sell?” The idea is that we’re not focusing on eight return visits or a loyal lifetime customer. We’re just focusing on the next time—but we’re doing that every time. If we can get the customer to come back the next time, every time, that turns into a lifetime.
There are also benefits of being a “regular” at a business. The consumers surveyed said:
1. I trust the people at the business and their capabilities (61%).
2. The employees know my preferences (57%).
3. I know what to expect from the services (57%).
4. I enjoy the social rapport (49%).
5. I get discounts and/or promotions for being a loyal customer (44%).
I was pleasantly surprised by the fact that customers rated discounts and promotions as number five rather than number one. I know plenty of credit card users who only use their cards because of the loyalty program. Getting a customer to trust you, remembering their preferences, consistently meeting their expectations and making them feel connected with social rapport outweighed the appeal of a markdown. I love it when a loyalty program is about the connection to the company and not the discount. One is true loyalty. The other is marketing. Not that there’s anything wrong with a good marketing program that drives repeat business, but the big question remains: if you took away the perks, would the customer stay?
All this leads to at least two questions to ask yourself (and your team) about the customer service and experience you provide:
1. Is the overall experience we deliver to our customers as good as the people we have working for us? A rock star employee will hold on to a customer. If the employee goes to a competitor, you not only lose the employee, you lose the customer, too.
2. What are we doing to drive repeat business? Remember, there’s a difference between a perks-based marketing program and true customer loyalty fueled by a great experience.
If your answer to either of these two questions makes you pause, then it’s time to make some changes within your business. How can you spread the experience that rock star employee is delivering throughout your entire organization? What customer loyalty strategies can you implement? Hopefully, you will not lose your star employees—but if you do, be good enough to ensure you don’t lose your entire customer base along with them.