We are all customers, buying products and services from a variety of organizations. As a customer, have you ever received service that you were not pleased with? What did you do?

Studies show that unsatisfied customers are very likely to tell others about their negative experience but are less likely to complain or tell the service provider about their poor experience and dissatisfaction. In fact, a significant number of people will simply stop doing business with a company without notification or explanation.

Is there a difference between satisfied and loyal customers? Does it matter? In his book, “Customer Satisfaction is Worthless: Customer Loyalty is Priceless”; Gitomer says, “Satisfaction is no longer the acceptable measurement of customer service success. The standard and measure of success in this millennium are loyal customers.”

We Love Our Customers by Hockenberry Management Consulting

4 Competitive Advantages of Customer Loyalty

    1. Loyal customers always return to purchase your product or service, creating a long-term stream of income.
    2. Loyal customers boast about your product or service to others they know, creating the most effective (and least expensive) form of advertising for your organization… word-of-mouth advertising.
    3. Loyal customers are willing to pay more for your product or service because they trust you to be fair.
    4. Loyal customers are more forgiving when your organization makes a mistake because of the solid relationship they have with you.

So, how do you get loyal customers?

3 important components to develop a loyal customer base

    1. Establish trust with every customer at every point of connection. People buy from people they trust and they welcome suggestions and guidance from people they trust.
    2. Create an emotional tie with your customer at every point of connection. Most buying decisions are based on an emotion, rather than a need. In order to do this, service providers must also be able to identify and manage their own emotions effectively.
    3. Utilize empathy to strengthen customer relationships. Empathy involves putting yourself in another person’s shoes, trying to understand their perspective.

How is your organization doing in the area of customer loyalty? How do you know? One simple way to measure loyalty is to ask customers what Reichheld refers to as the “ultimate question” in his book, “The Ultimate Question: Driving Good Profits and True Growth”.

The question is this: “How likely is it that you would recommend this organization and our products or services to a friend or colleague?”

From the answer to this question, Reichheld identifies three categories of customers: promoters, passives, and detractors.

  • Promoters are loyal, enthusiastic customers who repeatedly buy from you and tell their friends and colleagues about your product or service.
  • Passives are satisfied but unenthusiastic and may or may not buy from you again.
  • Detractors are unhappy customers who are likely providing the kind of word-of-mouth advertising that your organization doesn’t need or want.
So, how do you get loyal customers?

How about your customers? Are they promoters, passives, or detractors? Are they loyal or just satisfied? What difference is it making to your bottom line?

Making a strategic decision to create a loyal customer base is one of the most important commitments you can make to the success of your organization.

For more information or help on this and other topics, contact our team.