Customer Loyalty: What Are You Doing ?

All too often we focus so much on getting new customers that we forget about who’s supporting us now! I believe the rule of thumb is it takes 5 times as much effort to get a new customer than it does to keep an existing one.

Customer satisfaction is the main force in developing loyal customers. Why are Loyal Customers so important?

  • Repeat business.
  • More open to try new products from a reliable source (you).
  • They become Brand Ambassadors.

There are several things you can do. A loyalty program, special incentives on certain products and giving them the first chance on buying a new product line before it hits the street are just a few examples. How about a simple thanks via an email or postcard. When was the last time one of your vendors thanked you for your business? Probably not many, and if they did, you’re sure to remember them.

Have you ever calculated what a customer’s worth is over time? Say you have a 30-year old contractor that usually buys $5,000 worth of your stuff a year. Doesn’t sound like much, but if you keep him happy, you probably will have him for 30 years before he retires. So assuming he doesn’t grow his business or you don’t come out with anything new for him to buy over the next 30 years, he would have spent $150,000 with you. Is he worth keeping? I’d say so. So what are you doing to keep him happy? Unless you’re selling a proprietary product, your competition is knocking on his door every chance they get. Give your customer a reason to stay.

I know many of you who follow me don’t buy shoes online, but I’d bet that if you asked your wife if she’s heard of Zappos, she’d say yes. I picked them as an example and even wrote a post on their book, Does Customer Service Deliver Happiness, where they show that by even selling name branded shoes online, they could, in many cases, outsell the brand itself  in the online arena. The way they did it was with customer service.

So here are some points for you to consider when evaluating your Customer Service department:

  • Try to keep the personal touch (human being) as the initial touch point if you can.
  • Empower your CS people to solve a problem immediately without having to go through 3 levels of supervisors.
  • Reward customers with a loyalty program as a way of saying thanks.
  • Customer surveys are a great way to get feedback, not only on how you’re doing, but for getting ideas for future products.
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