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How To Avoid Killing Customer Loyalty

Smart businesses are becoming very aware of the need to optimise their customer service and customer experience (CX); those who have true customer loyalty can withstand any unexpected yet inevitable business hurdles.

We live in a dynamic and complicated world where consumers have more choice at their fingertips than ever before; attaining true customer loyalty is very difficult to master, yet losing it can be easy and quick.How To Avoid Killing Customer Loyalty

The Seven Step Dynamic Value Loyalty Ladder grows customer loyalty exponentially at every step; leading companies use this ladder to master their market with wallet share. However, one slip on a step of the ladder doesn't send you back to the previous step, it can send a customer's loyalty crashing to the very bottom, never to be reached again. The higher a customer climbs on the loyalty ladder, the more loyal and more costly when there is a slip or a fall.

Through a simple phone interview, your customers will tell you exactly what they appreciate, what your point of difference is, what they want, and how they feel, and leading companies are the ones who are listening.

Research has continually proven that half of 'satisfied customers' defect to other companies for a better deal. Customers who rate a company 8 or 9/10, can not be considered loyal. A 10/10 appreciation score is the only way to ensure true customer loyalty. When a 10/10 appreciation score is given, it's found the people don't shop for the product: they shop for the experience.

There are two ways you can kill customer loyalty during the service experience: failing to act when you should have, and acting when you should not have. While there's many things that could go wrong in this situation; these are the two common scenarios.

Failing to act when you should have

It's very common to chat with friends and family at social gatherings and someone pipes up about a bad experience they've had with a company. The story always starts the same, there's been a failure to act by the company.

Acting in the interests of your customers must always be a top priority, especially when it comes to replacing or refunding a faulty product. Referring to company policy for a common sense problem is a critical mistake and the quickest way to kill loyalty.

In failing to act on a simple request (and blaming the company policy), you could lose very loyal customers in an instant. The poorly handled incident will most likely be relayed to many others and to several feedback forums. Even if the issue is resolved by management after, the snowballed damaged had been done.

The damage can be worse than you think - not only the loss of repeat, and possibly lifetime spend from a loyal customer, but also the referrals and prospects.

The cost is difficult to calculate but likely significant. A company's service and 'company policy' has failed them when a team member fails to fulfil a basic request. They failed to act.

Acting when you should not have

If the steps on the Dynamic Value ladder have not been taken in order, skipping from one to the other can radically backfire and kill any loyalty that was made. After the 'requests' step on the seven-step loyalty ladder is 'suggestions'.

When making suggestions, often this is where companies get sales trainers to come in to help demonstrate the way to find out customers' wants and needs in order to garner a higher rate of up-sells or cross-sells.

The challenge here is: if you haven't first listened to customers and earned a level of trust, they're not going to listen to your subsequent suggestions.

Companies who are masters at listening to and handling their customers' requests have a huge conversion rate into their up-sell suggestions. When you go out of your way to help customers, you prove your value to them and that makes the customers open to your suggestions. Especially if those suggestions prove that you were listening to their individual needs in the first place.

The quickest way to act to kill customer loyalty in action is when a suggestion is made without a level of trust to begin with, without a request from the customer being fulfilled. The 'sell' is on, the perceived level of trust is low and the care is gone. You've killed loyalty.

Gaining true customer loyalty and leading your market occurs when all of your company's processes are optimised towards the customer experience: consistently delivering dynamic value.

Rise in your market and develop true customer loyalty by climbing the Dynamic Value ladder - embrace true introspection over expectation and learn when and when not to act.

By being aware of which steps to take and when your team should and should not act; you are empowered to gain the ultimate allegiance of your market and knowledge to prevent action or inaction killing customer loyalty.

Author Credits

Darrell Hardidge is an international author, speaker and innovator of the Client Appreciation Index. Darrell shares the knowledge and best practices of No.1 companies in his book, The Client Revolution, and through his CX strategy company SAGUITY. For more information, visit his website at www.saguity.com.
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