Earning and Keeping Loyalty = Customers for Life

Gary Magenta
Sr. Vice President of Client Solutions,
Root

We customers are a finicky bunch. It only takes one bad experience to destroy our loyalty to a brand. Think about your own buying habits. How have they changed over time? Is there a brand that you once loved that you are no longer enamored with? Stores, hotels, restaurants, and retail banks all face a similar challenge: to earn and keep the loyalty of customers like us. And in most cases, they are falling short – for one key reason: They don’t deliver a great experience to every customer, in every location, every single time.

Lifetime Loyalty

Why is customer loyalty so important? Consider the dollars spent in a retail clothing store by one customer over a lifetime. As a college student, Marie buys clothes for herself in her favorite store. After she’s married, she buys for her husband and their kids in their new hometown. Later, she buys for grandchildren while continuing to buy for herself and her husband. When Marie retires to yet another town, she finds the nearest store of that brand and continues shopping – because the experience meets her expectations just as it did in all the other places along the way. Marie is a customer for life. By earning her loyalty, this store chain captured thousands of dollars over the years, as opposed to selling just one item of clothing to a young shopper. Now, consider all the Maries across one brand, and the financial impact of customer loyalty becomes clear.

But earning loyalty is just the first step. Businesses have to keep a customer’s loyalty by being focused on delivering on the brand promise every time, everywhere. As consumers, we want to feel connected to a brand, like part of the family. When we feel that connection – whether with Walmart or Nordstrom, Taco Bell or Ruth’s Chris – and if we get the experience we expect, as promised by the brand, we’re loyal.

Recovering Lost Loyalty

Maybe even more important than earning loyalty is a brand’s ability to recover to a customer’s satisfaction after a service breakdown. We’ve all heard that an unhappy customer tells 10 people about a bad experience. But today, with social media, that unhappy customer tells hundreds of thousands in an instant as the most compelling stories go viral. Have you seen the YouTube music video, “United Breaks Guitars”? If so, you’re among the 10 million people who have watched this since 2009. That’s a lot of sharing!

We’re a nation on the move; we often visit more than one location of our favorite brands. One bad experience in Toledo can make us avoid the same store in Topeka. And because we have more options, it’s easy to make a switch if “my brand” doesn’t deliver. So now more than ever, companies must relentlessly work to win and maintain customer loyalty. Their financial well-being depends on it.

What Goes Wrong?

We’ve seen two situations that most often cause customer loyalty to erode: when a culture doesn’t match the brand promise, and when all areas of the business aren’t working together as a system.

    • The culture: In any kind of business, the culture that exists throughout the company mirrors the customer experience –
      the relationship between the frontline employee and the customer will be the same as the relationship that the employee has with the manager. Therefore, the culture that you create with your people is the culture your customers will experience.
    • The system of the business: The customer experience can break down when challenges occur at any level of the organization. Frontline employees may be failing with customers. Multi-unit managers may not be leading their people effectively. Corporate employees may not deliver solutions to support the customer experience. Operations, Marketing, Merchandising, Finance, and HR leaders may not be aligned on the customer experience or brand strategy.

Three Basic Steps

So how can you drive customer loyalty in your organization? We need to give customers a consistently great experience with the brand and create customers for life. Focusing on creating customers for life rather than increasing sales transactions will result in sustained financial performance and future growth.

3 critical steps for creating customers for life:

      1. Be clear on your brand promise, and communicate it to first to your employees at all levels of the organization, then to customers.
      2. Diagnose the customer service problem in your organization, considering both the culture and the entire system of the company.
      3. Then, plan interventions. Is the problem with your culture or your system?

Your customers are the lifeline of your business, and a customer for life is the ultimate testament to the success of your organization. Are you creating customers for life… or customers for now?