“It is much easier to keep your existing customers than to find new ones.” If you have been in business for a while, you know how true that phrase is. Your business depends on your customers. And your customers depend on you to come through. Your business cannot afford to lose its customers, at least the good ones. So how do you make sure your customers stay with you year after year? For this month’s eTip, we approached Jim Gardner of Strategy180 to discuss the topic of customer loyalty.
BMC: How long have you been operating Strategy180 and how did you get started?
Strategy180: It is my one year anniversary now, as I started Strategy180 in April of last year. A strong believer in accountability in marketing, I started the company with the goal of assisting companies apply marketing skill sets to positively impact broader organizational goals including those involving change management, training, human resources, product development, and of course, sales.
BMC: How does effective marketing help maintain customer loyalty?
Strategy180: Marketing helps to maintain customer loyalty by engaging customers, regularly reaching out for these customers’ opinions and advice on the product and service, driving brand messages, countering competitive threats and keeping the pulse in the market to be certain that communication efforts (which are only a component of marketing) as well as the organization itself, remain customer-focused.
BMC: How does ineffective marketing kill customer loyalty?
Strategy180: Ineffective marketing is marketing that is internally focused, using one-way communication methods to “sell” existing customers without first seeking to understand their views, opinions, and perceptions of the product, service, company or brand. It is focused on matching or surpassing the claims of the competition, instead of matching or surpassing the real needs of the customer.
BMC: How can a company take advantage of their customer loyalty or their competitors' customer disloyalty?
Strategy180: Customer loyalty is best leveraged by using customers’ opinions to shape the direction not only of marketing and sales efforts, but in creating product and service design, identifying and correcting customer service gaps, and developing experiences that engage them not only as customers, but as part of a community of loyal users. Alternatively, disloyalty to a competitive company can be leveraged most readily by of course, converting the customer. But just as important is that the issues that caused the disloyalty in the first place be understood. They can then be used to shape communications to more of the competitor’s customers who may themselves have similar issues – thereby creating a powerful differentiator for your own organization.
BMC: What are the 3 most common mistakes you’ve seen companies make when it comes to maintaining customer loyalty?
Strategy180: 1) Assuming that what made customers loyal will keep them loyal. Always ask, “What else can we do to make your experience with our company better?”
2) Limiting the marketing to the marketing department. Marketing is everyone’s responsibility, from the front desk to the executive office. Make certain everyone understands their role in creating customers for life.
3) Relying too heavily on gifts, points, and rebates to create the “illusion” of loyalty. The “costs” of creating real customer loyalty should not be quantitatively identified on a spreadsheet. It is something ingrained into the way the company does business, not an annual marketing campaign. Customer loyalty is about what you do, not what you buy.
BMC: Last words of wisdom in regards to customer loyalty
Strategy180: I cannot stress enough the critical importance of your employees in developing customer loyalty. You cannot expect customers to be anymore satisfied with your company than the employees that serve them. Show me a company with dissatisfied employees and high turnover, and I’ll show you a company spending a lot of money to simply retain their current customer base.
Jim Gardner is the principal at Strategy180, a marketing and change management consulting firm (www.strategy180.com). Mr. Gardner is a veteran of many successful public and private companies in a variety of industries. Gardner excels in uncovering opportunities to improve the market position and strength of companies through identifying process improvements in operational and marketing functions with results that are immediate and sustainable. The result of these efforts was the genesis of his BECAUSE RESULTS MATTER™ program. Gardner offices in Dallas, Texas where he guest lectures at two universities. His articles have been published in The Dallas Morning News, Marketing News, CMO Magazine, and CRM Magazine.