Increase Sales Blog

Posts Tagged ‘customer loyalty’

Several years ago I discovered that approximately 2 to 3 out of 4 people were not happy with their financial institutions or banks. This information came during local presentations and keynotes when I asked this question:  With a show of hands, how many of you are happy with your banks?  Then I asked if you are a banker, please lower your hands. After this second question, approximately one third to one fifth of those present actually liked their banks.

One of the driving reasons for these unhappy campers, at least in Northwest Indiana, was consolidation with national and regional banks.  Only a few banks remained locally owned.  Actually one innovative bank was ahead of the flow and branded its bank as “not for sale.”

This informal research now appears to be somewhat validated by Javelin Strategy & Research Group. Banking customer satisfaction rankings fell from 92% in 2004 to 79% in 2010.  Couple this information with the fact that customer satisfaction along with the net promoter score may no longer be the key metrics for measuring customer loyalty,  it appears banks have a challenge looming on the horizon especially with the increased regulations (US). Then add in a global survey by Accenture specific to financial institutions and what you have is a lot of potential new customers for those banks who understand customer loyalty.

The only advantage existing banks have is that changing from one financial institution at least in the U.S. is a time consuming and it is not effortless for their current customers. Those organizations that can make this transition as painless as possible while continuing to do the basics very well should establish a competitive advantage and therefore build customer loyalty. Only time will tell.

Are you in the happy or unhappy camp when it comes to your bank? Share your thoughts and how you believe banks can improve their relationships with their customers.

A customer loyalty study of 75,000 customers  reported in the July 2010 issue of the  Harvard Business Review conducted by the Customer Contact Council revealed that in today’s crazy busy world people (customers) want two (2) things:

1. The basics to be done well
2. Their customer experiences almost effortless.

The findings within this report suggested that companies or organizations who focus on just delighting their customers may not be generating the repeat business they had previously thought.

Let us put this in simple terms. You are driving down the highway, you turn off to refuel your car. There are two  gas stations with fast food restaurants along with all the bells and whistles of these mega travel plazas. One has petrol at .02 cheaper per gallon. So you pull in for the self-service and encounter these simple basics or lack thereof:

• You swipe your card and machine does not work. Now you must walk inside.
• You finish your purchase, press for receipt and do not receive it. Now you must walk inside.
• The pump is very slow and you it take you three time longer to fuel your tank.
• You walk into the bathroom and it is less than desirable.

All of these examples are not providing the basics.  It truly not about delighting because the fuel has an additional additive or all the specials being promoted. Sure it is nice the pavement is clean, but all you want is for the basics to work.

Another interesting fact is the data suggests the Customer Effort Score (CES) is a much better predictor than the Customer Satisfaction Score (CAST) and still better than  Net Promoter Score (NPS). This only makes common sense since people are realizing that time is becoming even more valuable and the easier you can make their shopping experience, the happier they will be.  This must be why so many grocery stores are now asking this one question:  Where you able to find everything?

What this means is if you can begin with the basics of customer service and make the experience as effortless as possible including speaking with your customer service call center, then you will have less negative feedback and truly build repeat business. This may start by conducting your own personal customer loyalty service walk.  Today more than ever before time is money and this is becoming a very real factor respective to building customer loyalty.

All businesses be them for profit or not for profit have overhead.  For single office/home office (SOHO) and independent contractors including realtors, financial advisors, lawyers, accountants (CPAs) this budgetary and financial number is much easier to determine than for the small business owners with employees and the much larger companies where it exists, but no one department wants to own even a part of it because it reduces profits within that department.

A recent post in the COO Bulldog by Kevin Callahan provided a simple explanation as how to calculate and subscribe overhead costs to employees. His last point reaffirms what Gary Sutton talked about in his book Corporate Canaries specific to you cannot outgrow losses.

Operating a business can either be from a short term or long term perspective.  Data from the Small Business Administration suggests many small business owners appear to operate from a short term perspective given by year five, 50% of these organizations are not longer viable.  By not understanding and properly allocating overhead can contribute to this small business failure rate.

One other variable in this mix is this one word – value.  The inherent value within your products and services can help you in your overall pricing structure.

By knowing and being able to clearly articulate this value to your customers should allow you to raise your prices or sell more of your products and services at their existing price levels while building customer loyalty.  Then provided you maintain your overhead costs along with direct costs because you cannot outgrows losses you should be able to increase your profits and not be constrained by your losses. Bottom line is you will then be the Red jacket in both sales and profits.

As always, please feel free to leave your companies or observations about the importance of this business practice.

With so many small businesses in the market place, determine the price of your products or services respective to the value they bring is difficult.  Under price and you may be operating at a loss. Over price and you may not increase sales and herein lies the selling yourself dilemma.

Ford’s recent new pricing strategy of having the hybrid Lincoln MKZ at the same price of the standard MKZ is an interesting approach to bridge this challenge. With hybrid vehicles generally costing more than their non-hybrid counterparts, Ford has taken an innovative approach specific to this luxury sedan.

Pricing if you sell services however is a bit more dicey. A great post at Training Zone actually provides a great explanation behind the decision making process as how to construct your pricing  strategy.  The author also included a doable formula.

One great point by this author, Verity Gough, is if you set your fees to low you may not be viewed as being credible. This is why being able to determine return on investment from past solutions delivered is necessary.

What it appears is that business people must know, understand and then articulate value to their potential customers. Yet, from my observations very few can accomplish this feat.

P.S. Read today’s business column on that critical customer experience and how it develops customer loyalty.

Trend analysis has been around for a very long time.  By tracking trends from weather  such as with the Farmer’s Almanac to the U.S. economic growth to business results, management in those organizations can begin to determine if they are securing the results they are seeking over a specific course of time. This is considered seeing from the 30,000 foot perspective.

For example, Alexa.com is an online trending tool that helps to determine from your traffic relative to other sites and can measure these trends over a period of time.This Internet marketing site can create a firestorm of controversy depending upon what Internet marketing or Search Engine Optimization expert one listens to and more importantly believes.

Site Sell provides a fairly easy and reasonable argument as to the pros and cons of this tool. SEO Pitfall shares another viewpoint, but does agree this tool has some value and is not totally worthless.

Sales statistics from each location to each individual salesperson can also be utilized to identify trends. The data is then analyzed to determine specific trends such as seasonal ones.

In the book, The Ultimate Question, the author uses a specific formula to determine customer loyalty.  Again, this formula can help to pin point specific loyal customers from which data can be extrapolated into a trend analysis.

Unfortunately, many in business  management including small business owners (SBO), entrepreneurs, C-Level executives  and even the single office/home office independent contractors cannot see the trends because they have failed to invest the time to work On their business as Michael Gerber detailed in his book the The E-Myth Revisited.

Trend analysis may require some split testing to determine what the data is really telling you. For example, my education based marketing action plan includes article marketing. During the last 30 days, I refrained from submitting any new articles to , Evan Carmichael and Sales Gravy so that I can better analyze increased traffic to my website compared to the previous 30 days when I submitted almost 70 articles. Now for the next 30 days, I will submit approximately another 70 articles. Then I will review the data to see any trends. Sales Training Coaching Tip: I know from reading the statistics from my Control Panel (CPanel) within my website that a significant amount of visitors come from these three sites.

If you truly wish to be the Red jacket and stay ahead of the flow, you must have a pretty good idea where the flow is going.  Trend analysis is just the tool to help you. Sales Coaching Tip: Excel or a similar spreadsheet program is a great software tool to help you collect and analyze this information.

Customer loyalty happens when the customer experience is memorable in a good way.  For a variety of reasons, far too many organizations deliver a customer experience that is memorable in a very bad way.  Sales Training Coaching Tip: Good resource is the Ultimate Question by Fred Reichhheld.

Yesterday, I had another experience with one firm that I totally regret every giving them any of my hard earned marketing dollars. This was a lifetime membership and their customer service is probably the poorest of any firm I have ever experienced in my 50 plus years. Sales Training Coaching Tip:  Sometimes even those who believe they have done all of their due diligence still can be fooled.

My emails are never answered, they continue to bombard me with new “opportunities” for taking more of my money and their initial claims were false.  So when I am asked directly about this business, I tell everyone to beware and there are probably better ways in which to direct your marketing dollars. Sales Training Coaching Tip:  Dissatisfied customers are any organization’s worst nightmare and will directly affect profitability.

This morning as I am reading the business alerts from BNet.com I happened upon another individual, Michael Hess, who shared his frustration with the customer experience specific to customer feedback. I can totally empathize with his plight given mine of the last several years.

Repeat business happens only when the customer experience is always delightful. Some businesses really get that such as J.C. Penney, Ritz Carlton to Southwest Airlines to even local Mom and Pop shops. There are several locally owned restaurants in Northwest Indiana (Traditions, Tao Chen’s) for example that I make it an effort to stop by each month because the experience is always great. What makes me willing to exchange my hard earned dollars for their products or services is because the customer experience engages as many of my senses (sight, taste, hearing, touch and smell) in a very positive way.

When organizations truly understand that a seamless positive interaction between their patrons and their employees must be always present to ensure repeat business, then their profits will soar.

Top sales performers understand effective selling because they are in their own right demonstrating ethical leadership. Forgetting the whole gender issue (salesman versus saleswoman equals salesperson), there has not been a word to adequately describe this combination of effective selling and ethical leadership.  So this morning I have coined the phrase “Salesmenship E2.0″  The E2.0 stand for the two “Es” of effective and ethical and recognizes the importance of these two words within the 2.o world of social media.

Having clearly articulated positive core values and demonstrating behaviors that reflect those “rules of engagement” is essential in today’s highly competitive global market place. We all know of sales people who are less than forthright and ethical.  For many just mention the word salesperson and the negative response is quite obvious probably due to images of the man selling used cars.

One of my favorite authors, John Maxwell, writes quite a bit about business ethics and leadership. Other noted gurus such as Jeff Gitomer also devote time to this subject of business ethics and leadership respective to sales and selling.

So this begs the question what separates a truly “Salesmenship E2.0″ individual from the rest of the gray suits at the street corner?  Quick answer, his or her behavior based upon immediate observation if possible. Otherwise, listening to others within the community as well as your own intuition. Of course having personal interaction by engaging this person through the purchase of his or her products is another option. However, what I have found is the following:

• First purchase handled with 150% attention
• Second purchase handled with 75% attention
• Third purchase stop bothering me, you get it when you get it

My sense is customer loyalty has far more to do with “Salesmenship E2.0″ than many other factors including the senses of sight, sound, smell, taste and feel. If you truly want to be a top sales performer or what I call be the Red jacket, then invest some time to identify your positive core values, write a values statement and then do those necessary self checks to make sure are as they say “walking your talk.”

This past weekend I did my scheduled bi-monthly visit to my hairdresser. As I was waiting, I observed what actually happened at House of Berggren in Chesterton, IN.

First the phone was always answered by no later than the second ring and most times it was answered on the first ring.  A real person and not a mechanical message said: “House of Berggren, how can I help you?”

When customers walked in, they were greeted with a friendly hello.  All interactions between the employees of this establishment including the owner, Bob, and the customers were authentic and genuine. Clients were asked if they wanted coffee and received hot, fresh brewed coffee prepared to their specifications.

When the phone wasn’t ringing or someone was being attended to, I watched one of the hair stylists picking up and tiding up. What was unusual was she was not asked to do this, but did this as almost as naturally as breathing.

Even though I have been a customer for a while, I tried to imagine how I would feel about my first time experience at this business.  My sense is that I might have only noticed what was important to me such as the hot coffee and well done service. Maybe in future visits, I might have noticed the phone answered quickly, the neatness of the salon and how everyone else is greeted.

Years ago when I worked in corporate, my goal was also to answer the phone on the first ring with a friendly voice because I believed that first interaction was critical to delivering the exceptional customer service experience. So I am very aware of any business that appreciates how to create a positive reaction with those first few spoken words.

In fact, recently I experienced another business who answered the phone in a way that you must truly experience for yourself.  The business is Lovings Cooling and Heating located in Portage, IN. (If you decide to call them, then let them know you were curious because of this article.)

If you want to increase sales,  build customer loyalty and gain word of mouth (WOM), then it truly makes sense to review those few moments when you connect with that person regardless if they are a customer or not.  By taking that action, you will be the Red jacket in a sea of sameness.

Northwest Indiana experienced heavy fog this morning. Visibility was in some areas less than 200 feet.  What is interesting to note is all the drivers who failed to adjust for this hazardous road condition by not just simply turning on their full beam headlights.

How many times do businesses fail to adjust their actions because they:

• Did not fully comprehend the potential looming disaster?
• Believed minor adjustments would work?
• Expected others to take action?

When small business owners to independent sales professionals including realtors, insurance agents to financial advisors ignore the “fogs” of business, they are truly setting themselves up for failure.  And this truly does not need to be the case.

Just by taking some simple actions (course corrections) businesses can get through these “foggy” times. For example, slow down.  Make sure you are on the right road and you have identified as many potential obstacles as possible.

Put your lights on. Now is the time to truly look for what is lurking just beyond the fog. Greater clarity always helps.

You can also just pull over.  Invest the time to stop and assess what you are doing.  Is it the right action for the right time to secure the right result?

When drivers and businesses ignore the fog, they can literally crash and burn. Does it not make more sense to:

• Review to your business growth action plan?
• Revisit existing sales goals?
• Conduct a temperature check (customer loyalty service walk) with both internal and external customers?
• Seek business advice?

The “fogs of business” should not stop your day to day operations, your goal to increase sales and your ability to be the Red jacket in that fog of gray.

Noted business guru Peter Drucker said the function of business is to “attract and maintain customers.” If we peel away the essence of Drucker’s words, it suggests that the customer experience is fundamental foundation to the function of business.  Yet, how many times are customers both external and internal turned off by their experiences?

For example, Southwest Airlines has become a model for customer loyalty. The goal of management  is to immerse new employees into their culture. Sales Training Coaching Tip: The culture is the known and anticipated experiences of all shareholders.

Another blog post at B2B Marketing Insider suggested the 5 tips for improving customer loyalty. The main point is that businesses should consider “cultivating satisfied and engaged employees”. (Source: Michael Brenner)

This is a great point, except I believe it should not be limited to employees, but to all who enter the organization or business. Management should start with the employees as Southwest Airlines has done, but then gone beyond those points of connection (think experiences) to the external buyers of your products and services.

By taking this action, you may gain greater clarity about how the customer experience can determine customer loyalty (think maintain) which will increase sales, dramatically improve profits and decrease operating costs.

Sales Training Coaching Tip: If management or if that means you  do not have a written strategic business growth action plan and a separate sales growth action plan, this is probably the best place to start otherwise you may be engaged in Captain Wing It behaviors.