Posts Tagged ‘loyal customers’

Time to Take HOLD of Your Business Results

To improve business results, many organizations use the SWOT analysis.  For many years I have used a revised SLOT analysis when it comes to ensuring people secure the desired results.

Today, the word disruption is very much in evidence through the business and even personal worlds. The combination of algorithms and technology continue to disrupt how business has been conducted.  Maybe it is time to move forward and look at business results through a different analysis tool.

HOLD – A New Analysis Tool

When people within organizations start engaging in improving business results, the ultimate goal is to take HOLD of the entire organization.  Individuals within the organization must also take HOLD of their own results.

H Health – What is the health of the organization or individual?  This allows the organization as well as the individual to assess beyond the financial records to other critical elements especially attitudes, emotional intelligence and organizational culture. More and more research confirms emotional intelligence and organizational culture have far greater influence than many executives realize.

OOpportunities – Where are the current and future opportunities for sustainable, profitable growth?  With the qualified labor pool continuing to shrink, now is the time to look at opportunities to keep loyal employees and loyal customers.

LLimitations – What limitations are restricting the health and opportunities of the organization or the individual?

D Disruption –  What disruption has happened in the marketplace and its impact on the organization or individual?  Where is there a possibility for more disruption such as artificial intelligence?

Yes the SWOT analysis is a good tool.  The inherent problem is people are conditioned to the tool and in many instances viable data, facts and information are overlooked.

Change in the marketplace continues to happen at what appears to be the speed of light. To stay at least with the flow and hopefully ahead of the flow demands new ways of thinking for those who wish to change and improve their business results.

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A Loyal Customer Is Your Revenue Generator

Many small to mid size businesses cannot answer this question:  What is the total value of each loyal customer? For these SMB owners are so busy working on yesterday’s issues and today’s issues, they fail to invest the time on tomorrow’s opportunities.

To calculate this very important number begins by understanding your average revenue per order and knowing the total number of orders per year per customer.  By multiplying these two numbers creates your total revenue opportunities per year for your average customer.

Next take your total revenue opportunities multiplied by the average tenure of your customer and you now have your total value of a loyal customer.

For example, you are a small, locally owned restaurant and the average breakfast meal is $6.00 and your customers visit you 2 times a week or 104 times a year for annual total revenue opportunity of $624.  Your average tenure or lifetime for your customer is 10 years.  Total value of that customer is $6,240.

When that customer stops coming, you have not lost $12 a week, but $6,240.  This is why building loyal customers is so critical to your bottom line.

Here is another real world example. My husband and I go out for dinner usually once a week.  Twice a month we frequented a locally owned restaurant that consistently delivered good food. During one of our visits, my husband visited the men’s facility and observed a cook not washing his hands. Upon returning to the table, he quietly shared with me the incident and we left.

On our way out, my husband took the manager outside and politely explained what had happened.  Even though the manager did try to resolve the problem, we both know that individuals who fail to wash their hands will not change their behaviors.  Impact to that restaurant was easily $25,000 over the course of 10 years because usually once a month another couple joined us.

TAKE ACTION to make sure that everyone from the executive team to the frontline workers understand all points of connection. Demonstrate the financial impact when just one loyal customer is lost because a simple point of connection such as the staff not washing their hands was not maximized.

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How Do You Develop Customer Loyalty?

To develop customer loyalty means that you must know what to do and probably change your paradigms.  Loyal customers have different expectations than just satisfied ones.

Customer Loyalty Coaching Tip:  The digital disruption will impact your paradigms about loyal customers.

To learn your customers’ expectations begins with the management team.  Senior management needs to identify the points of connection within the customers’ experiences. Points of connection are anything that customers can see, feel, smell, taste or hear. Literally walking through the organization is a very simple way to locate the many points of connection.

Also, management needs to determine what a loyal customer is worth over the average customer lifetime.  For example, a satisfied customer visits a local retailer four times a year and spends an average of $50. This customer is worth $200.  A loyal customer visits the same store, spends $50 weekly and her value climbs to $2,600 annually.

Now consider those customers shop the same store in the same manner for 10 years. The satisfied customer has a total customer value of $2,000 while the loyal customer is worth $26,000.  This calculation quickly demonstrates how just a 5% retention in customers can create a 25 to 100% increase in profitability.

Some retail stores such as automotive to industries such as lodging have extensive data about their customers and understand the overall value every potential customer brings to their establishment.

Then a customer service survey can be created to reflect these points of connections as well as other issues such as unresolved problems.  When this information is compiled, then a customer loyalty strategic plan can be developed to ensure that all actions are aligned to the goal of developing loyal customers.

Of course, employees also need to be trained and developed to embrace a customer loyalty philosophy while shedding the old one of customer satisfaction. This customer service training should have them also identify points of connection and understand the critical goal of problem resolution.

TAKE ACTION to make every customer experience is the best.  Begin with a organizational assessment that is aligned to a continuous improvement process. Then take time to identify the critical points of connection.

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Customer Loyalty So You Have It?

The 20th century business model focus was labor intensive. Creating satisfied customers was the goal.  However, the 21st century has changed the marketplace forever.

With the click of a mouse thanks to the dramatic impact of ever changing technology, your satisfied customer can leave and become easily satisfied by your competitor. What will you do then?  Continue the same practices, policies, and procedures through archaic customer service training?

Customer loyalty is truly about your bottom line.  Did you know that a 5% increase in customer retention can have a 25% to 100% in profits?

Take a moment to think about the impact of this figure to your bottom line. You already have satisfied customers.  By converting them, you save money by not acquiring new customers which is far more costly.

But the real power is that these loyal customers become your greatest marketers. They are singing your praises to everyone through Word of Mouth (WOM) advertising. And everyone in business knows that you cannot pay for a referral.

So what is keeping you from building loyal customers?  In many cases it may be your policies, procedures and customer service training.

For example, some organizations focus on timing the interactions between associates and customers.  Speed becomes the driver of the customer experience.  The customer cannot complain that the transaction took too long, but they will complain about being treated like a number, like an empty bag, like less than a human being. Have you ever had that experience?

Smarter salespeople are coming to realize that unresolved problems are keeping them from loyal customers.  If a customer has a problem and that problem is resolved to the satisfaction of the customer, repeat sales happens.  In other words, resolved problems create loyal customers who want to come back and spend or invest their dollars with you.

TAKE ACTION to think about your customers.  What can you do to build loyal customers?  If you do not have a customer loyalty strategic action plan, then construct one is where to begin.

And remember, the digital disruption will impact your customer loyalty strategies.

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Have You Considered Your Sales Solutions to Have These Two Qualities?

Sales solutions that are both efficient and effective have a far greater probability of turning customers into loyal customers or continued sources of sales referrals.  What happens is in the hurry to “close the sale,” some salespeople focus on the efficient and not the effective.

Efficient Sales Solutions

When the sales solution meets all the criteria as in investment, delivery, etc., it suggests it was efficient.  Things were done right.  The right answers were given to the right questions.

Effective Sales Solutions

To be an effective sales solution means doing the right thing.  Possibly the salesperson knows even though his or her solution is efficient, it may not be effective.  For example, sales training during the holidays usually lacks short and long term cognitive retention.  People have their minds elsewhere.

Another no effective example might be given 2 – 8 hour days of training knowing full well the “brain only absorbs what the butt will endure.”  Such a schedule may be efficient and yet it is not effective.  A better sales training solution would be 2 hours a week over 8 weeks.  Sometimes there is push back on this scheduling, yet a good salesperson can demonstrate how such a sales solution can deliver far better results.

Losing the Sale

Many salespeople are not willing to lose the sale for a variety of reasons. Several times in the past I have been asked to deliver one or two day sales leadership training.  Given the behavioral outcomes the clients wanted, I had to turn down the sales because I knew the attendees would not change their behaviors. The clients were convinced this type of sales leadership training could be achieved.  I suggested to the clients to reconnect with their past vendors because given my knowledge and experience I could not secure those desired behavioral changes.

Sales solutions that are both efficient and effective may take a little longer to earn or close, but the results are far more sustainable from loyal customers to more sales referrals.

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Tone Deaf Executive Leadership Ignores What Customers Value

Once again corporate executive leadership demonstrates how truly tone deaf it really is.  The recent Tweet war between Delta Airlines and Ann Coulter reveals that Delta leadership does not know what their customers value.  Hint for those in leadership roles – It is not the money.

When customer pay for something, they expect what they pay for.  Pretty simple.  In the case of Ms. Coulter she expected to receive additional leg room given she pre-booked and paid for a seat to give her that extra comfort.  Given her financial status, I am sure she would have paid more, but $30 was the going rate.

Tone Deaf Executive Leadership Thinks Only About the Money

Someone in an executive leadership role who offered her the $30 as a refund and then went on to defend the removal of her from her paid and pre-booked seat was beyond tone deaf.  I do not know the reason for her removal outside of the presumed fact she was not creating a problems with her fellow passengers.

Today, social media sites such as Twitter allow individual customers to have the power of the ink without any cost.  Possibly they have forgotten this quote attributed to Mark Twain as well as to Former Congressman Charles Brownson, Indianapolis Republican:

“I never quarrel with a man who buys ink by the barrel.”

When executive leadership or even management believes customer service is all about the dollars and they forget customer loyalty is about how they treat people. To say Delta’s customer service was horrendous is an understatement. 

Being tone deaf now has disrupted customer loyalty. Loyal customers may think twice about the obvious disconnect between what they value and what Delta believes they value.

Sales and Leadership Coaching Tip:

Value is unique to each buyer (customer).

The tone deafness demonstrated by Delta Airlines executive leadership also reveals the total lack of emotional intelligence.  These leaders failed to recognize and understand a paid customer’s emotions, but only recognized their own emotions.  This is why they failed to manage both.

Want to know how your own emotional intelligence?  Schedule a short free call with Leanne by CLICKING HERE.

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Customers Leave People Not Businesses

You work hard to build your SMB.  You make the extra effort to show appreciation to your loyal customers.  And then poof, one of your people, with some poor emotional intelligence destroys what you worked so hard to achieve.

customers-emotional-intelligence

A True Customer Loyalty Story

An entrepreneur recently shared his customer experience about how one restaurant manager destroyed his customer loyalty. He then put that destruction into hard cold cash. This friend had a 40 year plus relationship with this particular upper end restaurant.  He was by all accounts a valued, loyal customer.

In the last eight months, he had given this SMB over $10,500 and he determined yearly expenditures were around $18,000.  Additionally he had booked his annual Christmas party for the another $7,000.  His annual sales at this particular establishment amounted to $25,000.  Even for established restaurants, losing $25,000 in annual sales is a significant hit to the bottom line.

The manager lacked the emotional intelligence to effectively manage his wait staff.  He also failed to recognize the importance of maintaining loyal customers.

Now this entrepreneur will take his business luncheons, business dinners and casual dinning experiences elsewhere.  He will no longer recommend this particular restaurant as he had done hundreds of time in the past. So the $25,000 annual sales from this one loyal customer could easily be doubled or tripled.

SMB owners so often fail to recognize the importance of their managers to effectively manage their people while ensuring loyal patrons stay loyal and employees are treated with respect.  In today’s world, we identify this ability as emotional intelligence.  To mistreat a loyal customer with decades of patronage is unforgivable especially if during all those years there was never an issue with the customer.

There is an old adage about employees leaving managers not businesses. This wisdom should also be applied to customers as well.  People make or break any business from the smallest to the largest.  As a SMB owner the question should be:

Can you afford to lose customers and their referrals because your people are unprepared to handle customer situations?

Schedule a time to speak with Leanne Hoagland-Smith (CLICK HERE) and learn how to build emotional intelligence into your employees.

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Lies Do Not Inspire Customer Loyalty

When will customer service people from wait staff to store clerks to everyone else in between realize lies do not inspire customer service loyalty. No lies do exactly the opposite. Lies build distrust and turn existing loyal customers into finding other solution providers.

customer-loyaltyRecently we had breakfast at a national chain that features home cooking.  When the waitress took my order, I asked for extra syrup. The waitress replied “Absolutely.”  Another waitress brought our breakfast and again I had to ask for extra syrups. This waitress replied “No problem.”

Our waitress stopped by when I was halfway through my meal and I mentioned the extra syrup. She replied “Of course.” Finally when I was finished with my breakfast, she brought the extra syrup.

Then told my husband and myself the reason for the delay was she was attending a mandatory staff meeting.  She apologized when I told her to forget the syrup as I was finished with my meal.  Again, she apologized and mentioned the mandatory meeting a second time. As a sales and management consultant, my first thought was “Talk about stupid management having a meeting during a prime time” and my second thought was “Hmm I wonder if the waitress lied to cover her own bad customer service?”

At checkout I was asked “How was the food?”  I replied the food was great, but the customer service not so much so.  The clerk asked me what happened and I responded.

She then asked me to tell the manager directly which I did.  The manager was nice enough not to charge us for the pancakes and said the meeting was not a mandatory staff meeting.  In other words, the waitress lied.  Requesting an item 3 times is not the fault of management, but the fault of the wait staff. And yes there was plenty of wait staff as this was the usual busy Saturday morning

Customer loyalty especially for service industries such as restaurants, grocery stores, etc. where there is low profit margin is essential in today’s highly competitive B2C marketplace. Losing one customer can equate to hundreds if not thousands of dollars over the lifetime of the customer.

Very few people will fess up and acknowledge when they are at fault. This is human nature. Yet to lie to customer is not the answer for ongoing customer loyalty that is built upon expectations based upon past customer experiences.

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Always Remember Customer Service Is SALES!

How many times do those in B2B or even B2C industries fail to understand customer service is sales.  A new report just released by Astound Commerce through secret shoppers recognized seven retailers who excel in customer service through:

customer service

  • Must have website
  • Visibility
  • Overall customer service
  • Speed of delivery
  • Efficiency of checkout

One of the top seven performers was The Home Depot. I know from personal experience this firm understands how serving the customers within the store will increase sales.  Here in Valparaiso IN, the store has hired certified and licensed electricians, plumbers and carpenters to assist customers with their questions. Even though my husband is an engineer, he has been advised by these professional tradesmen of better ways to do home improvement as well as some of the new products.

For example, toilets for years had a wax ring that attached to the bottom of the toilet and closet flange.  Over time the wax dries out and cracks.  Several years ago through the plumber at Home Depot, my husband learned of a neoprene boot that is attached to the bottom of the toilet and then fits past the closet flange.  The end result is a far better seal and one that does not not replacement.  The cost of a wax ring under $5.00 versus the cost of the neoprene boot around $15.00.  Husband spent $30 instead of $10 has he replaced not just one wax ring, but two.

Today I read Home Depot’s quarterly earning were ahead of expectations. Much of this was due to improved housing market and I also believe much was due to increase sales by loyal customers.

All SMBs have a 7-step-sales-process-advsys Within these 7 steps are third phases:

  • Marketing
  • Selling
  • Keeping

The third and final phase of keeping is one where both salespeople and customer service people work to keep those loyal customers.

Yes customer service is sales and if as a SMB owner or sales professional you forget this simple fact, you may be exposing yourself decreasing sales, declining profits and increasing stress.

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Buying Mistrust Is the Intersection of Expectations and Inconsistencies

Yesterday, I personally experienced how just one word creates buying distrust.  I also experienced how a seller recognized and overcame that buying distrust. Let me quickly explain.

buying distrust

Credit www.pixabay.com

Buying Mistrust a Short Story

Two weeks ago I made an appointment at my health care clinic. The intake person said I would be seeing Mindy. I asked who was Mindy and the person responded “She’s the doctor.” My doctor had relocated out of state and was no longer at this clinic.

Yesterday was the appointment. In completing the paperwork, a question was raised about my preferred pharmacy. I told the intake person that I preferred a written prescription so that I can check prices online. She said “you can talk to the doctor about that.”

When Mindy came into the room, she introduced herself as a nurse practitioner.  This caused immediate distrust because my expectation was to see a doctor. I had been told twice I would be seen by a doctor.

I voiced this concern. Mindy recognized I experiencing distrust and gave me the choice to see a
medical doctor or to just continue.  She demonstrated excellent emotional intelligence and I decided to continue with her.

Even after 40 plus years of dealing with customers and being in sales, I once again realized how quickly buying trust can be placed by buying distrust even with loyal customers.  Trust be it in business or one’s personal life can never be taken for granted.

In working with clients, I continually stress the importance of consistency in all aspects especially in behaviors.  Here just one word, doctor, spoken twice to a loyal customer planted the seeds of distrust.

As a side note,  my husband had visited the same clinic. On his visits he has been told he would be seen by the nurse practitioner.  My experience confirmed this organization has an inconsistency in communication behaviors.

Just imagine each day how many customers or patients experience this collision of expectations and inconsistencies?  Who would really appreciate how this collision has the potential to be caused by just one word?

Trust even with loyal customers can never be taken for granted.  Every interaction must continue to build trust.  To fail to ingrain this principle into the organization’s culture or what I believe is truly the sales culture can be the organization’s Achilles’ heel.

 

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