Customer Loyalty and Missed Chances

This story was originally published on March 3, 2011, and is brought to you today as part of our Best of ECT News series.

One of the goals often cited for implementing CRM is an improvement in customer loyalty. That sounds like a logical objective, and knowing more about your customers and the history of your interactions with them certainly helps you understand how to keep them coming back.

Still, there’s a long way from the starting point to the ending point in the life cycle of a loyal customer, and there are a lot of pitfalls. In short, a lot of efforts that cite customer loyalty as a goal never result in actions that ever impact the customer — they end up as internal activities that collect data, collate and analyze it, and then result in no actionable insights — or worse, insights upon which no action is taken.

This activity may result in improvements to processes, but if your goal was customer loyalty, those internal improvements are not enough.

The Road to Loyalty

I’ve never been a big fan of flow charts, but I think that if your objective is long-term loyalty, it’s probably a good idea to chart the things you do to foster loyalty and to try to anticipate the factors you don’t control that can impact loyalty from the customer’s side.

In other words, try to draw a line that follows the path from customer acquisition to customer loyalty (or a failure to establish loyalty). If you do that, you’ll probably discover that there are lots of paths on your flow chart that come to dead ends — or at least head in unpredictable directions.

For instance, marketing automation is an obvious help in acquisition and drip marketing, but are you using the technology to continue to communicate with existing customers? Loyalty is not developed through monetary transactions; it’s developed through the ongoing experience with the company.

Email is good not only to continue marketing efforts with the goal of upselling customers, but also to suggest ways to better use the products and services they may have already purchased. Adding value outside of an obvious sales effort is a great way to demonstrate your commitment to the customer and thus foster loyalty.

How do you know which customers to reach out to in this way, or what content you should provide them? Use your CRM and marketing data to find out.

Listen, Then Learn

Another often-overlooked way to improve loyalty, as well as your products and processes, is to pay attention to customer feedback. In 2008, Gartner found that a depressingly low 10 percent of companies said they used the insight they collected from surveys.

If a business has no process to make use of survey data, it’s pretty likely it also will have no mechanism for using direct input from customers, like emails or responses to the social media channels the company uses. This is an enormous waste of an opportunity to listen and react to customers.

If a customer suggests a way for you to improve your products or services that you can implement, it’s free consulting. Beyond that, it’s a loyalty-building opportunity. The customer with the suggestion should be thanked, building one-to-one loyalty. You should also make the news of the suggestion known to your other customers and give credit where it’s due.

While you’re at it, emphasize how enthusiastically you receive such suggestions — thus helping customers understand how their experience and input is valued. Making an impact on a business is great for loyalty, but so is just having the feeling that you can have an impact.

Building Employee Loyalty

There’s one aspect of loyalty-building that probably won’t show up on your flow chart, but which could be considered the border or the foundation for the whole thing. That’s the attitude of your employees.

Whether you sell B2B or B2C, it’s essential that everyone in your organization understand the critical value of loyal customers, the importance of the customer experience to loyalty, and their key role in creating the customer experience.

If any one employee fails as a loyalty-builder, it will cancel out all the other loyalty efforts you’ve invested in. This is an idea that you need to sell to each of your employees and keep reinforcing. You can use many of the same ideas you employ to keep customers loyal to your business to keep your employees loyal to the idea that they build loyalty.