- For every customer complaint, there are 26 other customers who have remained silent. 9 out of 10 unsatisfied customers would not willingly do business with your organization again.
~ Source: Lee Resource Inc.
- 19 out of 20 satisfied customers who get their issue resolved will return and tell on average 5 people about their experience.
~ Source: White House Office of Consumer Affairs, Washington, DC
Whether you are a CEO, an Account Exec, or an independent consultant and whether your business is pizza, financial services, earthmovers, or volunteer services, you want to avoid the first two above. On the positive side, you hope your business falls into the category of the third bullet where you can grow & improve your customer loyalty.
What these three key business stats have in common is that they measure customer behavior, specifically the behavior of returning – whether it is to buy again or just give you feedback. Returning customers are loyal customers, people who have an emotional and relational investment in you because of how they have been treated, whether they are individual buyers or they represent their companies.
Think of your customer.
- Do you serve an “external” customer, one who purchases your company’s products and services? Then, you might be in Sales, Account Management, Customer Service, or Field Service.
- Or do you serve an “internal” customer, one who (by choice or not) receives your work product or service. In this scenario, you might never interact with an external customer, but you still have an impact on the eventual result.
- You might be in HR, Talent Acquisition, IT, Engineering, Logistics, Office Management or a similar internal function.
What Is Customer Loyalty and Why Is It So Important?
- Whoever your customers are, are they delighted with you?
- Are they so thrilled with your products and services, that they will do business with you when your prices are a little higher than the competition?
- Will they forgive you one or two small mistakes and still return?
- Have your customers become your best “sales” people because they rave about their experiences with your businesses?
- Will internal customers always come back to you or will they outsource your service?
- And if they cannot outsource, do they rate your services as a loyal, returning customer would?
Loyal internal customers will help you improve because they are relational and maybe fiscally invested in you and your operation. All business organizations hope their customers keep coming back, and loyal customers are the best foundation for a sustainable future. As a culture of customer loyalty takes hold throughout your organization:
- Engagement improves,
- Innovation flourishes,
- Teamwork grows,
- And, everyone becomes focused on how his or her results affect the eventual loyal customer.
Adopting customer loyalty as a management, company-wide objective to be continuously improved is critical to the success of business in our socially networked and increasingly competitive service environment.
Points of Connection
Your external or internal customers’ points of connection most directly impact customer loyalty. A point of connection is any interaction a customer has with one of your employees or one of your business processes. Points of connection define the customer loyalty from the inside out and determine how a customer rates the service received and ultimately how the business is referred or criticized. As the graphic explains, these 6 points of connection are applicable and important for serving both external and internal customers. Imagine for a minute you crafted a scorecard, which could be used by your team to measure customer loyalty in terms of these 6 criteria (you could customize as appropriate). On a performance scale of 1 (worst) to 5 (best), your customer can paint a picture of how he/she feels about doing business with you:
- How are we at listening to you, discovering your plans, uncovering your needs, and staying current about your business?
- Do you feel like you and your needs are important to me and my department or company?
- If there are differences of opinion or misunderstandings, do we address them professionally, openly, and without delay?
- Do you feel confident that we are being 100% honest and truthful about our proposals and solutions?
- Do we do what we say we are going to do?
- Do you feel everyone you deal with on our team is being authentic?
Evaluating these points of connection, and the opinions your customer expresses about them, are valid for both external and internal customers. But how many businesses evaluate the customer loyalty awareness and contributions of their internal departments?
From the Inside Out – Relational Sustainability
The business strategy of “sustainability” has been part of C-Level vocabulary for many years and it can mean different things to a CEO and his/her executive team depending on the business they are in. Manufacturing companies need to be mindful of environmental waste regulations.
Companies in service industries such as insurance and finance focus on energy consumption of their buildings and the recycling efforts of their paper. Businesses of all types and size have Corporate Social Responsibility initiatives.
But how many of them have Relational Sustainability initiatives to ensure their key relationships remain strong and are long-lasting? There may not be an official worldwide watchdog agency tracking your company’s carbon foot print and its relational sustainability in the same report, but any business which depends on loyal customers to sustain its growth, and strives to have engaged employees which treat each other as internal customers, will want to sustain its focus on the “five relational building blocks to amazing customer results” as shown below.
Consider a Customer Loyalty Relational Sustainability Workshop
This is designed to raise the level of customer loyalty focus and skills across all parts of your business:
- Consists of 5 weekly workshop sessions, 4 hours each.
- Is practical, interactive, and customized for your business.
- Builds a world-class customer loyalty culture by improving internal relationships using the Points of Connection.
- Focuses on 5 key building blocks, you, your customer(s), your relationship with your customer(s), how to best use your team to support your customer(s), and being goal and results-oriented.
- Delivers to each attendee a detailed, individualized Customer Relationship Business Plan.
Customer Loyalty Summary
- Returning customers are loyal customers and customer loyalty has replaced customer satisfaction as a more important key performance indicator because loyalty helps a business survive market challenges that mere satisfaction cannot do.
- Not only do employees who serve external customers need to understand customer loyalty strategies; employees working in internal and support functions can make significant contributions to the company culture of customer loyalty.
- An executive commitment to a company strategy of customer loyalty will improve employee engagement, innovation, and buy-in that the business is serious about investing in a sustainable future.
- A company’s or department’s customer loyalty can be measured by its Points of Connection performance.
- Training internal employees in the skills that improve customer relationships will improve performance in the Points of Connection. This is what is meant by improving customer loyalty from the inside out.