Customer Loyalty Strategies That Work

It would seem obvious that it is easier and less costly to retain existing customers than to solicit new ones. Sure, you want and need to keep new customers coming in, but it is the loyal return customer that makes up the base which makes a business truly successful. Somehow, the message has evaded a lot of otherwise well-run businesses, who seem to value their customers' purchases, but not the customers themselves. A business that adopted such an attitude might have been capable of surviving in the distant past, when merely crossing a county line would enable the business to build itself a wholly new reputation.

A hundred years ago, either the buying public was more naïve than today, or many of the merchants were less forthcoming. Products were foisted upon customers that lacked the ability to perform even a fraction of their claimed results. Cheap whisky was rebottled and labeled as a miracle cure for anything and everything that ailed you. When customers eventually discovered that they had been duped, they had no recourse, since the "snake oil" salesman was long gone, peddling his unfulfilled promises in another town, and smart enough never to hit the same place twice.

On the other hand, there were merchants who took great pride in their products, represented them honestly, and as a result, ran businesses that are not only still alive and thriving today, but are household words throughout the country and the rest of the world. Sam Colt, John Browning, Henry Ford, Eli Whitney, Paul Revere... all names associated with ingenuity and quality, carried on by businesses that knew what it meant to value their customers.

Valuing customers: What a novel concept (some would say a quaint concept, albeit saying so out of earshot of said customers). If your customers feel appreciated by - even important to - your business, they will go out of their way to patronize your business again and again, even if they can get their desired products and/or services a little cheaper (or a lot cheaper) somewhere else. The smart business owner knows that making a customer feel important needs to be part of not only the company's marketing efforts, but must also be at the very core of the business' practices. If the day-to-day operation takes the customer for granted, no amount of advertising is going to shake the customer's gut-level feeling that they're only as important as their latest purchase. So how does a business go about convincing customers that they are important? There are numerous ways, and they can cost far less than you'd think.

If you've watched television commercials for virtually any upscale goods, you'll notice that they all attempt to convince the viewer that there is some moral imperative or social status attached to their products. We've all seen the ads: "If you truly love your family, you won't allow them to ride in an automobile that doesn't protect them as well as.... If you want that special someone to admire you, you'd never be caught dead wearing anything but.... And if your children's health and well-being means anything at all to you, you'll only feed them ... for breakfast."

These are all examples of successful ad campaigns, but the truth is that without the substance to back up the claims, the campaigns will ultimately be exposed as scams. And in the Internet age, word gets around too quickly, and every disappointed customer can become his or her own ad agency with a global audience. The car really does have to be safer, the clothes really do have to exhibit the style and quality, and the cereal has to provide something besides pretty colors and sugar coating.

Beyond stroking your customer's ego and ensuring that your product or service delivers as promised, your response to post-sale circumstances will go a long way toward defining your company in your customers' eyes. Every business person knows that it is inevitable that some customers are less than satisfied. Whether a product fails to perform as expected, is defective, or simply isn't what the purchaser really wanted, you are going to get some complaints and even returns. Your actions in response to complaints more clearly defines your business than does any advertising or public relations campaign.

Consider the approach taken by one company that manufactures commercial heaters. They will remain nameless, primarily because they haven't paid for the great advertising this article would give them. When advised that one of their products doesn't perform as expected, the company immediately ships out a replacement, no questions asked. Furthermore, unless it is a big ticket item, the company tells the unhappy customer to just keep the original or dispose of it as they see fit. For a relatively small price, the company not only convinces the customer that his or her satisfaction is important, but that they trust the customer's integrity, as well. Could the company get away with insisting upon proof of the customer's complaints before taking remedial action? Certainly they could, but by deciding to act preemptively, they manage to turn a dissatisfied customer into a loyal repeat customer.

Or how about the way a rapidly expanding mom & pop salsa maker in Texas handles queries and complaints. If they receive a complaint (or a compliment) about one of their products, they routinely send the correspondent a sampler gift package containing an assortment of their different condiments. The gifts, which actually cost them very little, serve to broaden the customer's experience of their products, as well as making the customer feel well-served. Other companies send coupons good for free products, and the result is nearly the same (though the visceral appreciation for actually receiving a package should not be discounted).

In summary, while most companies have a good handle on using advertising to market their goods and services, the most successful companies have realized that their most effective marketing efforts actually occur after the sale, rather than before, and that customer loyalty is essential to the continued success of their operation. These companies perform acts that appear truly magnanimous to their customers, but actually represent a minuscule investment by the company, and one that pays significant dividends in customer loyalty, word-of-mouth advertising, and even improved employee morale. After all, a customer service employee genuinely appreciates a customer's "thank you," and is likely to be even more friendly to the next person to pass along their comments. Who knows? That employee might even pass the "attaboy" along to others in the company, and we all know how infectious a happy employee can be.

THIS IS NOT INVESTMENT, TAX OR LEGAL ADVICE. Consult with a financial advisor, accountant or attorney before making important decisions in these areas.

THIS IS NOT INVESTMENT, TAX OR LEGAL ADVICE. Consult with a financial advisor, accountant or attorney before making important decisions in these areas.