Many businesses today are grappling with a complex web of challenges, including economic uncertainty, escalating costs, a competitive market, and changing customer expectations. There is also the ongoing issue of attracting and retaining business.
Keeping customers satisfied is crucial for business success. If your company has a loyal customer base, then it is in a very fortunate position. Customer loyalty is a powerful force that can significantly influence the profitability of a business, driving customer retention rates, boosting sales, and giving a distinct and competitive edge to your organisation.
Dr John Young, a US based international authority on leadership development and organisational health, says if companies want loyal customers, then they need to foster loyalty in their employees.
“It is prudent, if not imperative, to retain those employees who interact well with your customers. These may be salespeople, technical support professionals, or customer service people. Avoid just hiring or deploying the next available person to interact with your customers.
“We notice that exemplary performers manage roadblocks more effectively. They bend the rules and pay attention to the little things. The best of them are focused on doing the right thing for the customer and the business. They will make decisions, take appropriate risks, and take action. They have good self-esteem, are confident, and solve problems. Also, top performers think about past success while poor performers think about their failures.”
Knowing your customers, understanding their needs, and nurturing your relationship with them is the key to success, he believes.
“‘Lack of loyalty,’ wrote author Napoleon Hill, who was the pioneer in identifying the power of personal beliefs and their role in personal success,’ is one of the major causes of failure in every walk of life’. As with our other relationships, we typically put a lot of effort into getting our relationships with customers started but tend not to nurture them and take them to extraordinary heights.”
Dr Young, who lives in Charlotte in North Carolina and enjoys spending time with his wife, Mary Pat, and family at his second home in Galway city, recommends asking yourself the following questions to get a good overview of your customer relationships. “Do you truly know your clients and do they know you? Do they feel your respect? Do they feel listened to? Do you engage them in problem-solving conversations that yield mutually beneficial solutions? How well do your daily actions demonstrate your commitment to your customers’ happiness?”
Polite treatment
Customers’ experiences are often far from satisfactory. Too often mature companies neglect the very thing that make them successful, he believes. “Customers put a high value on polite treatment well ahead of investment performance and accuracy. [US] Research reveals that 70 per cent of customers leave a [business] relationship because of rude or indifferent behaviour by an employee. Interestingly, only 20 per cent leave because of price or product quality. We want people to listen to us and to care about our concerns.”
Understanding why customers choose not to do business with you anymore is important, he says. “They do so because they can and because they are unhappy. Do you survey to ascertain a customer’s likelihood of continuing to buy your product or service or to truly understand why they are unhappy with your product, service, or staff? “
He recommends viewing customers’ complaints as “a gift to your business”. Most people do not bother to complain, he says, they just drift away, so finding out why they are dissatisfied with your product or service is beneficial.
“The main vehicles customers have to communicate their dissatisfaction with your company are complaints – if they bother to tell you! A complaint is any measure of dissatisfaction with your product or service, even if it is unfair, untrue, or painful to hear. Typically complaints are about service, content, delivery or quality, personnel, response time, billing, or follow-up.”
Dr Young, a former university lecturer who founded the McLaughlin Young Group, which specialises in addressing issues which affect employee health and productivity, says management often only find out about customer dissatisfaction when customers tell them or walk away. “The typical company response tends to be reactionary or firefighting that only further confirms the sense of abandonment the customer was feeling.”
He believes companies should be thankful when they receive negative feedback. He likens complaints to “preventive medicine”. “They are the advanced warning that portends a problem in the relationship with your customer. Financial statements, in contrast, are historical data and of little relevance in understanding loyalty issues.”
When handling complaints, do not be defensive, he advises, and aim to use the interaction to build your business. “The first emotion the customer is experiencing is lack of respect. As they further progress their dissatisfaction, they may analyse it in terms of a lack of listening or poor communication, but the underlying risk factor that you need to acknowledge is their perceived lack of respect. Remember that you cannot tell someone how to feel. If you try, you will dig an even deeper hole for yourself.”
He says complaints often stem from customers not feeling understood or being treated like a number. “At times like this, the customer does not need to hear: ‘It is our policy’. When those words are spoken, the customer hears employee disempowerment, laziness, apathy, or indifference. Instead, the employee should respond with empathy. Emotions can run high when people’s respect has been violated. Assume that the customer has the right to be angry or may even feel betrayed. Diffuse the emotion by remaining calm and admitting your mistake. Customers want to feel validated in their frustration. Do not take the customer’s emotion personally. Be polite, no matter what. Say “please” and “thank-you”, remember that you represent the company. Restate the customer’s frustration and treat them like a real person. Resolve the issue quickly and in the best interest of the customer.”
Minor concession
A gesture of goodwill or a peace offering may help repair a fractured customer relationship and build bridges, he says. “This can take the form of a minor concession, for example, restaurants often offer a complimentary dessert to the customer who feels disrespected.”
Consistency both in your approach and interaction with customers is key, according to the Antrim man who was Ireland’s first Honorary Consul for the state of North Carolina. He recommends being honest and professional. “Your customers must feel that they can grow to depend on you. Loyal clients are the ones who believe they are receiving more compelling value doing business with you as opposed to your competition and they wouldn’t think of working with anyone else.”
He says customer satisfaction is basically a psychological state. “Thomas O Jones and W Earl Sasser [both of Harvard Business School] studied 30 US companies representing five different market sectors. They found that customer satisfaction had virtually no bearing on whether a customer returned to buy from a company again unless they were ‘totally satisfied’ compared to ‘merely satisfied’. Xerox Corporation found that customers were six times as likely to repurchase when they were “totally satisfied” compared to “merely satisfied”. If a customer’s experience is less than outstanding, it has essentially failed.”
The importance of “experiences” cannot be overstated. “The way in which companies viewed customer loyalty took a significant leap in the late 1990s with the publication of “The Experience Economy” by B Joseph Pine and James H Gilmore. Their work transformed customer service and loyalty by asserting the importance of creating a vivid, memorable customer experience. The authors argued that companies could charge more for experiences than they could for goods or services. Customers, they stated, would willingly pay a premium for experiences that were distinctive, excellent, and memorable. ‘Memory’ itself was seen as the product – the experience.”
The authors of the publication cited Starbucks as an example of the “experience concept” because it sells a “one-of-a-kind” experience, he says. They predicted that experiences would eventually become the new norm and, in fact, commoditized.
“The final economic offering, they speculated, would be the creation of transformative events. We see examples of these in health spas and high-end grocery stores. When companies provide the ultimate transformative experience, they will be able to truly forecast customer loyalty.”
Dr Young, a leadership development expert, entrepreneur, and adviser to some of the world’s most influential business leaders, says the famous Mayo Clinic in the US took the experience concept to a very high level. Its doctors were asked to wear suits when having consultations in non-clinical settings and all staff were required to replace worn shoelaces.
He advises business bosses to ask themselves the following questions: “Do you truly know your clients and do they know you? Do they feel your respect? Do they feel listened to? Do you engage them in problem-solving conversations that yield mutually beneficial solutions? How well do your daily actions demonstrate your commitment to your customers’ happiness?” What experience are you offering? What experience could you provide? Is there anything memorable or positive (theatrical ) about your product or service?”
