Going deeper on Loyalty
In February 2016 I asked a group of 50 key account managers and sales professionals what specific words came to mind first when they heard the word customer. One of their top 3 was “LOYALTY”.
Customer loyalty can be seen as the holy grail of positions to be in. If you’ve ever watched Game of Thrones you’ll see people will even kill due to the level of loyalty attributed to others.
There are many benefits to those brands who have REAL customer loyalty
There’s a lot of data to support the value of cultivating customer loyalty:
- Loyal customers convert and spend with brands they like more often.
- Loyal customers spend more than others.
- Loyal customers tell their family and friends about positive experiences. Word-of-mouth marketing is more effective at driving new customers than branded content and advertising, and in turn, these referred customers become loyal customers that are likely to spend more than average.
- In the US, 40% of online shopping revenue comes from repeat customers, who make up only 8% of site visitors.
Every business wants loyalty from their customers.
But, most businesses I’ve met begin with asking the wrong questions on how to get them. They ask “what do we need to do?” what “loyalty schemes or incentives do we need to offer?”
Now there isn’t anything fundamentally wrong with asking these questions, it’s just where most organisations begin.
The real challenge starts when organisations define what is customer loyalty.
Example: Customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services.
You might read this definition and say, “sounds alright to me!”
However, doing more or coming up with new promotions, schemes and incentives does not create loyalty.
Customers expect your product or service to meet their perceived value.
Loyalty can be complex
We should never equate customer convenience for customer commitment. Having a product or service that delivers what is expected is only the entry point into the customer loyalty game. It is not the end result.
Customer loyalty is much more rich and complex, particularly for organisations that have seasonal customers, large one-off deals, cross-border selling and more.
Much of customer loyalty research measures no more than 2 or 3 areas. Most companies would need to review more than 6 different areas to start to get an accurate view of loyalty.
A customer who buys once or even twice, cannot be seen as loyal until you have identified clear behavioural touch points relevant to your audience.
In the linked previous article, I share why satisfaction results are not helpful measures to understanding customer success, growth and definitely not loyalty long-term. We need something more robust in thinking and approach.
I have a different definition of customer loyalty. I call Intimate Loyalty.
When you review the studies and evaluate your own experiences of the brands you love, you’ll agree that Intimate Loyalty will give you a more accurate view of a customer’s real loyalty to you.
Intimate Loyalty is your ability to create positive and impactful customer experiences that connect shared values and establish future commitments.
Why Intimate Loyalty?
It’s focused on the areas that lie beneath and move people to want to see a future with you.
The rational consumer will only stay as long as you provide that certain value. But an emotional customer is more likely to stick with you. According to Forrester Research, emotion is the #1 driver of loyalty.
“Strategies that rely purely on loyalty programs to offer points and discounts miss an opportunity to drive deeper engagement through emotional loyalty,”states Emily Collins, Analyst for Forrester Research.
Three known types of loyalty
We need to have a more comprehensive and focused review of loyalty that evaluates behaviour to see a customer’s core drivers at work.
Today there are three known types of loyalty that tend to be missed and misinterpreted as the same.
- Rational Loyalty – based on transactions where consumers are attracted to quantitative metrics like points and incentives.
- Behavioural Loyalty – customer continues to purchase the same products based on purchasing behaviour and convenience, instead of preference, sale, or emotional ties.
- Emotional Loyalty – consumers buy not based on incentives, but rather on things like customer service, storytelling, trust, and philanthropy.
Whereas Intimate loyalty is unique; it taps into both behavioural and emotional loyalty.
There are seven powerful activators of Intimate Loyalty any organisation can utilise. These activators consistently tap into the single most important attribute at the centre of all long-term loyalty; emotion.
Seven qualities of Intimate Loyalty
A Corporate Executive Board (CEB) study published by the Harvard Business Review, which included 7,000 consumers across the United States, United Kingdom and Australia, showed that loyalty to brands is almost impossible to achieve without one key element: “Of those consumers who said that they had a strong brand relationship, 64% cited shared values as the primary reason.”
The most important commitment you can have with your customers is who you are together. This rests on the ideas of shared values and future expectations.
Gaining true customer loyalty is not just about who you are, but who your customers perceive you are to them. It’s about what you represent. It’s about your trust level. It’s about the position you take on the things important to the customers you serve.
If your customers believe you, trust you, benefit from participating with you and that experience is shared, collaborative and consistent, they’ll follow you.
Here are a few questions you can ask today that I’ve used recently with my customers to start them on a journey to loyalty.
- What do your customers care about?
- Is this in line with your values and goals?
- What does this tell you about who you serve or what you believe?
- Are you living up to that expectation? If not, why not?
- What would need to be true for you to live by this?
- What is stopping you from doing this and how can you overcome that obstacle?
- How will this help you serve your customers better?
Loyalty is about an emotion, whereas satisfaction is about a rating. We need to create more places for an emotional connection with our customers.
One of the most powerful ways to grow loyalty is to create shared meaning and vision behind a specific goal relevant to the business and contacts you have.
When you decide to make the ordinary extraordinary and include your customers, you’ll get unrivalled loyalty and distinction in your customer relationships.
2. Eliminate curiosity
Be at the centre of all things your customer may be exposed to.
Be transparent about what’s in the market, and be the point of reference and resource for that insight.
We will often hide or compare ourselves with what’s out there for our customers. We do so in the hope they’ll see we are the best alternative.
This, in most cases, is a fear-based strategy that doesn’t consider the view of the customer.
When a customer is reviewing other options, they have not yet decided they want to leave you.
They are just doing what happens to many of us. Recency bias (the tendency to weigh up new information over older) coupled with the fear of missing out (what if this is the next big thing and we’re not on board).
Aggregators can tap into this at will as they have no real allegiance to a particular service or product e.g. Amazon. However, Amazon has become a curiosity killer. They’ve created a marketplace where people can look, compare and review products.
Amazon is one of the few companies in the world that has a 96% retention rate of customers, as they come back to buy more, even after comparing sites with similar products and similar pricing.
Aggregators make it easy. They don’t bother, penalise, pressure or otherwise. They state the facts, deliver an experience you can see for yourself, and give you the space to make a choice.
Therefore, they kill the curiosity of going somewhere else. They have their customers’ full attention.
3. Raise standards
When you set higher standards, the right standards show up.
This is often the case when it comes to our businesses.
We have no idea what standards we really have until someone says… “let’s redefine your standards!”
Apple was one of those companies.
When Steve Jobs was alive he was known as a man obsessed with the quality of the unseen things.
He had high standards and no one could escape his inspection. Every touchpoint with the product and customer was scrutinised.
I’m not advocating a micro-managed, finger-pointing organisation.
Simply one that is brave enough to say… “it’s not good enough” and challenge where they are.
This one single brave action was one of the biggest contributors when years later Apple was the most recognised, followed and coveted brand in the world.
Don’t be afraid to raise standards. Don’t settle. Go and push boundaries!
It’s how all things that were never done before, get started.
You too can produce that Apple brand level loyalty by applying standard raising in simple ways.
Begin with your own activity, then your department and then bring it to others.
4. Make space
In all cases where strong loyalty exists there is a meeting place where open conversation happens. Customers are connected to you, to other like-minded companies, professionals and people.
Through this, you can activate Social Identity Theory, which allows people who identify with particular groups to maximise positive distinctiveness and deeper affiliations.
The company Chick-fil-A do this very well. In fact, their deep alignment across the organisation on serving their customers has enabled them to grow at an enviable rate, roughly 13% annually. This means the business doubles every five to seven years, and has done so for a considerable time.
How have they done this?
Through a range of very intentional strategies shaped around core values and a nurtured culture of demonstrating care with their employees and customers. They:
- Build their base.
- Know what will make their customers happy tomorrow.
- Build relationships, not transactions.
- Stand up for their customers.
- Decide how they won’t grow.
- Bring grace to the table.
Organisations like this set up their businesses to be prepared to help customers connect with others, and not just them.
They create space for customers to express what they want; good or bad. When in that space customers feel safe and create deeper ties with the organisation.
5. Moments of truth
The term “Moment of Truth” was coined by Jan Carlzon, who managed the Scandinavian SAS Airlines.
He used the term to mean those moments in which important brand impressions are formed, and where there is significant opportunity for good or bad impressions to be made.
Ken Blanchard author of raving fans called this “making the ordinary exceptional”.
In its rawest form loyalty exists in the ordinary moments we might take for granted.
The ordinary moments are where it begins.
Just one example is a call I recently had with a customer. The purpose was simply to ask questions and get their insights on key areas in their business. I’m not saying I receive this type of ordinary to exceptional every time on a customer call, yet they do happen.
Think for a moment about the last time you received a note of thanks or response from a customer on how much they enjoyed your meeting or conversation?
You can choose to make any moment with your customers extraordinary. And what is great is that starting is easy.
Just pick one area; your emails, calls, or the way you respond to letters.
Then just make them meaningful.
Organisations who understand this set their businesses up to be prepared for moments of truth.
6. Humanise the exceptional
I was told by a business mentor once:
“In order to find the real magic potential in serving your customers. You must automate the predictable so you can humanise the exceptional.”
I don’t know who he heard that from first, but I now repeat it everywhere.
In the businesses I’ve been a part of and served as a consultant, it has been a powerful driver of customer lifetime value.
Humanising the exceptional is all about paying attention to the places where people are physically interacting with each other. Then asking, “how can we make this exceptional?”
Consider for a moment what ways you can as an individual and a business “humanise the exceptional”?
Let’s take Disney…
It’s designed to be a person to person experience.
You are their guest.
Part of Walt’s passion for processes is seen in his obsession with the details.
That wasn’t just about the rides, it went as far as the trash cans. Yes, the trash cans!
Cast members (employees) are trained to communicate and engage with all guests with energy, enthusiasm and positivity.
Walt Disney was famously quoted saying.
“I don’t want you guys sitting behind desks. I want you out in the park, watching what people are doing and finding out how you can make the place more enjoyable for them.”
Disney knew people were the key. He hired the best, treated them the best and they, in turn, gave phenomenal human to human experiences.
A great example of this comes with the attention shown to customers of what happens at different times at a Disney park.
Despite the efforts made to inform customers of ride height limits, often a young child would wait with a parent to go on a ride, only to find out they weren’t tall enough to go on it.
Disney noticed that this was a major complaint from parents and, more importantly, ruined the experience for children. The solution was to give staff permission to hand out a special pass when this happened, allowing the child to skip to the front of the line on their next ride.
In doing this they found it had an additional impact. Parents knowing this could safely leave their child to go on the ride. The parent went to relax and food sales went up by 34%.
7. Make the Customer the Hero
If your language with customers focuses on selling them your offer, rather than the benefits, results and growth they’ll get from it, then your customers are not the hero in your company.
Making the customer the hero is simple.
When they arrive on your doorstep they’re looking for something to help them conquer and achieve something. You’re part of their story and journey to triumph.
You’re Samwise Gamgee, they’re Frodo Baggins. They’re Luke, you’re Yoda. Get the picture? 😀
Take a leaf out of the fitness industry, that has its critiques in many areas. Yet, it is built on the story of its customers…
The before and after photos.
Where Bob or Susie were a year ago, now look where they are today. Amazing?
People who see this aren’t just concerned with how they did it but where they went to do it.
Your job is to be a mirror to your customer so they can see themselves more clearly. They can see how much better they’re getting because you’re there.
Give your customer the platform.
These loyalty drivers exist in almost every case of raving fan loyalty with a brand, business, personality or cause; whether they recognise these ideas or not.
Organisations like Chick-fil-A, Southwest Airlines, Apple, Charity Water, Amazon and Dell are great examples.
No company does loyalty perfectly, but those that actively engage it far outperform their competitors.
“Satisfaction is about a rating, whereas loyalty is about an emotion”.
Actively seek out the places you can create an emotional connection with your customers. Remember that the most powerful way to grow loyalty is by creating a shared meaning and vision behind a specific goal, that is relevant to your business and customers. Once created, build it into your sales process and proposals.
Stop and consider the many different interactions you have your customers. Write them down and highlight the places where you have the opportunity for an emotional connection.
If you’d like to connect with other key account managers, business leaders and sales professionals in that pursuit to have more profitable customer conversations, grow sales and customer loyalty, you can do so here.
Your Customer Growth Guide