I have to confess - I love a bargain. I'm one of those shoppers who head straight to the sale rack to see what deals I can find there. I hate to pay full price for anything and can tell in great detail the deal I got on nearly every item I own. But there are instances when my thrifty nature doesn't win the day. That is when I've had such a positive experience with a business that suddenly duplicating that positive experience is WAY more important to me then the bottom line price. Some businesses that have provided that experience for me are Les Schwab and JRP Carpet Care. When I pull into Les Schwab with a leaking tire, out-of-whack alignment, or tires that need replacing I am greeted by a friendly worker who provides quick service, gives advice that doesn't makw me feel like an idiot and gets me back on the road quickly. I don't know if they've got the lowest prices and frankly... I don't care. I'm happy every time I go there. They are going to keep getting my business.
| In today's tight economic environment, many businesses are looking at ways to maintain sales and differentiate themselves from their competitors. |
Similarly, when my carpet falls victim to some sharpie marker toddler artwork, I call my favorite carpet cleaner. He's not the cheapest, but he's great at carpet restoration (and cleaning nearly any surface), My carpet is rescued AND looks newer and cleaner then I thought it could ever look. I get excellent service every time and on top of all that, he's super patient and very nice to my curious kids. These businesses have succeeded in developing loyal, satisfied customers.
Businesses that make it a priority to develop loyal, satisfied customers have a powerful competitive advantage. Loyal customers always return. They brag about their positive experience providing work of mouth advertising. They are willing to pay more for the product or service, and when there is a mistake, loyal customers are more forgiving.
In today's tight economic environment, many businesses are looking at ways to maintain sales and differentiate themselves from their competitors. Many companies monitor metrics like gross sales, and profit margins to determine how they're measuring up to where they want to be. These metrics are important- sales and profit margin data are an indication of your past success. But what about measuring your future strength? If you could measure your future strength, what would that do for your ability to compete? One measure of your future strength is your ability to develop loyal customers.
Let's look at some facts from "The Loyalty Effect" by Frederick R. Reichheld, Bain & Co.
Raising customer retention rates by 5% could increase the value of an average customer by 25% to 100%.
A 5% improvement in Customer retention translates into a doubling of margins.
Loyal customers always return and become a dependable lifetime sales stream.
So some questions for you... Do you measure customer satisfaction or customer loyalty? Do you know the difference? How often do you measure it? What are your latest measurements? How would you rank your organization's customer focus on a scale of 1 to 10? What would it take to get you to a 10? What would that increase enable you to do? What happens if your competitors get to a 10 before you do?
We'd be happy to talk with you to determine if a strategy of developing customer loyalty is a good solution for your organization. See how improving your customer loyalty can make the future brighter for you.
Julia Robinson
Steller Solutions
Reprinted from the August 2008 "Steller Ezine", an electronic newsletter of Steller Solutions that is full of FREE tips and resources for your business. Subscribe at www.Steller-Solutions.com
