Tips on measuring your current loyalty effectiveness.
No matter what business you're in, there's
always room for improving on customer loyalty. This test is a good way to
measure for your current loyalty effectiveness.
Measure your current loyalty effectiveness by answering the following 8
questions: (Answer yes or no.)
1. I place as much emphasis in my business on building staff loyalty as I
do building customer loyalty.
Why you should: It's darn near impossible to
build strong customer loyalty with a staff that is in constant turnover. Why?
Because customers buy relationships and familiarity. Customers want to buy from
people who know them and their preferences. Key rule of loyalty: Serve your
employees first so they, in turn, can serve your customer.
2. I routinely ask my customers about their unmet needs and unvoiced
complaints.
Why you should: For most companies, only 10% of
complaints get articulated by customers. The other 90% are unarticulated and
manifest themselves in many negative ways: unpaid invoices, lack of courtesy to
your front line service reps, and, above all, negative word of mouth. With the
Internet, an unhappy customer can now reach thousands of your would-be customers
in a few keystrokes. Head off bad press before it happens. Make it easy for
customers to complain. And treat complaints seriously. Establish firm guidelines
regarding customer response time, reporting and trend analysis. Make employee
complaint monitoring a key tool for executive decision making.
3. I am continually improving my firm's ability to
meet (and whenever possible, exceed) my customer's rising customer service
expectations.
Why you should: Research shows that
responsiveness is closely tied to a customer's perception of good service. The
advent of the Internet has changed the customer's perception of responsiveness.
More and more, customers are coming to expect round-the-clock customer service.
Moreover, customers now arrive at Web sites time-starved and eager to locate
answers. Technology tools such as customer self service, email management and
live chat/web call back are proving increasingly critical for companies as they
address the demanding customer's responsiveness needs.
4. I view my lost or inactive customers (those that
have bought from me in the past, but who do not buy from me now) as better
targets for future sales than new prospects (those who have never bought from
me).
Why you should: Research shows that a business
is two times more likely to successfully sell to a lost customer than to a brand
new prospect. Yet, winning back lost customers is frequently the most overlooked
source for incremental revenue for most firms. Why? Because most firms consider
a lost customer a lost cause. With the average company losing 20% to 40% of its
customers every year, it's imperative that firms create hard-working strategies,
not only for acquisition and retention but also for win-back. Since no customer
retention program can be 100% foolproof, it follows that every company needs a
process for recapturing those high value customers who depart. Think of it as
loyalty insurance.
5. I am increasingly working to ensure my "front
line" employees are equipped to communicate with customers well on both a verbal
and written correspondence basis.
Why you should: Call center agents will be the
"loyalty warriors" of the future for many companies. Converged call centers that
bring together multi-channel access points (phone, fax, email, web) are on the
rise. Gartner Group estimates that 70% of North America's call centers will
migrate to multi-channel contact centers by 2005. This means these agents need
to be as equipped to write a well-written email reply and navigate the company
Web site as they are in being helpful and friendly on a phone call.
6. One of my goals for the future is to find
effective ways to turn my single channel customers into well-served multiple
channel customers.
Why you should: Research suggests
customers who engage with a firm through multiple channels exhibit deeper
loyalty than single channel customers. But take note: This finding assumes
customers get the same consistent service whether they come into the store, log
on the web site or call the service center. To accomplish this, firms must
internally coordinate sales and service across multiple channels so that
customer preferences are accessible no matter how the customer chooses to
interact. Today's customers expect to hop from channel to channel. And they
expect good service to follow.
7. I employ the philosophy "All customers are "not created equal" when
building customer loyalty strategies and programs.
Why you should: In building customer loyalty,
the 80/20 Rule is alive and well. Roughly speaking, 80% of your revenue is being
generated by 20% of your customers. All customers are not created equal. Some
represent more long-term value to your firm than others. Smart companies segment
their customer by value and monitor activities closely to ensure high value
customers get their fair "share" of special offers and promotions. Unlike many
firms who simply measure overall redemption, these savvy loyalty builders pay
close attention to who redeems.
8. In gauging a customer's true loyalty, I place
more importance on my customer's actual buying behaviors than anything else.
Why you should: A customer's buying behaviors,
not attitudes, are the truest reflection of loyalty. Generally speaking,
customers become loyal to a company and its products and service one step at
time. By understanding the customer's current loyalty stage, you can better
determine the customer's current loyalty level and what's necessary to move that
customer to the next level of loyalty.
In 1988, Jill Griffin founded the Griffin Group in Austin,
Texas specializing in customer loyalty research, customer relationship program
development and management training. Her clients range from Fortune 100
corporations to fast growth start-ups. Clients include Dell Computer,Deloitte
& Touche, Sprint, Days Inn, Advanced Micro Devices, Raytheon Aircraft,
Marriott, Ford and the U.S. Navy.
Jill is the author of the business best seller, Customer Loyalty: How to Earn It, How to
Keep It , Jossey Bass/John Wiley. The book is included on Harvard Business
School's "Working Knowledge" list of recommended books. She is co-author of Customer Winback: How to Recapture Lost
Customers and Keep Them Loyal deemed one of the 30 Best Business Books of
2002 by Soundview Executive Book Summaries.
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