Winning True Customer Loyalty and Trust in a recession

From MyCustomer.com - A blog I subscribe to....

I really enjoyed this article because it reaches down to the "gut" level in customer loyalty. The article discusses the role of "Trust" in customer loyalty.

Here's a great quote from the article:

"Loyalty is a misused term. Most organisations think that it is about customers being loyal to them when it should be the other way round."

Lots to think about. I encourage you to read it.

http://www.mycustomer.com/cgi-bin/item.cgi?id=134190

Customer Feedback - Near Term Value Impacts

Tough Business Environment? Try Customer FeedBack for Short Term Impact!
By Cedric Nash

Key Points

1. Reinforce relationships with your most valuable, core customers.
2. Identify immediate action situations & opportunities:

- unhappy customers at risk

- new sales opportunities.

3. Create a positive customer experience simply by asking for feedback.
4. Send a clear signal to employees about what’s important and being measured.

Most business managers would agree on the value of systematically collecting and using customer feedback. Few would argue that it’s not a good thing to know as much as possible about your customers’ perceptions and attitudes about your firm’s products or services. So why then don’t more firms make the effort and relatively modest investment to systematically monitor, measure and act on customer feedback?

Some smaller firms simply don’t see the need. They feel that their informal mechanisms and personal contact with customers provide a stream of feedback. Other firms understand the potential value but aren’t ready to make the commitment to both regularly gathering customer feedback and following through with appropriate actions. And they realize that a sporadic effort, or one with no commitment to follow-through, can actually be worse than none at all because false expectations are created.

Yet another reason is that feedback management programs are often viewed as investments with long-term ROI horizons, taking years to deliver quantifiable value to the firm. And in tough economic times they get pushed aside by more urgent budget priorities. This is a misconception. While it’s true that gathering and managing customer feedback does indeed deliver great strategic value when done systematically over time, even beginning the process can deliver tangible and significant short term benefits. This article discusses how.

1. Reinforce relationships with your most valuable, core customers

For many businesses the 80/20 rule applies when it comes to customers. 80% of revenue/profits come from 20% of customers. This 20% is the critical core of your customer base and you need to do everything possible to retain them when acquiring new customers may be difficult. In other words, you need to assure that they are completely, 100%, satisfied with your products/services, ideally to the point of being willing to recommend you. And if you find that any of them aren’t you must take quick action to address the source of dissatisfaction.

So how do you do this? If you have a “customer feedback” program or “customer experience “ program in place, chances are you already measure and know the current satisfaction/loyalty levels of your core customers. But if you don’t, starting such a program can quickly deliver actionable information about customer’s satisfaction and loyalty levels. And if done with the right tools, you can easily segment the data from your “key” customers and focus your efforts on this critical core. Where problems are identified you have the ability to reach out and correct them. So concerning your core customers, the result of initiating a customer feedback program has multiple near-term benefits:

• You get solid data indicating the satisfaction/loyalty levels of key customers at a point in time.
• For already satisfied customers, you’ve just provided further evidence that you value their business and respect them enough to ask for their feedback.
• For dissatisfied customers, you have the ability to identify them and directly reach out to them to “Save” them before they leave you for a competitor.

2. Identify “ Immediate Action” Situations/Opportunities

One of the nearly immediate benefits of launching a survey-based customer feedback program (with the right tools), is that some customer situations are typically identified which call for immediate action. If your survey tool supports feedback segmentation and “follow-up”, you can then take direct and immediate action with these customers. These situations tend to fall into two categories:

• Very unhappy customers who have clearly expressed their dissatisfaction. By openly expressing dissatisfaction in a survey customers are providing good-faith feedback. If you take quick advantage of this opportunity while the survey experience is fresh, you can often solve the problem and “convert” this customer to fully satisfied with a little effort. Being this responsive to customer dissatisfaction is unusual and it takes some preparation, but such a direct and rapid response shows serious concern about your customers and can have an immediate and positive impact on the customer base.
  
• Satisfied customers who are looking to buy more from you (that you were unaware of).
  Another opportunity for immediate action are those customers who express or somehow indicate in the survey that they have additional needs or would like buy more from you. By asking for feedback you are coincidentally uncovering new sales opportunities that you may not otherwise have found out about for some time.
  
• Quickly surface problems in your processes, products, etc., that are impacting your customers. Most problems will eventually find their way to your attention, but how many customers will have left you in the meantime? Asking for direct feedback will get you direct feedback – problems and all, and finding problems early before customers defect is like finding a solid gold nugget.

3. Create a positive customer experience simply by asking for feedback

What if you could contact all your customers in a non-sales mode, demonstrate how you value and respect them, and also portray your brand in a positive manner? In other words creating a positive customer experience that you control. This is an immediate by-product of initiating a survey-based customer feedback program. With a carefully crafted and branded online survey, you are creating a positive customer experience at the same time you are gathering vital data about your customers. Each time you do it (assuming reasonable intervals), you reinforce the notion that you value your relationship enough to ask for feedback. You can also create even more value by sharing some of the survey findings with customers and explaining how their feedback influenced your product or service decisions. It’s a real show of respect to close the loop this way, and it reinforces the collaborative nature of your relationship. Some survey tools make this easy to do.

4. Signal to your employees what’s really important (and being measured)

One of the major near-term benefits of initiating a feedback management program is that it sends a very clear signal to everyone in the organization that customer perceptions are critically important. This may involve some employee education and communication efforts to disseminate the information, but the gist of the message to employees is simple and clear:

• Customers’ perceptions of their experience matter! They pay the bills and if they’re not happy they can easily go elsewhere. The success of the organization is potentially at risk!
• Since customer perceptions affect the entire organization, everyone should be concerned about the customer experience reflected in feedback. Some may have a more direct impact on the customer experience than others, but it’s critical to the firm and therefore everyone’s concern.
• It’s important enough to management that it will be measured regularly and systematically! In other words, the firm is asking the customers to give them a regular “report card” on critical elements of the business. If problems surface they will get management attention and will be addressed.

Conclusion

Customer feedback management or customer experience programs designed to measure and quantify your customers’ opinions and attitudes are often incorrectly perceived as “long-term” efforts which don’t deliver near-term benefits. Its true that the “best of class” feedback programs are ongoing efforts which provide long-term strategic value to the organization. However, even getting started with a customer feedback initiative can provide surprisingly quick opportunities to positively influence your customers, and your bottom line. In fact, in a weak economic environment it’s more important than ever that you make customer feedback a basic part of your operation. You will typically see some very real short term benefits that will help assure that you’ll be there for the long term.