Customer experience

Service culture: Encouraging customer loyalty

- May 18, 2009 2 MIN READ

Loyal customers return more often, resulting in more sales and lower acquisition costs. Yet many businesses do nothing to encourage loyalty. Here are some simple steps to improve things.

Sooner or later, you are going to have to decide whether you want to get competitive by continually lowering your prices or by investing in the one advantage your competitors can’t or won’t replicate: your superior, motivated, service culture.

What is a service culture? It is the belief that no transaction is complete unless the service customers receive is sufficient enough to motivate them to return. It is providing customers with service that is so exceptional, they wouldn’t even think of doing business with anyone else.

Loyal customers will be much more likely to tell their friends about your business. Therefore, not only do loyal customers spend more, they also help your business to grow by bringing in more new customers.

And all this will cost you is some effort!!

Building customer awareness, communicating your benefit message and creating customer loyalty takes time. By offering your customers a service culture, you will succeed in creating rich, personalised experiences which will lure customers away from your competitors – and help you retain them year after year.

Truly successful organisations use three steps to build customer loyalty and relationships:

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  • Determine mutually satisfying goals between their business and customers.
  • Establish and maintain customer rapport.
  • Produce positive feelings in the business and the customers.

A service culture is not just about the transaction level, it is also how well we look after them when they’re not in front of us, what Jan Carlzon called – ‘Moments of Truth’.Retention Marketing is all about – Action – Reaction – Feedback – Repeat. The “one message fits them all” approach is not only less effective, it converts poorly.

To provide messages that are as relevant as possible, it is useful to segment your customer base. The segmentation can be done based on a number of criteria and depend on what you offer and the types of customers, their interests, financial status etc. A single customer can be assigned to multiple segments, which overlap and serve different purposes.

There is solid evidence that contact frequency of between 60 and 90 days is acceptable to the majority of customers. 90 days fits very conveniently into financial quarters and makes it easy to manage and plan for with generic communication such as a newsletter.

It does not mean that that this ‘planned’ for strategy should be the sole contact activity undertaken. In order to build credibility with the customer, there needs to personalised contact not in synch with the planned quarterly initiative.

Personalised communication occurs as an opportunistic event, you might see an article of interest to a single customer and forward it to them via email or snail mail. How will you recognise these articles?

Their name may come up in an industry newsletter and you can drop them a congratulatory note. If there is no obvious reason, you can call them just to say ‘G’day’. Sending a hand written card saying thanks for being my customer is another way to boost your credibility with your customers.

If you manage your customers at every stage of the customer life cycle, you maximise their profitability and lifetime value to your business.