There’s no shortcut to transforming potential buyers into loyal customers. There are principles that, when applied consistently over time, garner trust and loyalty from your consumers. The journey to establishing a strong connection with them is similar to forming strong relationships in your personal life. At the heart of the process is having a deep understanding of your customer’s needs, motivations, and desires. However, understanding your customers isn’t enough to inspire loyalty. You have to follow through on your promises and connect with them on an emotional level. Your values and employees drive this experience.
Understanding your customers
The key to a winning customer loyalty strategy is a deep understanding of your customer. If you don’t have a proper understanding of what motivates your customer and what they value, then you set yourself up to fail. So, you need to do your research and consider how your brand fits into their life.
Research
How do your customers feel? Collect information on how your customers feel about your services, brand, and industry. Your findings will give you a report card on how you and your industry are doing.
Who are your customers? Collect demographic information on your customers, such as age, income, location, and primary language. This data will start building a picture of who your customer is.
What is important to them? Collect psychographic information like personality, attitudes, interests, and values. This data gives you a more holistic view of your customer, giving you the context to make better decisions.
The value you deliver
Once you know your customers, evaluate how your brand and product fit into their lives. What needs and underlying desires are your customers trying to fulfill? This is important because the better you align yourself with your customer, the more value you provide and the more they come back to you to meet those needs.
A great tool to frame your understanding of value is the Value Pyramid. The Value Pyramid is a concept developed by Baine and Company, one of the big three global strategy and management consultants. The Value Pyramid is an expansion of Maslow’s Hierarchy of Needs. Baine and Company’s model takes Maslow’s concept and uses it to frame our perspective of how products and services deliver value.
In their research, Baine and Company found that businesses that fulfilled more of the needs on the pyramid generated more customer loyalty and produced hire profits. It was not as simple as addressing the elements in the pyramid, companies had to perform well at satisfying the needs it addressed. Baine and Company used the widely adopted Net Promoter Score (NPS) to measure customer satisfaction.
Baine and Company also found that not all the elements are created equal. As you would expect, what’s important to customers varies by industry and customer group. The one outlier was quality. Quality ranked number one across the board with customers and industries. I invite you to use the pyramid to identify the needs your business fulfills and identify opportunities you can leverage. Remember that it’s not about the number of needs your product meets, but the quality of your execution.
Promises kept and what to do when they are not
Your brand is not the ads you place or the font in your logo. Your brand is what your customers say about you when you are not around. Your brand is influenced by what you promise and what you deliver. Your business is promising something, whether those promises are actively managed or not. Every interaction is an opportunity to influence how your business is perceived and inspire loyalty.
A survey by American Express found that happy American customers will share their positive experiences with and refer about 11 people. They also found that they share their negative experiences with 15 people. This means that as a business, you need to actively manage what you’re communicating to your customers and be consistent. This way, customers know what to expect, and your team knows what to deliver. This will minimize negative customer experiences.
Your company’s values and promises must not only be communicated to those outside of your organization. That message needs to be expressed internally. Your employees are your most important brand ambassadors. If your marketing is communicating one message and customer interactions with your teams are different, you come off as inauthentic. Inauthenticity destroys trust with your customers, trust that is difficult and expensive to rebuild.
No person or organization gets it right every time. When your business breaks a promise, your team needs to be ready to address the issue appropriately. American Express also found that 33% of American customers say they will consider switching companies immediately following a single instance of poor service. 60% of American customers say they will consider switching companies following two to three instances of poor service.
Speed Isn’t everything
Contrary to most people’s intuition, speed is not the number one factor in a good customer service interaction.
American Express found that 68% of American customers believe an excellent customer service interaction is fueled by a pleasant experience. While 62% say a knowledgeable experience, and only 42% say a quick experience.
Making the experience easy and enjoyable should be the priority. Research conducted by the Corporate Executive Board Company, a subsidiary of Gartner, found that training your staff to make the customer service experience easy and heading off downstream problems helped customer satisfaction. Their research revealed that it decreased customer service calls per incident by 16% and customer churn by 6%.
Empower your employees to deliver on the promise you made to your customers. Encourage them to take the time they need to solve the immediate problem and head off the one that they clearly see coming down the road. You’ll have more engaged employees and happier customers if you follow these steps.
Connect with your customers
We all have that friend that’s our go-to person for advice on what movie or book to check out or that we call to have fun around town. Well, when consumers describe the kind of relationship they want to have with a company, it’s not far off from that. So as a business owner, you would probably jump at the opportunity for your business to be thought of as a friend. Well, if it were only that easy. Deloitte researched how to build emotional connections with customers. Their findings showed that customers want brands to empathize with them, personalize their content, and have contextual awareness. Let’s break those down.
Empathize – Customers want brands to understand them. They want brands to value the things that are important to them. For millennials, this can mean caring about climate change or how your supply chain sources its products. Empathize also means that they want you to communicate in the same ways they communicate. This means using the same mediums and platforms. It also means speaking in the same way, like using cultural references important to their community.
Personalize – Create an experience unique to them. It can be something as simple as including the customer’s name in your email communications or as complicated as leveraging purchase and behavioral data to produce unique interactions.
Contextual awareness – Just like you would be annoyed if you told your friend when your birthday was, and they asked you again for the 5th time two weeks later, customers want brands to remember what information they’ve given them in the past and leverage it to make their experience frictionless. Be careful not to cross the line into creepy territory.
Your employees make the customer experience. No matter if their role is customer-facing or not. Miserable employees deliver miserable experiences inside and outside of your organization. It’s imperative that businesses foster a positive company culture. When your employees are happier, they work harder and produce more (and better) work. So, don’t forget to empathize with your team, give them the tools they need to succeed and the means to take care of themselves and their families. When customers see that you take care of your employees, they trust you will take care of them.
The key takeaway
The key to encouraging customer loyalty is to create an experience that makes your customers feel comfortable with you; that makes them feel like you understand them and are doing things to make their life and interactions with you as simple as possible. If you use that as your north star, you are setting yourself up to build memorable, emotionally relevant experiences that motivate your customers to come back to you again and again. For more business insights and news, subscribe to our newsletter.