The principles of building customer loyalty are straight-forward. However, sometimes it's delivering on these principles that is the more difficult job. Chris Barling explains how to ensure customers keep coming back for more.
It's an oft-stated mantra that repeat orders come cheaper than acquiring new customers, and generally it's true. In fact, given the cost of generating fresh customers, building customer loyalty may be the difference between business failure and a blazing success. It's also much more fun to be in business with customers who like you and want to continue doing business with you.
But while the principles of customer loyalty may be simple, acting on them can be hard.
Don't talk, deliver
It's one thing to present a great offer to a new customer and win their first order, but then you have to deliver. If you can demonstrate that you really look after your customers and give them a great experience, they are likely to come back and order repeatedly.
This means that you should "walk the talk". If there's something worse than bad service, it's being told how great the service is, then receiving the opposite. It's much better to actually deliver than mouth platitudes about it.
Communicate, communicate, communicate
I have found time and again in business that when people don't know what is going on, they will speculate, mostly negatively. So keep your customers informed. One simple way online is to acknowledge every order immediately. This can be automated by your ecommerce package or you may choose to send a personal note.
If you can afford it, pro-actively monitor deliveries. Find out from your carrier what didn't get delivered as promised. Then contact your customer to let them know what's happened, before they even know that there is a problem. Customers will think this is great service, and it turns a failure into a demonstration that you care.
Tell the customer immediately if there is any issue at all with their order, such as an item out of stock or any other delay. Take full responsibility for dealing with it. Never blame anyone else. Nothing is more infuriating for the consumer than when a supplier blames some third-party over whom they have no control.
Support multiple channels
Customers are changing their mix of shopping channels and we must change with them. So be flexible and go multi-channel. In the Facebook age people are pretty demanding. Sure, they expect to find the address of a retailer online, but increasingly they expect to check product details and stock availability both online and in-store, then order (and return if necessary) using whatever channel they wish – web, phone or store.
You don't have to meet this "multi-channel" expectation, but the consequences will be that customers will go elsewhere. And research shows that multi-channel customers are the most profitable ones.
Look for every opportunity to personalise your service by displaying pictures of individuals and their contact details. Both stores and the internet can be impersonal, so you need to communicate that your business is run by human beings who care about their customers. This also reassures them that they have a contact if there is any problem – so much better than a faceless corporation.
Keep it up
When a mistake happens, correct it at the highest level. Customers appreciate it when a manager calls, rather than the most junior person – it makes them feel important to the company. Also the manager has more power to offer compensation or to rectify the problem. And a simple apology works wonders.
Remind everyone in your organisation that you are one company, and that it is everyone's problem if a customer is unhappy. Never let one department or staff member criticise another; customers will not be reassured by a company that is at war with itself. Focus on beating your competitors, not your colleagues.
Treat customer complaints as an opportunity, not a problem. As well as exposing specific problems that need to be fixed, customer complaints are a great opportunity to learn and improve. They should not be buried away and forgotten, but analysed. It's also good to share both positive and negative feedback with everyone in the organisation. If staff are mentioned by name, pass this on for praise but don’t publish names in the case of criticism. This reminds everyone how important it is to keep customers happy – and provides a well-earned pat on the back when things go well.
Review your service continually by contacting customers, or a cross section of customers, some time after delivery and checking that they are okay. You can do this by email or by telephone. This gives you feedback on your operation and also gives you another legitimate chance to sell something. If they have a problem, look for solutions and deal with it.
Customer loyalty schemes, as demonstrated by Tesco, reveal a fascinating insight into customer behaviour. Tesco group online and in-store customers together, even if different members of the same household are shopping with different credit cards or cash.
In order to work in the long term, loyalty programmes should provide a genuine and unique reward. I personally find it a big turn-off if I'm told by a brand that I'm being rewarded for loyalty, only to find that the same offer is being made elsewhere. In fact, I will become highly disloyal as a result. And I'm sure that I'm not the only one.
Also reward customers for inconvenience. For instance if you need to call a customer for any reason – for example for a security check – take the opportunity to offer something extra such as a gift-wrap service. This helps protect you without offending the customer.
From strength to strength
The practices needed to engender customer loyalty are not hard to discuss, but they are hard to do consistently over the months and years. The good news is they can enrich the experience of being in business and deeply reward you financially too. It's well worth the effort.
Chris Barling is CEO of Actinic