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Tagged: loyalty

Why You Need More Than One Metric to Describe Customer Loyalty

August 31, 2016

As a business leader, you know the importance of keeping your finger on the pulse of customer loyalty. A critical part of customer relationship management, customer loyalty goes well beyond a customer making a purchase. Loyalty is steeped in the relationship between the company and purchaser.

A loyal customer believes your organization offers the best option. Loyal customers will purchase a product or service from the same brand, over a long period of time, while turning down competitors, and spreading satisfaction through word of mouth. Loyal customers will stay with you even in trying times. 

Customer loyalty can’t be summed up in a single number.

customer loyalty can't be summed up in a single numberWhile loyalty may appear as a single topic on your priority list, it would be a mistake to try to measure it with just one indicator.

As an example, many businesses looking to improve customer satisfaction use a Net Promoter ScoreSM (NPS®). This system measures the likelihood that customers will recommend a product, service, or company to others, and is often touted as “the only number you need to know.” Likelihood to recommend is certainly worth measuring; CSP uses the NPS® system ourselves. However, this score alone does not tell you enough.

Think of it this way: You wouldn’t use your blood pressure as the sole indicator of your total health, right? It’s important, sure, and it would be convenient if that was all you needed to pay attention to, but it’s not the only vital statistic your doctor needs to track to assess your overall well-being. The same logic applies to customer loyalty.

Instead, what you should aim for is a customer loyalty index that reflects multiple measurement methods and tracks them over time. This allows you to break down the customer relationship into feedback, perceptions, and issue resolutions. Ultimately, you’ll be able to see what you need to do to maintain and increase your loyal customers.

Aim for a full picture of your organization’s brand loyalty.

Measuring customer loyalty in a variety of ways gives you a more comprehensive, multi-dimensional view of your customer loyalty situation. In addition to at-a-glance scores like NPS®, a customer loyalty index can include attitudes and behaviors such as overall satisfaction with customer service, and likelihood of a customer to make a future purchase.

Capturing this data will yield many benefits, among them:

  • Producing a good view of your current standings with the customer,
  • Predicting future retention, and
  • Providing the foundation for building a loyalty profile for your customer.
Closely examine your metrics at the outset.

According to IRI, 44% of Millennials claim to be brand loyal. With their impressive purchasing power, figures like that should motivate you to keep the company-customer relationship at the forefront of your strategic planning.

What do you want your measurements to tell you? Start with the results you want to see to help you decide how to prioritize the data you collect. You will likely find you need more indicators than you thought, but taken together, all these measurements complement one another.

Studying the results of your customer research will produce opportunities to compare your organization against industry standards and your direct competitors, identify your strengths and weaknesses, and zero in on customer preferences. CSP’s Customer Experience Management solutions are designed to provide exactly these opportunities, with the added benefit of guidance from seasoned experts to help you identify what to focus on and what steps to take.


You might also want to read:

Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

Customer Loyalty: 9 Ways to Influence Emotions, Reasoning, and Behavior

July 19, 2016

Customer loyalty is a hot topic, but what exactly is a loyal customer? The first thing that might come to mind is “a customer who keeps doing business with you.” That sounds reasonable; however, it’s also incomplete.

It’s likely that some repeat customers come back only because they are under a binding contract, intimidated by the process of changing providers, or sticking with you from sheer force of habit. In each case, it wouldn’t take much for a competitor to lure them away. That is why customer loyalty, real loyalty, is such a critical factor in your company’s success.

A more comprehensive definition of a loyal customer is one who believes in the value of what you have to offer; who has evaluated you as the best available option; and who continues to choose your service or product over the competition and encourages others to do the same.

A more complete definition of customer loyalty

A more complete definition of customer loyalty

Within this definition are three distinct aspects of customer loyalty. Let’s take a closer look at them and what you can do to influence each type.

Emotional loyalty

The emotional aspect is crucial in the relationship between customer and company, and a powerful driver of the other two types of loyalty. Customers not only want to feel like they can trust your company; ideally, they also like your company. Other important emotional values include friendliness, attitude, and “cool factor.” A value proposition that is associated with these sentiments will be much more likely to invoke loyalty.

Emotional loyalty is especially important in fields where big financial interests and sensitive data meet personal experiences, like the banking industry. Events like the financial crisis, market instability, and bank account hacks can damage customer loyalty, and (re)building trust is key. To maximize emotional loyalty:

  • Be transparent in your communication with customers.
  • Make customer service a top priority throughout the organization.
  • Show customizers that you care through your marketing and advertising messages.
Rational loyalty

This aspect of customer loyalty reflects the logical, unemotional side of the customer’s purchase decision. In other words: do your customers think they are getting the best deal? To maximize rational loyalty:

  • Reward repeat customers.
  • During the sale, clearly outline the tangible benefits you can offer.
  • Offer attractive extras, like credit cards that earn points, flyer miles or cash-back rewards.
Transactional/behavioral loyalty

Finally, transactional or behavioral loyalty can be seen as momentum. Once a customer starts buying from a particular business or becomes attached to a brand, as long as emotional and rational loyalty are each well-nurtured, transactional loyalty follows and becomes habitual. Because this type of loyalty is so heavily reliant on the other two, it can be derailed if a customer becomes dissatisfied emotionally or rationally.

To optimize the shopping process itself:

  • Make sure all service channels, including websites and apps, are easy to use and up to date.
  • Various service channels should be connected; customers should be able to shop however, whenever and wherever.
  • Offer extras that make shopping fun, like gamification elements or apps that reward customer engagement.

 

Building customer loyalty can seem like a complicated process. Understanding it, however, starts with a simple step: knowing your customer. Voice of the Customer data is where you’ll discover the key components that drive your customers’ loyalty – and what might be driving them away. Equipped with that knowledge, you can make specific changes within your organization to influence those key drivers in the desired direction. You’ll also want to use periodic benchmarking to evaluate how you are performing against those measurements compared to your competitors.

For more information about Voice of the Customer and Competitive Benchmarking solutions from CSP, contact us online or call 800.841.7954 ext. 101.

How to Grow Loyal Customers into Brand Advocates

June 8, 2016

The blueprint of a brand comes to life with the accumulation of loyal customers, and it expands its reach by shaping those customers into advocates. This two-tier configuration is a launching pad.

There are two parts to the first tier. First, the customer needs to believe the services have quality. One successful transaction can plant the seed. Additional successful transactions build confidence; even when some error occurs on the side of the company, the loyal customer is ready to overlook it.

This trust ties directly into the customer’s level of allegiance. All it takes is one bad deal to push your customer to a competitor — but the loyal customer will standby because there’s usually something in it for them.

Loyalty cards and programs can be used to measure customers’ habits and keep them close.

86 percent of those in a loyalty program feel their efforts are worth the prize. 83 percent say the program keeps them anchored to the brand. It seems like every business has a rewards card or member program, and that’s because they work. The 2015 Bond Brand Loyalty study revealed 86 percent of those in a loyalty program feel their efforts are worth the prize and 83 percent say the program keeps them anchored to the company.

Financial service companies still lead the way with loyalty-based programs. The two most important factors to customers are being able to easily use their rewards, and being able to choose them. Cash-back rewards are the most attractive feature due to their unlimited nature. This type of freedom can launch debit card usage upwards of 200 percent.

Once a person commits to the brand, it’s important to keep the high-quality rewards in play – the competition is steep, with a surplus of 430 million credit card loyalty memberships in the U.S.

To grow loyal customers into advocates, first, institute a relationship and foster it.

The transition sparks when customers begin to tell friends about how easy it was to obtain a decent loan with low interest rates, raving about the employee who was able to seal the deal.

The humanization of the customer experience cannot be overlooked. To have a quality product or service is not enough to keep the customer interested. There are simple ways to evolve your professional relationship with the customer:

  • Use their name as often as possible, including the first name when appropriate. Inclusion begets confidence, and confidence allows the customer to be more open to taking risks and trying new things.
  • Learn their reasons for using your services or choosing your products. If they’re opening up a savings account for their oldest child on his twelfth birthday, ask when their other children have birthdays and send personal reminders accordingly.
  • Ask them for their opinions relating to your brand by having them walk you through their experience. Face-to-face conversations can reveal more.
  • Pay attention to reviews and feedback. Not all content will be positive, so keep your eyes open for weak links. Put more effort into building those up while maintaining the high level of satisfaction in other areas.
  • Treat every interaction with your customers as the very first interaction and continue to learn more about them. They become more valuable with time.

An advocate not only acts as a free advertisement, but he or she will also continue to make purchases and use services – at least twice as much as the average customer. Some case studies have shown upwards of 10 times as much continued buying behavior.

Draw customers in with quality, and keep them with distinction.

In 2014, a startup investment company, OurCrowd, shared its secret to boosting customer loyalty: blending content with community. By powering and sharing content, you increase communication and, therefore, trust. Furthermore, OurCrowd discovered content wasn’t a one-dimensional marketing tool, but a bridge that filled the gaps of knowledge.

 

Look closely to discover what is missing in the link between your brand’s mission statement and the customer’s experience. Educate your customers, showcase your expertise, grow together and create a transparency that will boost customer relationships.

Treat Every Impression As a First Impression to Build Loyalty

March 18, 2015

Common wisdom holds that you only get one chance at a first impression, the best opportunity to influence on a person’s overall opinion than anything that follows.

Yes, it’s true that a first impression can only happen once. But first impressions are also happening all the time. Every interaction between a business and a customer begins with an opportunity to set the customer’s expectation of their experience.

shaking hands on a first impression can impact loyaltyWhether for a brand new audience or with longtime returning customers, the first few moments of any encounter with your business impacts their sense of satisfaction and likelihood to remain loyal.

Simple friendly gestures and a professional attitude may seem like small things, but they can make a big difference on the front lines of customer service. Customer-facing personnel get dozens of opportunities a day to put these principles into practice, but it doesn’t fall only on their shoulders. It’s the top-to-bottom culture of a business, down to the individual workplace, that supports a superior customer experience at every touch point.

Not every first impression happens face-to-face, of course. These days, a business’s digital presence creates even more touch points. Every visit to your website, social network profiles, and mobile site or app, and every email or SMS message you deliver to your audience, is another opportunity for a first impression.

Customers care as much about useful and attractive website or app design, and polite, engaging behavior on social media, as they do about the behavior of a customer service rep. This is where customer experience and user experience overlap.

Whether considering a personal interaction or a digital one, the same fundamental rules of first impressions apply:

  • Be polite and courteous. Etiquette may have evolved over the years, but basic good manners still matter. Don’t underestimate the importance of Please and Thank You.
  • Be friendly, from the heart. Trust your customers to be able to spot the difference between parroted or forced friendliness and genuine interest. Even a scripted response delivered in a pleasant tone of voice can create a smoother experience.
  • Be timely. Make it clear you are ready, willing, and able to help. In the age of instant on-demand gratification, customers don’t like to be kept waiting for a resolution or be given the run-around between different resources and personnel.
  • Be thoughtful and considerate. Empathize with customers and strive to anticipate their needs and accommodate their challenges. This goes double for customers who are bringing a complaint to your attention.
  • Use the customer’s name – for in-person and phone greetings, when interacting with them on social media, and with custom fields on your website and email templates. “Dear Customer” could be anyone.

The customer experience is a journey, and every step along that journey contributes to long-term loyalty and satisfaction. So treat every step like it’s the first.

For more information about CSP’s customer experience strategies and the programs we build to support them, contact us today by phone at (402) 399-8790 ext:101, via our website, or on Twitter @csprofiles

More Than Just a Program, Voice of the Customer is a Promise

February 4, 2015

Instating a Voice of the Customer program to capture customer experience insights has many practical benefits:

  • It takes something vague and subjective, like customer experience, and turns it into quantifiable metrics.
  • It clearly identifies the key drivers of customer satisfaction that are unique to each business and each customer base.
  • It shows trends, progress, and declines over time, allowing you to adapt to changes as you go, and see warning signs ahead of time if something is awry.
  • It plays an informative role in employee training, performance review, and shaping a company’s internal culture.

And that’s just naming a few.

But while all of those reasons are worthwhile, to the customer, they’re just corporate jargon that has little to do with the reality of their lives and their relationships with your business.

Looking at the notion of customer experience from their perspective, Voice of the Customer isn’t a toolbox, it’s a promise.

voice of the customer is a promise

By actively listening to customers, you promise to value their opinions just as much as those of the shareholders or owners who are profiting from their business.

rio bank newsletter voice of the customerThis newsletter produced by Rio Bank for its customers puts that promise front and center by telling customers what steps this Texas institution is taking to look out for their interests, and transparently discloses exactly what goals will be satisfied through Voice of the Customer measurements and initiatives.

Customer loyalty starts with accountability to your promises. Accountability starts with a Voice of the Customer program.

A guarantee to put customers front and center in business decisions can inspire confidence, especially if they see enough direct action to prove they’re not just empty words. It also gives them an invitation to raise their own voices and participate, knowing those voices won’t fall on deaf ears.

While it’s still true that the squeaky wheel tends to get the grease, for any vehicle to move forward, all of the wheels must get enough attention and care to roll along smoothly.

Voice of the Customer keeps the customer-facing side of any business running like a well-oiled machine, lubricating relationships between employees and customers, customers and products, managers and staff.

Are you delivering on your promises? CSP is passionate about improving the customer experience, and can show you how you measure up against your customers’ expectations. Contact us today to find out more.

Online-Only Banks Forcing Traditional Institutions to Upgrade Their Customer Experience

November 12, 2014

PIcture 1

There’s plenty of debate out there among financial services professionals about the fate of the traditional brick-and-mortar branch.

What’s clear is that in the meantime, a new species of bank has been gaining ground and turning heads: the online-only bank.

While consumers are justifiably wary of cybersecurity concerns, the promise made by these services is twofold.

On the Dollars and Cents side, they lure consumers with low- or no-fee banking, perks they can afford due to the lower cost of running an online bank.

And on the Customer Experience side, one word sums it up: convenience. The anywhere, anytime availability of these banks, and the fact that most of them are designed specifically with mobile in mind, is attractive.

Even these digital banks realize the value of a human touch, so many of them also promise the availability of customer service personnel to help as needed.

Today’s consumers have grown accustomed to managing much of their life online, and to being able to get online at a moment’s notice. The fact that these banks don’t tie them down to a particular location or region is another plus.

This emerging competition should be a strong nudge to traditional banks to evaluate the promises they’re making to their customers and what is being done to fulfill those promises.

It’s also yet another incentive to put the spotlight on your digital and mobile services and user experience. Using Voice of the Customer data and insights, you can zero in on the key drivers of satisfaction and make the necessary improvements to meet that goal.

A robust VoC program is your best asset in customer experience management. As we enter 2015, now is a good time to ask: Are you getting everything you need from yours? Contact CSP today to find out what you could be missing.

Onboarding is a Make or Break Moment in Customer Experience

October 8, 2014

As the saying goes, you only get one chance to make a lasting first impression. The beginning of your business’s relationship with a customer is one of many moments of truth that will shape that customer’s continued engagement and loyalty.

Onboarding may be near the top of the sales funnel from the enterprise’s point of view, but it’s likely that a first impression has already been made before that customer even walked in.

In all probability, that customer has already been exposed to your brand and business practices for some time before deciding to come on board. He or she has observed your marketing and promotional messages, visited your website and perhaps your social profiles, and run your brand name past friends, family and search engines alike.

Some of these impressions are carefully controlled by your marketing and public relations initiatives and are meant to encourage adoption. Word-of-mouth, whether collected from personal acquaintances or anonymous online reviews, can be a mixed bag.

But obviously, the first impression was positive enough to bring them to the table to begin onboarding. This next moment of truth is your opportunity to reinforce everything positive they’ve absorbed about your brand, and if necessary, dispel the negative (but only if the customer brings it up).

Think of it as a gesture of good faith, promising that the experience will be everything they expected – and then some. While overenthusiastic selling may leave a new customer overwhelmed, this is a perfect chance to raise awareness of your various products and services and encourage early engagement with these additional touchpoints.

Adoption of those products and services ensures that the relationships are stickier, which means reduced account attrition and reduced pressure on acquisition.

Provided that you have a robust, optimized customer experience strategy and can deliver on your promises to your new customers, the right onboarding process puts you a step ahead on the path to customer loyalty.

This makes it critical to have the right tools in place to identify and measure the key drivers of customer experience across all channels. CSP’s research methods, expertise and resources empower you to keep your brand promise. Contact us today for our insights into customer onboarding and beyond.