Most businesses spend more time and energy trying to find new customers than they spend retaining the customers they have. The logic behind customer retention is simple - it costs far less money to keep current customers happy than to spend much more money to recruit new customers. Loyal customers tell their friends about your business and will spend more money than new customers.
I dread eating at airports. If you travel as much as I do, you are probably familiar with the "3 b's" as they apply to airport fare: bad food, bad attitudes, and bad timing. I had an early flight to catch at the Ontario, California airport recently.
I found myself standing outside the closed and gated doorway to an Applebee's restaurant ten minutes before they were scheduled to open. I just knew they would be late and expected to receive the usual grumpy service common at most airports the world over. But, I was wrong.
Bam! The clock struck five, the lights popped on and this charming lady opened the doors. She greeted me with a smile, a warm "hello" and told me to sit anywhere I wanted. I had never seen such a positive attitude at 5:00 in the morning.
For the next hour, I watched Felicia cheerfully greet customers, many of whom she called by name. They were the "regulars" she said. Felicia was the remarkable person who made that small restaurant pleasant and memorable. Next time I return to the Ontario Airport, I guarantee you this is the restaurant I am going to visit first.
7 Steps to Build Customer Loyalty
Here are seven steps to build this kind of customer loyalty.
Select the right people. In the book, From Good to Great, Jim Collins said, "People are not your most important asset, the RIGHT people are." Most businesses do a poor job of hiring people. They hire just anyone and place them on the front-line with customers.
Spend more time recruiting and hiring the right people with good personalities. Focus on those who are friendly and demonstrate an interest in and enthusiasm for the job. Consider using personality profiles as part of the hiring process. These profiles help identify the true personality characteristics of your applicants. They'll help you find your next Felicia.
- Sensationalize the service experience for your customers. Good service is not good enough. A recent Gallup survey showed a customer who is "emotionally connected" to your place of business is likely to spend 46% more money than a customer who is merely "satisfied" but not emotionally bonded.
- Set performance standards. Outline the behaviors you expect from your employees; tell them your requirements for how employees should act, speak, and respond to customer needs and requests. One of our clients developed a list of twenty customer service commandments that outline actions he wanted his service people to demonstrate. Develop your own that fit your business.
- Sustain on-going training and reinforcement. Good customer service skills are not natural for most people. Effective customer service training must be reinforced and taught on a recurring basis. For example, the Ritz-Carlton hotels provide a thorough customer service training program for all of its employees during their orientation. Then each supervisor conducts a daily "line-up" to review one of the commandments with his employees ten minutes before each shift.
- Specify incentives for demonstrated good customer service behavior. Yes, employees want to be paid well, but they also want to be treated with respect and shown appreciation. The front-line supervisor has the greatest impact on motivating and retaining employees. Reward those who exceed the standards and provide development for those who do not.
- Survey your customers and reduce your defection rate. On average, businesses lose 15-20% of their customers each year to their competition. All businesses encounter this defection rate, but few do much about it. To improve customer retention, one client sends out a customer service report card to its top customers every month. This requires the customer to make an evaluation based on four specific criteria. They tally the results and make sure employees see the scores. This motivates the employees to do a better job.
- Seek customer complaints with enthusiasm. For every complaint you receive from customers, there are at least ten other customers who visited your business who have the same criticism - they just didn't share theirs. A portion of those ten people just took their business to your competitors. Look at customer complaints as a golden opportunity for improvement.