Jul 22, 2008

Customer Loyalty

Times are hard - bankruptcy levels continue to rise and spend levels are down across the US in several key sectors. Consumers are grappling with +$100/barrel oil prices and the resulting impact on the gas prices, air fares, groceries and just about everything else. It's at times like this - when every dollar counts, that we learn the true meaning of Customer Loyalty. Why is it that some companies are able to maintain and even thrive during economic downturns, while others are going out of business? I believe Customer Loyalty plays a key role in this trend. Over the past month, I've researched a number of companies across very different industries with a view to understanding what type of dialogue they're having with their customers and to what degree, they're maintaining or improving Customer Loyalty. The term customer loyalty is used to describe the behavior of repeat customers, as well as those that offer good ratings, reviews, or testimonials. Some customers serve as advocates for specific companies, telling friends and family about products offerings and services. This word of mouth buzz is a very potent means of creating awareness about a company’s value proposition & driving customer loyalty. Google is one company that has benefited immensely from the loyal behavior of it's user base.

However, customer loyalty includes much more. It is a process, a program, or a group of programs geared toward keeping a client happy so he or she will provide more business. Customer loyalty can be achieved in some cases by offering a quality product with a firm guarantee. Organizations often use special offers, gifts and promotional campaigns coupons, low interest rates on financing, high value trade-ins, extended warranties, rebates, and other rewards and incentive programs to drive customer loyalty. The ultimate goal of customer loyalty programs is to create happy customers who will return to purchase again and persuade others to use that company's products or services.

The Dialogue
I believe it's important for companies to maintain an ongoing relationship with existing customers and start one with potential customers. Good customer relationships are driven by having a meaningful dialogue on an ongoing basis. One which highlights the strong value proposition which the company provides as well as the value added services which are available to users.

The theme, tone and key underlying message should be conveyed through every level of the customers experience. So Marketing Campaigns should push a consistent, integrated message - through various mediums. Sales, support services and strong customer relationship management are amongst the key drivers of customer loyalty because of the constant, high-level interaction with customers. If a client has a problem, the company must be very responsive and should strive to address it in a timely fashion.

This should be standard procedure for any reputable business, but those who wish to develop customer loyalty on a large-scale basis may also go above and beyond the standard. In an upcoming post, I'll review the Customer Loyalty Initiatives of a handful of well known companies........

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