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Diploma in Customer Service
Providing Excellent Customer Service
Creating Customer Loyalty

Creating Customer Loyalty
We all know it’s important to have loyal customers. But do you know how important it is?

A study by Bain & Company suggests that a 5% increase in customer loyalty can improve profitability by anywhere from 25% to 95%.

It shows us there are big opportunities available for owners and managers who are willing to do what it takes to increase customer loyalty.

The good news is, it’s not hard. And you can do it with the people and resources you have right now. It takes time, effort and patience to make it successful. But you can make a huge impact on your business.

The 6 Key Steps to Loyal Customers
The 6 key steps to loyal customers are:

1. Ask your customers what they want

2. Tell your customers what to expect

3. Create easy ways for your customers to offer feedback

4. Listen to what your customers say

5. Act on what your customers tell you

6. Repeat

1. Ask your customers what they want
This is different than what they expect. What customers expect is usually less (often a lot less) than what they want. But you need to know what they want.

What do they want in general? What are they trying to accomplish (or avoid)? Why did they choose you instead of your competition? What are their priorities and preferences?

Keep in mind different customers focus on different aspects of what your business does and how you do it. But if you talk with enough customers, you’ll see patterns and trends.

You should develop some profiles of what various customers want.

Also look for how your customers want to be served. This will vary a lot and is harder to discover.

Most people focus on what they want because it’s easier to talk about. But people like to be treated well.

We all have different definitions of what being treated well means. You need to learn what it means to your customers.

2. Tell your customers what to expect
Some companies try to be all things to all customers. They do too much and none of it well. Your company should focus on what it does best.

Every company has a unique set of resources that gives it a competitive advantage. These are your company’s strengths. Learn what they are. Use them to determine what your company can do better than anyone else in your market.

Once you know what your company does best, compare that list with what your customers want. These two lists should overlap. (If they don’t, you have a problem!) Where they overlap is what your company should focus on.

These are the things you need to do for your customers: The combination of what they want most and what you do best.

From this list you need to develop your message. You might call it a brand promise. You might call it your Customer Service Standards. What you call it is not as important as what you do with it.

Use it to tell your story. It tells people why they should do business with you. And it helps them know what to expect when they do business with you.

Then make sure your customers, employees and management all understand your message. Do everything you can to share your message with these three groups.

Post it in your store, on your web site, on your business cards, in your ads and anywhere else your employees, management and customers will see it. Get it noticed!

3. Create easy ways for your customers to offer feedback
This is where many companies stumble. They focus so much on getting new orders and delivering the product or service, they forget what happens afterward.

The only way you can consistently get better at what you do is with a steady flow of honest and direct feedback from your customers.

Find many ways for your customers to let you know what they think. Brainstorm with your employees. Make it a contest. Copy other businesses. Ask your customers. Do a Google search!

Try different communication channels and keep trying until you find some that deliver the amount of feedback you need (which is a lot).

Make sure this step is done by your employees. Don’t rely on outsiders (consultants, survey companies, etc.) to do this for you.

They are your customers and you need to communicate with them directly. You’ll learn more from them this way and you’ll develop closer ties with your customers.

You’ll also get another benefit. Customers love it when a company pays attention to them after the sale. They feel important because you’re asking them what they think. Your employees can do this better than any outsiders can.

Finally, make sure your customers know how they can contact you. Publish and promote the many ways customers can connect with you. Encourage them to reach out to you often.

4. Listen to what your customers say
Many companies talk about customer feedback. Some do it well. Most don’t. Because they don’t work very hard to hear what customers are saying about them. They might hear the obvious, like complaints and “thank yous” but nothing else.

If you want to increase customer loyalty, you need to do better. You need to make a special effort to find out what customers are saying about your company, your products and your service.

This includes more than the feedback mechanisms you create (Step 3). It includes the many other ways people communicate about your company. The Internet is full of people’s comments about their customer experiences. Make sure you are mining this resource on a regular basis.

Are you doing what you said you would? If not, what’s missing? Are they getting what they want? Is the message you’re sending the right one? If you have developed a brand promise, is it really what your customers want? And since things change, you need to stay abreast of changes in what your customers want.

Look for the gap in your customer service. This is the difference between what you promise your customers and what you’re actually delivering. Their feedback is how you know what your gap is. So listen for ideas on how to do better. Find ways to close the gap.

In addition to listening to your customers, you need to gather and store what they tell you. Most companies have plenty of contact with customers. But they never keep track of what their customers say. And if they do keep track, it’s often hard to access because it’s in a file drawer somewhere or buried in a database nobody knows how to use.


Make sure the feedback you gather is stored in a way that people can get to. In fact, you should publish it. Make it available to everyone in your company.

The more people who see it, the more ideas you can generate to use it. By having a lot of people look at it and talk about it, you’ll be able to see your customers more clearly.

Conduct regular and frequent meetings to talk about the feedback and draw conclusions about what it means. Look for trends and patterns. Also, look for what’s not there.

Are there things you think are issues or concerns but that do not appear in any customer feedback? If so, what does that tell you? If it’s not important to your customers, should it be important to your company?


5. Act on what your customers tell you
Information is no good if ignored. Beyond listening to your customers and considering what they say, you have to use it. This doesn’t mean you act on everything.

Remember step 2, you can’t do everything everyone wants. So you need to pick and choose what feedback to act on.

Focus on what will help your company do what you do best. Choose ideas that will help you close the gap in your customer service (Step 4). You might find feedback that takes your company in a different direction.


Your brand promise (Step 2) might be missing the mark. Maybe you have a changing customer base or a changing market. If your feedback suggests this you need to consider how it affects your business. Then either act on it or make an informed decision to not act on it.

The bottom line in Step 5 is to do something with your customer feedback. It’s a gift from your customers so treat it as such.

Make sure you thank every customer every time they offer feedback. And, let customers know what you do with the feedback.

If they know it gets used they’re more likely to keep offering it. Help them get involved and stay involved as your partners.


6. Repeat
Customer service practices should be continuously repeated. This is a never ending process of learning, sharing, and working together.

Managing your company is no different than practicing a sport or hobby. The more you do something, the better you get. And since people and situations change constantly, this process needs to keep repeating so you don’t miss these changes.

Keep cycling through again and again. You’ll get better at knowing what your customers want and at giving it to them. Your customers will see you are truly focused on helping them get what they want. They’ll have little incentive to go elsewhere.

Five Ways to Increase Customer Loyalty
There are many things you can do to deliver good customer service. Often it depends on the customer and the situation you’re facing. That can make it hard to create customer service rules that are carved in stone, because every situation is unique.

But there are some general guidelines that can help. And if you follow them consistently with every customer you’ll find the quality of your service will improve and it will keep improving.

In this unit you've learned the ways in which you can gain loyal customers. However, gaining customer loyalty does not ensure that customers will remain loyal. You must constantly improve customer service to ensure the continued loyalty of your customers.

Click on the tabs on the left to discover the five ways you can increase customer loyalty.

Serve Your Customers
Serving your customers means putting them first. It means helping them get what they want. Remember, your customers come to you to accomplish something they want or to avoid something they don’t want. They believe you can help them. (Otherwise they would have gone somewhere else.)

Honor their choice by doing everything within your ability to help them. This means focusing your attention and efforts on discovering what they want and helping them get it. You put their interests and desires first. It means your sole motivation is helping them get what they came for.

Connect With Your Customers
Connecting with your customers means getting to know them as people. You develop a relationship with them. Of course you keep it professional and in the context of your business. But it’s okay to learn about them as you help them. In fact, the better you get to know them, the better you can help them.

As you develop a relationship with them, you build trust in each other. They trust your ability and motivations. You trust what they tell you. This helps you help them. It improves communications.

This does not have to take long. Sometimes a “social chemistry” can develop within minutes. It shouldn’t be phony or manipulative. It needs to happen naturally. If you care about your customers then you’ll develop a great rapport with them quickly.

3. Have Fun
One of the biggest reasons customers don’t return is they have no reason to. Sure they might get what they want but they often get it with no personality. Their experience is unmemorable. Or worse, employees are crabby, grouchy or even angry and they show it.

On the other hand, companies that enjoy tremendous customer loyalty offer their customers something they can’t get anywhere else: FUN.

They provide them an unexpected, positive experience. They have fun with them. The employees enjoy their work and each other and their customers. They find ways to bring joy into their work and they bring their customers along for the ride.


4. Be Flexible
Your goal should be to help the customer get what they want, within your resources. So you always need to look for alternative ways of achieving a particular goal. You need to be creative. You need to think beyond the first solution that comes to mind when we’re working with your customers.

Being flexible means offering customers more than one solution. By offering choices you're making it more likely they’ll get what they want. There are few things worse than being a customer and someone says “that’s the only way you can do it”.

Being flexible also means being willing to try new things and go the extra mile for customers. It means being a problem solver rather than an order taker. Customers know the difference and so do managers.

5. Make Them Happy
This is the most important thing you can do with your customers. If they are happy with your service they will come back. They will help increase your job security because they’ll stick with you and your company.

Note, this does not mean you do anything and everything to make your customers happy. You’re always limited by the resources and policies of your company. But it does mean you do everything within your ability to make them happy.

Get creative and look for ways to give your customer a great experience. You want your customers to leave happy. That’s your bottom line. Make that happen and everything else will follow.

Securing Long – Term Customer Loyalty
Securing Long-Term Customer Loyalty
Poor customer service seems like the norm in many companies but it doesn’t have to be that way. A lot of organizations have big challenges that can be obstacles to providing great customer service. But so do many other companies. Yet they find ways to provide amazing service to their customers. They choose to overcome their challenges. They take care of their customers very well. And they do it consistently.

In this unit we've learned methods of securing and increasing customer loyalty. These methods gain the loyalty of customers in the short-term and medium-term. However, securing long-term loyalty from customers involves an extremely high level of customer service.

Click on the markers below to view the list of things your organization can do to gain the long-term loyalty of customers.

Get Management in Direct Contact with Customers
All levels of management should be exposed to customers. And I’m not just talking about focus groups or round-tables. Members of management need to roll up their sleeves and do the work of their employees once in a while.

And they should talk to customers. In most cases, it's not hard. (If you don't know where to find your customers, maybe you shouldn't be in management.) Many customers would be happy to spend a few minutes chatting with an executive from the company they do business with.

The work of any business happens at the point of customer contact. It does not happen in executive offices or board rooms. Customer-facing employees and their customers are the two groups of people who know exactly how your company does business. As a company leader, you’ll never know this by reading reports. You need to get this information by experiencing it. There is no substitute for direct customer contact.

Get Customers Involved in Creating Customer Service Standards
No one knows more about what your customers want than they do. So get them involved. And I don’t mean lengthy surveys or phone calls by consultants. Talk to them like real people.

Get your employees out where your customers are and talk to them. Buy them coffee or lunch and get them talking. Doing this one on one using your employees will produce much better results than using consultants or survey companies. If you want your customers to be honest with you, start by being authentic with them.

Then use their input to create meaningful standards in how you will serve your customers. Not that you’ll do everything they want. But you should do everything you can within your mission, your resources and the context of your business.

Too many companies disregard and disrespect their customers. They think all the answers reside at the corporate headquarters. That arrogance will ruin a company. Talk to the people who know. Talk to your customers.

Get Employees Involved in Implementing Standards
Customers will tell you what they want. Employees will help you figure out how to do it. Employees do the work of the company day after day. They see (and hear and feel) how things work. They know what works and what does not. They see how the business is changing. They see this all at the point of service, which is where your company produces its revenue.

Everything in the company should support what happens at the point of service. Anything that does not support a successful point of service needs to be questioned.

As you gather information from your customers about how to best serve them, make sure your employees are part of the process. Get them involved from start to finish. Include them in planning, information gathering, customer service standard setting and implementation.

Leadership Must Show Everyone Customer Service is a Priority
There are many examples of employees who deliver fantastic service. Some people will do this no matter who leads their company. But these people tend to be exceptions. I’ve never seen a company that delivers great service consistently without 100% support from the top leaders of the company.

The leaders set the tone and direction for a company’s culture. If the top leaders expect great service for every customer every time, then they will naturally do what it takes to create a culture that breeds such service.

Ultimately for a company to deliver Amazing Service consistently across their organization, the top leaders need to make it a priority. There are no alternative paths to getting this done. The company’s leadership must decide to make service a priority. Then they need to demonstrate this in their words and their actions. It needs to be at the core of everything they do.

Steps one, two and three are tactical. Any company can do them. And if you do them well, you will see positive results. But for long-term results, step four must happen first. Without it, most service gains will be short term. They will not live beyond employee turnover. Eventually the motivation that drives them will fade away as they lose their champions and other issues take priority.

For true, sustainable improvement in customer service quality, an organization must make a commitment at the highest level of management to deliver the best service they can to every customer every time with no exceptions.

END OF UNIT:
Creating Customer Loyalty

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