How to get your customers to Love your brand

Customer loyalty is of extreme importance to any firm.  Many firms find that their ‘loyal’ customers often defect to competition.  Yet we find that there are organizations and entities that have ‘customers’ who are loyal to the extent that they love them, will never leave them and will be willing to pay more money for the same product/service.   Usually we find these types of ‘customers’ in sports, music, and charities.  For example, when have we heard of fans giving up support for the Celtics or Manchester United, just because they didn’t win the trophy?  Or when have you heard of people flocking to the music stores to buy a particular music album just because it’s on sale.  People will only buy music they love, not because it offers more points, is cheaper, or just because it was conveniently available.  Similarly, most people who donate money to a charity usually do so because they feel emotionally attached to it.  Many people support Save the Children, or Greenpeace, because they feel strongly about what these organizations are doing.

The problem is that these entities don’t fall in the ‘normal’ category of business.  Can we get customers to love our normal companies, and how do we do it?  After spending nearly four and a half years doing research into this area, I’ve finally found some answers.  The good news is that yes indeed you can get your customers to love you.  These customers are loyal to an ‘extreme’ extent that they feel emotionally attached to your brand / company.  They will never search for alternatives (unless if you don’t offer what they’re after).  These customers will not only spread good word of mouth, but go out of their way to tell others.  Moreover, these guys will be willing to pay more to receive the same service / product that you have to offer them!  In fact, I’ve found that these customers are willing to spend up to 20% more money.  Overall, they are between 20 to 50 percent more profitable than other types of ‘loyal’ customers.

Hence, the million dollar question is, how to get customer to love you?  The following are some steps which may help in achieving this.

1. Focus on customer delight.  Nearly all the marketing texts you pick up, nearly all the marketing experts have one thing to say, marketing is about customer satisfaction.  However, customer loyalty is about delight, and not satisfaction.  Delight does not necessarily mean that you try to surprise the customer every time.  Instead, often customers will be delighted because you consistently deliver a high quality service!  One of the key differences between customers who just like, and those who love a firm is the level of satisfaction.  Customers that love the brand are extremely satisfied whereas others were only satisfied.
2. Appropriate service recovery.  To err is human.  However, the manner in which we handle a service failure will determine if our customers will hate, like or love us.  The recovery has to be timely, and appropriate to the level of mistake that you’ve committed.  Customers who said they like a company but not enough to love it, were of the view that service recovery was ‘too little, too late’.  Others who loved the company said that the recovery was very quick and much better than what was expected.
3. Don’t compromise on quality.  No matter what your target audience, make sure that you offer the best quality in your product category.  Customers who love their firm always have had a positive perception of the quality.  These customers are of the view that the level of quality at this brand is better than competition.  Even if you sell to the lowest segment in the market, you need to be better than the competition.
4. Never forget the customer.  Customer’s needs are constantly changing.  Companies that are good at winning customer loyalty, always keep in touch with their customers.  They know what their needs are, and how best to satisfy those needs.  These companies can sense the changes in the customer requirements and then quickly act upon them to fulfill the needs.
5. Focus on providing a unique service.  Even if you’re selling products, you need to differentiate yourself.  Best practice firms seem to focus on providing a unique service, instead of merely selling products.  This is a factor that usually gives brands an edge over competition, and also makes customers feel good about the brand as a whole.
6. Focus on the brand image.  Interestingly building a positive image about your brand helps customers not only to be attracted to your firm, but also to feel good about the brand.  A positive brand image is highly crucial in the initial stages of loyalty development.
7. Know which customers are likely to progress to the love phase of loyalty.  These customers need to be nurtured, and made a part of your company.  It is with the help of these customers, will you be able to build a wider base for loyal customers.

Finally, don’t expect results to happen overnight.  My research indicates that for customers to love a company there is usually a specific time frame involved.  This can vary between 30 to 50 transactions or visits.  You need to work hard to build a system in your organization that can cultivate love among the customers.  However, with time this hard work will pay off in terms of greater market share, improved levels of profits, increase in employee morale and a better brand image.

The Experience Revolution!

A number of key events in time have shaped history, and more specifically defined how we do business.   For example the advent of money changed the way how business was done.  Much later the industrial revolution again brought about many changes and brought prosperity to the ‘industrialized’ world.  After WWII the Quality Revolution allowed companies in Japan and Germany to prosper.  Not too long ago, the IT revolution has again changed the way business is done.  Companies like Amazon, Apple, EBay, Facebook, Google and Microsoft have achieved success in very short periods of time, which was unimaginable in the past.  Each new ‘revolution’ has allowed business to achieve greater success, earn more profits, grab bigger market shares, than was possible in the previous era.

With the economy in not too great of a condition companies are looking to find ways of surviving.  Moreover competition from the developing economies is making doing business difficult.  A popular question that I often discuss with my MBA students is how to tackle the challenges posed by developing economies like the BRIC or the N11 nations?  Keeping all of these factors in mind, I believe that the time is rife for a new revolution - an Experience Revolution.

Companies that have adopted Customer Experience Management philosophies, and are implementing it in an appropriate manner are already beginning to prosper.  Some of the best practice examples include companies like Apple, BMW, Disney, Harley Davidson, Ikea, Microsoft, Singapore Airlines, and Zara.  Despite the tough economic conditions these companies are outperforming their competitors.  However, as I work with numerous companies from all across the globe I find that apparently only the larger firms have started to adopt a CEM focus.  The 70 odd per cent of the economy, which is made up of small and medium firms have failed to look at CEM.  Overall this is having a negative impact on our economies.

The two major threats to businesses in the west are posed by the current global financial climate, as well as the threat posed by the low cost competitors from the developing countries.  Both of these problems are somewhat interlinked.  Companies try to survive through the troubled economic times by reducing their costs.  In terms of competing against the developing countries, we simply cannot compete on price.  The low wages, economies of scale, coupled with the availability of cheap raw materials makes it impossible for companies to try to compete on the basis of costs.  Customer Experience Management offers us that extra something which is hard to replicate, and hence will give our companies a competitive edge.

My blog, and my talks at various conferences have focused on CEM implementation by a firm.  However, as I see the number of participants and the number of CEM focused conferences increase, I want to focus on the economy as a whole.  Hence, I think we need not just a handful of companies to adopt CEM, but bring about a revolution where a huge percentage of the companies start to adopt this.

A CEM revolution, however, cannot be brought about without the help of the Government at all levels (State and Federal in the US and Individual country and EU in Europe).  The government needs to promote CEM to the masses.  While I’m not an expert on Public Policy, I would suggest the following steps.

First, the governments need to offer tax incentives for companies that spend money on implementing CEM policies.  This will encourage a larger number of companies to shirt towards CEM.  Moreover, this will also encourage, cash strapped, SMEs to adopt a CEM.

An official Government encouragement will also help the academia (which is usually very slow to react to changes in the business world) to focus on this sector.  It will encourage them to do more research, and consequently offer better training to companies.

Governments can also step in and either create or support CEM awards.  The Malcolm Baldrige National Quality Award (MBNQA) in the US has had a positive effect in encouraging businesses adopt Quality policies.  As a member of the Judging panel on the UK Customer Experience Awards, I’ve seen the number of companies apply grow over the years.  Moreover, the quality of the submissions seems to be improving, which shows that companies are adopting CEM.  However, a government backing will not only enhance the reputation of such awards, but will see a much larger number of companies adopting CEM principles.

Similarly, other measures need to be looked at by the Governments to encourage businesses to adopt CEM policies.  This needs to be done to ensure that we bring about a CEM revolution on a large scale, a scale large enough to have a positive impact on our economies.

For comments, please email me at: o.khan@uel.ac.uk I will try to post all of them on the blog.  (To prevent spammers, I’ve had to take this measure).

The 12-steps to creating a great CEM program

Customer Experience Management seems to be on everyone’s mind these days.  One of the questions that I’ve gotten asked a number of times is, how to build a great CEM program, what do we need to do, etc.  Based on extensive research, I’ve come up with a 12-step plan which should help in developing your own CEM program.  I’ve helped a number of firms to use these steps in improving their own CEM strategies, and I’m confident that this will be of use to you too.

Step 1:  Experience Mapping. Creating an experience map of what actually is the first thing that a company ought to do.  This will help us to identify all of the various points of interaction a customer has with a firm.  We may also want to find out what the customer thinks of the current level of service being delivered for each of the experience points.

Step 2:  Find out customer expectations. Finding out what the customer expects should be one of the starting point in the customer experience management process.  This will help the organization to understand what the customer desires, and what is of importance to the customer.  Often companies find it difficult to develop effective CEM strategies because they are unable to understand the requirements of their customers.

Step 3:  Examine the competition. A company can not work in isolation.  Knowing what the competition is offering will only help an organization to set goals and targets and figure out where they can meet and exceed the competition.  Customers will always compare a company with others, and hence it becomes imperative that the company know what its competition is up to.

Step 4:  Analyze and Plan. Once a company knows what level of service it is providing, the level that customers expect, and the level that the competition is providing, it should be ready to develop its own plan.  After analyzing the three types of data, it should be easy for companies to devise their own plans and set levels of ‘quality’ that each experience should deliver to the customer.  If the company is looking to provide memorable experiences, then the company should try to set high goals, where the standards in critical functions exceed both customer expectations as well as competitors.  This is similar to the delight concept for customer satisfaction.

Step 5:  Communicate the Brand Experience. Before a customer actually comes in contact with a firm, the customer gets to experience the communications about the brand.  Hence it is imperative that the various marketing communications media should reflect the brand experience that the company wants its customers to have.  It is important that not everything is given away in the advertising, as this may lessen the impact of the surprise elements within the experience framework.  However, all of the different communications media, including advertising, commercials, web sites, public relations activities reflect the brand experience that the company want to portray to the customers.  If this first level of experience is good, the customer will be attracted to continue to the next stages.

Step 6:  High Quality Product / Service: The experience is of little use if the actual product or service is not of the high quality.  It is imperative that companies work to make sure that the product / service on offer meets the customer’s expectations.  No level of customer experience can help sell a poor product.

Step 7:  Motivated Employees. Numerous researchers have called for having motivated and or satisfied employees.  The first step is to hire right employees and then to train them so that they are highly committed to providing the level of customer experience that the organization expects of them.  Making sure that the employees are satisfied and motivated will ensure that in the long run the customer receive a good experience, and can eventually lead to customer loyalty.

Step 8:  Customer Interface. The customer interface needs to embed the planned level of experiences.  This includes the physical aspects of the customer’s interactions and appeal to the five senses of customers.  Focusing on the right décor, the appropriate music, color schemes, the design of the equipment etc. will help customers to feel comfortable and make the experience an enjoyable one.  Technological aspects of the experience can also be included in this step.  This would include things such as ATMs, payment points, automated call centers, and web sites.

Step 9:  Senior Management Focus. Like other areas of management, senior management’s commitment to and focus on the desired strategy is imperative for its success.  Hence, for CEM too, the senior manager’s commitment is imperative.  Senior managers can not only set examples for the rest of the employees, but will also be more focused in the whole CEM process.

Step 10:  Integrate Functions. It is important that the whole organization is working towards providing a high quality experience for their customers.  The back office as well as the front end employees need to work together, so that the customer can have the best possible experience.  Companies have been cutting back costs by shifting some of their back office work overseas to lower cost centers.  Jaiswal found in a research (2008), many of these have not been able to provide the right level of customer experience as desired by the customers.  Although this may result in short term savings in cost, in the long run it results in customer defections.  Hence, it is imperative that companies make sure that all operations are working towards the same goal.

Step 11:  Post usage. The customer needs to have great post usage experience.  This can include things such as after sales service, warranties, upgrading, installations, etc.  Good after sales service is a way of reminding the customer, long after he/she has used the product or service that the experience with the firm was great.  This encourages the customer to return to the firm and to recommend it to others.

Step 12:  Continuous Innovations. Continuously innovating and improving the experiences is one of the ways that the company can make sure that it stays ahead of competition.  It is also one of the ways that will help the firm to make sure that the customer receives the best possible experiences, and perhaps even help to design memorable experiences.

The Customer Loyalty Lifecycle!

We’ve all heard of the business life cycle, however today I wanted to introduce you to a different type of life cycle, i.e. the customer loyalty life cycle.  When managing a business it is imperative to know what sort of a life cycle the business is likely to go through, and hence we can make appropriate strategies.  Similarly, when wanting to manage loyalty, it is important to understand what type of a life cycle a loyal customer is likely to go through, so that we can make appropriate plans.

Going back to one of my earlier blogs, we must remember that there are three distinct types of loyal customers (http://blog.cibmp.org/?p=32).  Keeping this in mind, we know that the most profitable ones are the emotionally attached customers, and the least profitable are the behaviorally loyal customers.  Moreover, the longevity of the relationship also differs from one type of loyal customer to the other.  Based on research into these types of customers, I have developed a customer loyalty life cycle.

As you can see from the figure, the life cycle is based on two main factors, time and profitability.  While my drawing skills are not great, you can make out the basic concept behind this model.  Customers that are behaviorally loyal will stay lesser time with a firm and not be very profitable.  Attitudinally loyal customers will stick for longer, and eventually they will leave the firm.  Emotionally loyal customers will stay with the firm for as long as they are alive, or as long as they remain to purchase from that product category.  These customers are the most profitable for a firm.  The time factor differs from one industry to another.  However we can now put time figures to this graph.  We can estimate the number of years it will take a customer to become emotionally attached!  The numbers written in the figure above are only for illustration purposes.  My research into this continues, and hopefully in the near future I will be able to publish the time scales, along with estimated profitability figures.

What is important is that we need to realize that all customers start from the same place.  It is up to us to ensure that they end up in the right place.  For example, companies that are committed to providing better customer service and quality will be the ones that will get more customers to go further on this life cycle.  Those that ignore the customer’s true needs will be the ones that see most of their customers end up in the behavioral loyalty sector.

As always, please do let me know what you think about this.  Your comments here, and in various linked in groups are always appreciated.

WOM still the most powerful tool for a marketer

Word of mouth, or recommendation, is the most powerful tool marketers have in their arsenal for attracting and retaining customers.  Despite this being the most powerful of the tools, it is one of the most overlooked, and hence I thought I would devote this blog to the importance of WOM.

Research indicates that customers are more likely to purchase a brand / product based on recommendation from a trusted source than from any other means.  This includes advertising, PR, online marketing, etc.  Moreover, researchers have found that those people who purchase a product based on recommendation from a trusted source are more likely to become loyal than those that went there as a result of other sources.  Interestingly there is further research which states that more customers are likely to purchase a product based on recommendation than even their own past experience!

My research indicates that emotionally attached customers are the ones that are most likely to recommend a brand, and are the ones that will do it most frequently.

Recommendation is also a free tool for marketers.  Usually you don’t spend money on this.  However some companies have started to realize the importance of recommendation and reward their customers who recommend others with vouchers, discounts, and free gifts.

Social media has enabled our customers to use the power of the web to broaden their scope of friends.  This now allows for our customers to reach a wider number of people, and much faster too.

The only problem with recommendation is that it is not really in the control of marketers, or at least not until now.  Companies need to develop strategies, devote budgets, and create teams that will look after recommendation.  With it being a very powerful tool, we must learn to take advantage of this, and not to let it evolve on its own.  Companies need to devise strategies that will assist their customers in being better at WOM.  Various rewards that are being used by firms is just one way to encourage customers to start recommending the company to others.  However there much more to be done.  Companies that can harness the pwoer